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Rite Aid - History, Company Troubles

drugstore locations pharmacy bought

The Rite Aid chain, (originally called Thrif D Discount Center,) opened in Scranton, Pennsylvania in 1962. Through the acquisitions of new drugstores and locations, Rite Aid quickly expanded into several other states in 1965. The drugstore chain was renamed as the Rite Aid Corporation in 1968 and made its debut on the American Stock Exchange that same year. In 1972, Rite Aid had 267 locations in 10 states. Rite Aid was now considered to be the third largest drugstore in America. In 1983, an acquisition of over 400 stores was made, expanding Rite Aid to 2,000 locations, and reached a profit-level of over $1 Billion. Rite Aid also acquired Read’s Drug Store at this time. Rite Aid bought out Perry Drug Stores in 1995, and Thrifty PayLess and Bi-Mart in 1996. After failing to reach a level of profit acceptable to its new owner, Bi-mart was sold off two years later. In 1999, Rite Aid bought Harco, Inc., K & B Inc., and the General Nutrition Companies. Small GNC areas were established in many of the Rite Aid locations. This same year, Rite Aid partnered with drugstore.com to allow customers of Rite Aid to place prescription orders through the site for in-store purchase.

Company Troubles

In 1999, Rite Aid became the subject of a number of media reports about the aggressive marketing of certain pharmaceutical products as well as other anti-consumer practices. These other practices included selling expired medical products instead of discontinuing them following their expiration. Although Rite Aid is considered to be the biggest pharmacy chain in California, it has come under recent investigations by government regulators in the state as well as in Washington and Oregon. A number of consumer complaints regarding the Rite Aid Pharmacy have also been made. Rite Aid had a huge accounting scandal that eventually led to the resignation and prosecution of a number of top-ranking Rite Aid executives, including the CEO. At this particular time, Rite Aid had just bought Thrifty PayLess Drugstore and was working on integrating its new acquisition into the company. As a result of the controversies, Leonard Green, who had overseen the purchase of these stores, took control of the company, placing former Fred Meyer employee, Mary Sammons in as the new CEO. Sammons began to institute several reforms in Rite Aid’s business tactics. She is credited with returning Rite Aid, Inc., to its previous level of credibility and profitability. In 2001, Rite Aid agreed to institute improvements in their pharmacy complaint process by placing in a new program to respond to customer complaints. In 2004, Rite-Aid was ordered by the United States Department of Justice to pay a multi-million dollar fine for the using false prescription claims to bilk the United States government out of money.

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