Rite Aid Sues US Justice Dept Over Opioid Prescription Allegations, Bankruptcy Issue

Rite Aid has sued the U.S. Department of Justice (DOJ) to halt a lawsuit alleging the company's involvement in illegally filling prescriptions for addictive opioid medications. The lawsuit comes as Rite Aid finds itself in a bankruptcy situation.

Reuters reported that the DOJ's position threatens to impede the ongoing restructuring efforts by the company. In response, Rite Aid has requested the U.S. Bankruptcy Judge Michael Kaplan will rule that the DOJ lawsuit should not proceed while the company is under bankruptcy protection.

DOJ's Lawsuit Pause and Rite Aid's Request for Equal Treatment

The DOJ had initially filed the lawsuit against Rite Aid in March, and despite Rite Aid's bankruptcy filing, it agreed to a "brief pause" of the lawsuit, according to PennLive. However, Rite Aid argues that this stance undermines its restructuring efforts.

Rite Aid seeks to put the government on equal footing with other opioid-related plaintiffs whose lawsuits were automatically halted due to the company's bankruptcy filing. The DOJ maintains that its lawsuit is not affected by the bankruptcy filing as it exercises its "police powers" through legal action.

Rite Aid, which operates approximately 2,000 retail pharmacies across 17 U.S. states, filed for bankruptcy protection in October. It aims to close underperforming stores and address over 1,600 lawsuits surrounding allegations of over-selling addictive opioid medications by filling illegal or suspicious prescriptions. However, a court-appointed committee representing opioid plaintiffs has expressed concerns over potential non-payment to victims harmed by Rite Aid's alleged reckless sale of opioid drugs.

Rite Aid's Legal Battle Implications

As Rite Aid fights the DOJ's lawsuit, the outcome will have far-reaching implications. It will determine whether the company can proceed with its restructuring efforts unhampered by legal actions, and if the DOJ's exercise of "police powers" can continue despite Rite Aid's bankruptcy status.

Additionally, the opioid creditors and victims affected by the company's alleged actions will closely monitor the proceedings, hoping for equitable resolutions.

Attorney Arik Preiss, representing opioid creditors, raised concerns that Rite Aid's bankruptcy proceedings seem to prioritize its top lenders over other stakeholders, potentially putting them at odds with the DOJ.

Rite Aid's major competitors, including Walgreens, Walmart, and CVS, have already agreed to settle a series of similar opioid lawsuits outside of bankruptcy, amounting to $13.8 billion.

The DOJ's opposition to opioid settlements in the bankruptcies of Endo International and Purdue Pharma has complicated those cases as well, delaying proposed settlements and drawing appeals to higher courts.

Photo: Rite Aid Newsroom