What Rite Aid pharmacy customers can expect as stores begin to close

As Rite Aid prepares to wind down its operations, customers of the region’s approximately 100 stores may be left wondering what comes next — and how their prescriptions will be filled.

The specific answers to those questions are forthcoming, as the 60-year-old Philadelphia-based pharmacy chain begins its second bankruptcy process in two years.

For the time being, Rite Aid will keep filling prescriptions, according to a letter the company sent Monday to pharmacy benefit managers, the oft-criticized middlemen between pharmacies, drugmakers, and insurers.

When it comes time to move the scripts, the company has said customers will experience no lapse in service.

“We are working to facilitate a smooth transfer of customer prescriptions to other pharmacies,” Rite Aid executives said in a letter to customers, dated Monday.

Citing continued financial pressures and competition, Rite Aid executives said they intend to sell or close all remaining stores.

» READ MORE: Rite Aid files for bankruptcy again, plans to close or sell all stores

An auction of the company’s pharmacy assets is set for no later than next Wednesday, May 14, according to documents filed Monday in U.S. Bankruptcy Court in New Jersey, and other assets will be auctioned no later than June 20.

“It is happening very fast, lightning speed,” said Sarah Foss, the global head of legal at Debtwire and an expert in bankruptcy and restructuring.

In this case, the speed is warranted because “customers are going to go elsewhere” if the sale process drags on too long. If customers leave en masse, she added, the prescription files, which are included in pharmacy assets, will be less valuable to potential buyers.

The price of a single pharmacy’s prescription file can be between $100,000 and more than $1 million, depending on the number of customers and types of prescriptions, said Michael Blackburn, executive vice president at RetailStat, which monitors credit risk in the retail industry.

After next week’s auction, Rite Aid customers should know more about where their prescriptions will be transferred.

Rite Aid has been closing stores since before its first bankruptcy in October 2023.

Since 2022, the company has cut its Philadelphia-area footprint by about 40%. It has closed more than 70 locations during that time.

In those cases, Rite Aid has said it mailed letters to customers and posted signs in stores, alerting them of forthcoming closures and explaining where scripts would be sent. Such notices are required by many state pharmacy boards, including New Jersey’s.

Customers who wish to have their prescriptions sent to a different pharmacy typically have to contact their Rite Aid directly.

While Rite Aid has promised customers a seamless process for prescription transfers, Rob Frankil, executive director of the Philadelphia Association of Retail Druggists, said there may be some steps required of patients and pharmacists.

“A pharmacy needs to get a record transfer,” Frankil said. ”You need to contact the [former] pharmacy if there are refills left or contact the doctor.”

» READ MORE: What happens after a Philly neighborhood’s last chain pharmacy shuts its doors

“If the pharmacy is not open, it’s difficult to do that,” he added. “There is going to be a lot of time and effort to get [new patients] transferred if they went to a pharmacy that closed.”

More will be known by late June, when both parts of the auction process are complete.

Don’t expect front-end inventory, which has long been sparse at some local Rite Aids, to be replenished in the meantime, experts said.

Rite Aid CEO Matt Schroeder wrote in a letter to vendors on Monday: “At this time, Rite Aid has generally stopped purchasing goods and services, except for those that it believes are essential to supporting this process.”

There’s “a chance” that someone could buy Rite Aid’s intellectual property and run the company under the same name, Blackburn said. Or the intellectual property could be purchased and used to start up a similar business online, Foss said.

“That’s a valuable name, so oftentimes we do see the [continued] online life of a store that is no longer brick and mortar,” she said, noting that initially happened with Bed Bath & Beyond. And nowadays, “more people are filling prescriptions online.”

Another possibility, the experts said, is that a national or regional pharmacy or retailer buys some Rite Aid locations.

But even Rite Aid is preparing for some of its more than 1,200 stores to close. In court documents, its attorneys said the company has identified stores that are “no longer necessary for the debtors’ business operations, will not be assumed and assigned as part of any sale process, and that are otherwise financially burdensome,” including stores in Harrisburg and Kutztown.

Foss said it’s unlikely that a company would want to take over all the other Rite Aid stores.

Taking over “a retail pharmacy chain in 2025, as a business model with a wide [footprint], just is not practical,” Foss said.

Schroeder, Rite Aid’s CEO, said in a statement Monday that company executives were “encouraged by meaningful interest from a number of potential national and regional strategic acquirors.”

So, Foss said, it sounds like some locations could be sold: “We just don’t know how many.”

Frankil, of the Philadelphia Association of Retail Druggists, said Rite Aid’s customers will likely go to a smattering of local chain and independent pharmacies. If they’re still going to a brick-and-mortar drugstore, he added, it’s unlikely that they’d switch to mail-order.

» READ MORE: Independent pharmacists fight burnout and industry pressures as Rite Aid and CVS close stores

The news about Rite Aid has further intensified Frankil’s concerns about pharmacy access. He said he blames pharmacy benefit managers, or PBMs, for the closure of many pharmacies, including a dozen independent pharmacies in the city so far this year.

“If we don’t get action soon, real robust legislative action to put a stop to low reimbursements to pharmacies by the PBMs,” he said, “we are right at the tipping point where there is going to be an access problem for patients getting their medicine.”