Golden State Today

California Attorney General Rob Bonta announced a settlement with Rite Aid Corporation, allowing him to review changes in ownership involving their retail pharmacy outlets statewide. The settlement includes conditions to address competition-related concerns and ensure that remaining Rite Aid pharmacies continue providing essential medication and healthcare services, particularly for Medi-Cal and Medicare patients. It also aims to protect 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 in October 2023 and began closing nearly 550 stores nationwide. In California, more than 100 stores were closed; however, approximately 71% of all stores in the state have remained open throughout the bankruptcy process. 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.

Under the settlement and Assembly Bill (AB) 853, Rite Aid agrees to several conditions over the next five years:

- Use commercially reasonable efforts to maintain remaining Rite Aid stores and required licenses.

- Provide a 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.

- Continue free delivery services to patients from a closed store in San Diego.

- Ensure compliance with state staffing levels.

- Maintain 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 collective bargaining agreements require such payments.

- Use commercially reasonable efforts not to contest unemployment claims for laid-off individuals if no nearby Rite Aid store offers employment.

- Comply with nondiscrimination rules in healthcare service provision and make commercially reasonable efforts to provide financial assistance to patients.

The California Department of Justice’s Healthcare Rights and Access Section (HRA) is actively involved in increasing and protecting healthcare affordability, accessibility, and quality within the state. HRA’s attorneys engage in various areas including nonprofit healthcare transactions; consumer rights; anticompetitive consolidation; drug pricing issues; privacy matters; civil rights related to reproductive health and LGBTQ rights; as well as public health initiatives concerning tobacco products.

A copy of the settlement can be found here.