Rite Aid has confirmed that the U.S. Bankruptcy Court in New Jersey has given the green light to sell its subsidiary, Elixir Solutions, to MedImpact Healthcare Systems Inc., a standalone pharmacy benefits provider.
Rite Aid's Elixir Sale Finalized Amid Bankruptcy
Almost three months after declaring Chapter 11 bankruptcy, Rite Aid had revealed its plans to sell Elixir, its wholly-owned pharmacy benefits subsidiary. This move was part of an agreement with MedImpact Healthcare Systems.
Initially known as Envision Pharmaceutical Services, Elixir was acquired by Rite Aid in 2015 for $2 billion and rebranded as Elixir in 2020.
Jeffrey S. Stein, Rite Aid's CEO and chief restructuring officer, expressed his satisfaction with the progress of selling their Elixir business to MedImpact.
In a recent statement, he said, "We're really happy to get this important approval for the Elixir sale. We believe this deal with MedImpact is the best way to maximize Elixir's value and ensure its continued service to clients and customers for a long time. I want to thank the Elixir team for their commitment and hard work during this period."
The sale is still subject to some standard conditions and is expected to be finalized in early 2024. Until the sale is complete, Elixir will remain a part of Rite Aid and continue its regular operations.
It's also important to note that Elixir Insurance was not involved in Rite Aid's Chapter 11 bankruptcy proceedings or the deal with MedImpact. It continues to function normally and serve its members.
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MedImpact's Offer Leads in Elixir Sale Amid Rite Aid Bankruptcy
During its bankruptcy, Rite Aid actively sought buyers for Elixir, engaging with over 30 interested parties.
However, none of the potential buyers proposed a better deal than MedImpact's original offer, shared Rite Aid's lawyer Ross Fiedler at a recent court hearing in Trenton, New Jersey.
Fiedler emphasized that selling Elixir is a key step in Rite Aid's strategy to generate funds and refocus on its core retail pharmacy operations while in bankruptcy.
Speaking to U.S. Bankruptcy Judge Michael Kaplan, who handles Rite Aid's Chapter 11 case, Fiedler indicated they expect the sale to be completed by the first quarter of 2024.
Judge Kaplan gave his approval for the sale at the hearing.
Rite Aid, a major player in the U.S. pharmacy retail sector, attributed its bankruptcy to several factors, including substantial debt, falling revenues, rising competition, and legal challenges related to opioids.
Originally from East Pennsboro Township, Rite Aid, now headquartered in Philadelphia, has undergone significant changes. Following its bankruptcy announcement, the company disclosed plans to shut down over 300 stores.
CEO Jeffrey S. Stein commented on the company's current status: "We're moving ahead with the court's guidance and are making good headway with our Rite Aid 2.0 Plan. Our main goal is to offer top healthcare products and services to our daily customers."
Pharmacy Benefit Managers (PBMs) are crucial in setting drug prices. They work with drug manufacturers to negotiate costs and rebates, representing employers, health plans, and other clients.
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