PHILADELPHIA, Pennsylvania: Rite Aid, one of the largest U.S. pharmacy retailers, filed for bankruptcy protection amid high debt, declining revenue, increased competition, and opioid litigation.

The company said it will close underperforming stores, sell its pharmacy benefit company Elixir, and resolve lawsuits over sales of addictive opioid medications.

Founded in 1962, Rite Aid will remain open for business during the bankruptcy.

In the 2023 fiscal year, the company had US$24 billion in revenue and filled 200 million prescriptions, as well as had $750 million in losses amid rising litigation costs.

Facing 1,600 other opioid lawsuits from state and local governments, hospitals, and individuals, Rite Aid has denied any wrongdoing and said it hopes to reach an “equitable” settlement of opioid litigation in bankruptcy.

Other companies, including Mallinckrodt and Endo International, have also filed for bankruptcy due to lawsuits for fueling the U.S. opioid epidemic, which has caused more than a million overdose deaths in the U.S. since 1999.

To resolve lawsuits related to the opioid crisis, drug manufacturers, drug distributors, and pharmacy chains have agreed to pay more than $50 billion in settlements.

Court filings in the U.S. Bankruptcy Court for the District of New Jersey showed that Rite Aid has debts totaling $4 billion, $8.6 billion in total liabilities, and $7.65 billion in assets.

It plans to fund its restructuring with a $3.45 billion bankruptcy loan from existing lenders.

The company said that pharmacy benefit company MedImpact Healthcare Systems has made an offer of $575 million for Elixir.

Rite Aid closed 200 stores before its bankruptcy, and it expects to close more as its Chapter 11 case proceeds.