Rite Aid’s bankruptcy and CVS’s expansion signal further consolidation in the region as local pharmacies face mounting pressures

By Damian Mann for Ashland.news

Rite Aid is the latest pharmacy to shut down in Ashland, and CVS Pharmacy is ready to set up shop at the same location in Tolman Creek Plaza Shopping center at intersection of Ashland Street and Tolman Creek Road, also home to Albertsons.

Locally owned Ashland Drug at 53 North Second St. in the downtown is the only other pharmacy available to Ashland residents and has seen a surge in business because of Rite Aid’s announcement.

A letter dated Aug. 18 from Rite Aid, which previously announced it was closing locations after declaring bankruptcy, informed local residents that it was ending operations at 2541 Ashland St. on Sept. 22.

Prescriptions with existing customers will then be available on Sept. 23 when CVS takes over.

A sign in front of Rite Aid has alerted customers that CVS is moving in.

Rite Aid’s letter thanked customers for their loyalty and stated the company was “sorry to tell you that we have made the difficult decision.”

“We know you have choices when it comes to pharmacies, and we appreciate that you entrusted us with your health,” the letter stated.

Grants Pass was another Southern Oregon city that will see a similar takeover. The Medford and Phoenix Rite Aids previously closed.

Chris Hernandez, owner of Ashland Drug, said he’s vowed to continue to keep his store open despite continued pressures on the few locally owned pharmacies in the state.

“We’re not going without a fight,” he said. “We’re only one of two pharmacies left at this end of the valley.”

Hernandez said he’s seen about 30% more customers recently because of Rite Aid’s announcement.

“It’s definitely increased our business, but it doesn’t mean we’re more profitable,” he said.

He’s increased payroll and installed new technology that counts pills faster to help fill orders for customers. The store continues to provide counseling to customers on their medications.

Hernandez said insurance companies continue to squeeze his reimbursement rates for medications.

In some ways, the squeeze on his profitability has gotten better, and in other ways its gotten worse.

“We have to accept what’s going on and hunker down,” he said.  For instance, U.S. Veterans Affairs created a new insurance program for veterans that wiped out his slim margins on medications.

“It’s way off the profitability scale,” he said.

At the same time, Hernandez said he vowed to find ways to continue to help veterans.

“I still wanted to make sure I could take care of them,” he said. “I’ve got many friends and family who are veterans.”

As a result, he said he tries to work with veterans to get to a pricing level that helps them.

“It’s a tough situation for these guys (veterans),” he said.

Hernandez said that at one time in the 1980s Ashland had as many as five drug stores.

U.S. Sen. Ron Wyden, D-Oregon, has raised alarms about the squeeze on profitability at pharmacies by insurance companies and Big Pharma middlemen.

Wyden made a personal appearance at Ashland Drug in 2023 to highlight what he called a network of “unchecked” middlemen who set fees and hurt pharmacies to sustain the tremendous profits of the pharmaceutical companies.

“This pharmacy news from Southern Oregon is one more painful piece of evidence that demonstrates the urgent need for reforms that help to halt these closures and consolidations with solutions that tackle troubling practices by pharmacy benefit managers and more,” said Wyden, a ranking member of the Senate Finance Committee, in an email response to Ashland.news. “The ongoing closures and consolidations of pharmacies in smaller towns like Ashland hurt consumers’ ability to have options for the prescription drugs they depend on as a key part of health care for them and their loved ones.”

Across Oregon, pharmacies have been closing, hitting rural counties the hardest, including the closure of the Ashland Bi-Mart pharmacy in 2021.

An analysis by the Associated Press last year found Oregon had the second fewest retail pharmacies per capita in the nation, second only to Alaska.

According to an Oregon Public Broadcasting article on Aug. 12, Rite Aid had placed 40 stores on its closure list since it entered Chapter 11 bankruptcy in 2023.

Reach freelance writer Damian Mann at dmannnews@gmail.com.