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Pharmacy Alert: Rochester Drug Cooperative, Following Bankruptcy, Ramps up Litigation against Pharmacies

The demise of Rochester Drug Cooperative ("RDC") continues, and this time it is retail pharmacies that must beware of the fallout. In March 2020—following numerous private, state and federal government-led lawsuits accusing RDC of being complicit in the opioid crisis—RDC filed for bankruptcy and sought to wind down its operations. As part of this, however, RDC is permitted, and has been, aggressively commencing litigation against retail pharmacies for allegedly failing to make payments owed for inventory purchases. In many of these collection actions, pharmacy owners who personally guaranteed sums owed to RDC have been named as a defendant as well.

As the sixth largest wholesaler in the country and specifically as a primary vendor of many retail and community-based pharmacies, this has left numerous pharmacies and their owners exposed to the risk of litigation at a time when business is suffering across the board. In our role as litigation counsel to pharmacies already served with complaints by RDC, we are well-acquainted with RDC's strategy in these cases. Pharmacies already served with complaints should not expect this to simply go away, as RDC has aggressively pursued default judgments against both the pharmacies and the owners who failed to appear and answer complaints. The shutdown of the New York State court system due to COVID-19 delayed these actions temporarily, but with the current reopening of the court system, we expect RDC to continue litigating existing actions and commencing new ones. Pharmacies who may be in arrears with their payments to RDC are therefore well-advised to begin crafting a legal defense strategy.

If your pharmacy was already served with a complaint by RDC, or for any other litigation matter, please feel free to contact our litigation team at info@mdrxlaw.com or by calling us at 212-668-0200.

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Monday, November 23, 2020