Bankrupt Rite Aid Resolves Dispute with McKesson to Ensure Prescription Supply
Rite Aid and McKesson Reach Settlement
Pharmacy chain Rite Aid, which recently filed for Chapter 11 bankruptcy, has successfully resolved a critical dispute with drug supplier McKesson Corp. Attorneys confirmed that the settlement will ensure the continuous fulfillment of customers’ prescriptions throughout Rite Aid’s bankruptcy proceedings.
Preserving Drug Supply Agreement
Rite Aid took legal action against McKesson, seeking to prevent the termination of a drug supply agreement that accounted for 98% of the pharmacy chain’s prescription drug sales. However, the recent settlement guarantees that McKesson will continue supplying drugs until the conclusion of Rite Aid’s bankruptcy case.
Faster Payments and Prioritized Deliveries
Under the terms of the settlement, Rite Aid has agreed to expedite payments for new drug shipments and prioritize paying for new deliveries before other creditors. This arrangement aims to ensure a smooth supply chain and maintain essential medications for Rite Aid customers.
Continued Negotiations for Long-Term Solution
While the current agreement only covers the period of Rite Aid’s bankruptcy, Rite Aid and McKesson have committed to ongoing negotiations for a more sustainable, long-term solution. This demonstrates their dedication to finding a mutually beneficial arrangement that extends beyond the constraints of bankruptcy proceedings.
Rite Aid’s Bankruptcy Plan
Rite Aid, with over 2,000 retail stores in the U.S., filed for bankruptcy with a comprehensive plan that includes store closures, the sale of its pharmacy benefit company Elixir, and resolving lawsuits related to the sale of addictive opioid medications. The settlement with McKesson marks a significant step forward in Rite Aid’s restructuring efforts.
Resolution of Dispute Confirmed
A spokesperson for McKesson has confirmed that the dispute has been successfully resolved. McKesson will continue making shipments to Rite Aid during the bankruptcy proceedings, ensuring a steady supply of medications for Rite Aid’s customers.
A Long-Standing Partnership
Rite Aid has relied on McKesson as its primary drug supplier for two decades, with the company paying McKesson $9 billion under the contract in 2023 alone. Rite Aid’s low drug inventory necessitates daily deliveries from McKesson, emphasizing the importance of their enduring partnership.
With the settlement in place, Rite Aid can now focus on finalizing the agreement and seeking court approval. This positive development secures the availability of vital prescriptions for Rite Aid customers and underscores the commitment of both Rite Aid and McKesson to finding a sustainable solution for the future.