California Attorney General Rob Bonta has announced a settlement with Rite Aid Corporation to address competitive impacts related to changes in ownership involving their retail pharmacy outlets statewide. The settlement includes injunctive conditions aimed at ensuring the continued provision of essential medication and healthcare services, particularly for those reliant on Medi-Cal and Medicare, as well as protecting workers at stores that are sold or closed.
"Pharmacies are often the most accessible healthcare providers, offering vital services for the well-being of individuals and families. Without them in our communities, Californians could face significant barriers in managing chronic conditions, receiving timely medications, and accessing preventative care," said Attorney General Bonta. "Today, with AB 853 and conditions set by my office, Californians who rely on Rite Aid pharmacies can continue accessing their medications and essential healthcare services they need to live healthy and fulfilling lives."
Rite Aid filed for Chapter 11 bankruptcy and began closing nearly 550 stores nationwide since October 2023. California experienced the closure of more than 100 stores statewide; however, approximately 71% of all stores in California have remained open throughout the bankruptcy. With one exception in San Diego, there were two or more competitive alternatives close by for the closed stores. In June, Rite Aid’s bankruptcy restructuring plan was approved by the United States Bankruptcy Court for the District of New Jersey, transferring control of the company to a group of its lenders.
Under Assembly Bill (AB) 853 and the settlement terms agreed upon for the next five years, Rite Aid will:
- Use commercially reasonable efforts to maintain remaining Rite Aid stores along with all required licenses.
- Provide a 90-day notice before selling or closing any remaining Rite Aid stores.
- Continue participating in Medi-Cal and Medicare if commercially reasonable.
- Offer financial assistance to patients when commercially reasonable.
- Maintain free delivery services for patients who were receiving these services from a closed store in San Diego.
- Ensure compliance with state staffing levels.
- Keep a hiring list for employees from closed stores for preferential hiring at other Rite-Aid locations.
- Use commercially reasonable efforts to pay retirement contributions if required by collective bargaining agreements.
- Abstain from contesting unemployment claims for laid-off employees if no nearby Rite Aid store offers employment.
- Comply with nondiscrimination rules in providing healthcare services and make commercially reasonable efforts to provide financial assistance to patients.
The California Department of Justice’s Healthcare Rights and Access Section (HRA) continues its work to increase and protect affordability, accessibility, and quality of healthcare across various areas including nonprofit healthcare transactions, consumer rights, anticompetitive practices in healthcare markets, drug pricing issues, privacy concerns, civil rights such as reproductive rights and LGBTQ-related healthcare rights, as well as public health initiatives concerning tobacco products.
A copy of the settlement is available here.
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