OAKLAND — California Attorney General Rob Bonta today announced a settlement with Rite Aid Corporation (Rite Aid) operating as an injunction to enable him to review changes of ownership involving their retail pharmacy outlets statewide. Additionally, the settlement includes injunctive conditions that resolve competition-related concerns to ensure remaining Rite Aid pharmacies provide necessary medication and healthcare services to Californians, specifically those who may rely on Medi-Cal and Medicare, and protect workers at stores that are sold or closed. Today’s settlement reflects the Attorney General’s efforts to prevent the continued growth of pharmacy deserts, which disproportionately impact low-income individuals, the elderly, and people of color, all of whom are also patients of Rite Aid. The settlement was reached under Assembly Bill (AB) 853.
“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 and with one exception in San Diego, there were two or more competitive alternatives close by for the closed stores. This June, Rite Aid’s bankruptcy restructuring plan was approved by the United States Bankruptcy Court for the District of New Jersey, which turns over control of the company to a group of its lenders.
Under the settlement and AB 853, Rite Aid agrees to the following conditions for the next five years:
- Use commercially reasonable efforts to maintain the remaining Rite Aid stores, as well as all required licenses.
- Provide 90-day notice of sale or closure of remaining Rite Aid stores.
- Continue participation in Medi-Cal and Medicare if commercially reasonable.
- Provide financial assistance to patients if commercially reasonable to do so.
- Continue free delivery services to patients who were receiving these services from a closed store in San Diego.
- Ensure compliance with state staffing levels.
- Maintain hiring list for all employees from stores that close going forward for preferential hiring at other Rite-Aid stores.
- Use commercially reasonable efforts to pay retirement contributions if collective bargaining agreements require such payments.
- Use commercially reasonable efforts to abstain from contesting unemployment for individuals who are laid off as a result of the sale or closure of Rite Aid stores if no nearby Rite Aid store offers employment.
- Comply with nondiscrimination rules in the provision of healthcare services and to commercially reasonable efforts to provide financial assistance to patients.
The California Department of Justice’s Healthcare Rights and Access Section (HRA) works proactively to increase and protect the affordability, accessibility, and quality of healthcare in California. HRA’s attorneys monitor and contribute to various areas of the Attorney General’s healthcare work, including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation in the healthcare market; anticompetitive drug pricing; privacy issues; civil rights, such as reproductive rights and LGBTQ healthcare-related rights; and public health work on tobacco, e-cigarettes, and other products.
A copy of the settlement can be found here.
