Rite Aid’s Bankruptcy Strategy Sparks Concerns over Rising ‘Pharmacy Deserts’: What It Means for Your Healthcare Access

Rite Aid’s bankruptcy process and subsequent store closures could negatively impact medicine and care accessibility, particularly in majority Black and Latino neighborhoods and rural areas, according to experts.

The drugstore chain announced on Sunday that its voluntary Chapter 11 process would allow for accelerated closures of underperforming stores. Rite Aid currently operates over 2,000 stores, mainly on the West and East coasts.

While the specific store closures have not been determined, the Wall Street Journal reported last month that the company is proposing to close 400 to 500 locations.

According to Dima Qato, a USC associate professor specializing in pharmacy access, when drugstore chains shut down stores, they often target lower-income, Black and Latino neighborhoods with residents covered by government-funded insurance programs like Medicaid. Qato explained that these closures often occur regardless of the presence of another nearby pharmacy.

Rite Aid also has a significant presence in smaller, rural markets that generate less business compared to urban locations, said Jeff Jonas, a portfolio manager for Gabelli Funds who tracks drugstores. He predicts several hundred store closures in the coming years.

These closures can lead to the emergence of “pharmacy deserts” — areas where residents, especially those in low-income neighborhoods without access to cars, are more than half a mile away from the nearest drugstore. Rural areas may also experience a lack of nearby drugstores, exacerbating existing disparities in pharmacy access.

Qato warns that patients who lose access to a nearby drugstore are less likely to continue taking their prescribed medications, potentially impacting their health outcomes.

In addition to prescription fulfillment, these stores have also become important sources of annual vaccines and healthcare services in recent years.

While Rite Aid has stated that it will make every effort to ensure customers have access to health services, either at another Rite Aid location or a nearby pharmacy, the company’s pilot program addressing rural pharmacy deserts in Virginia is uncertain in light of the bankruptcy process.

According to Jonas, drugstores are willing to contribute to pharmacy access, but economic considerations must align for these companies to sustain operations. He cited Medicaid as a lower-paying option that may be less attractive to drugstores.

Associated Press video journalist Ted Shaffrey contributed to this report.