A U.S. bankruptcy judge has approved Rite Aid Corp's (RADCQ  ) restructuring plan, enabling the pharmacy chain to reduce its debt by $2 billion and transfer control to a group of lenders.

Rite Aid filed for Chapter 11 bankruptcy in October 2023, following a fiscal year in which it reported $750 million in losses and $24 billion in revenue.

During the bankruptcy process, Rite Aid closed hundreds of stores, sold its pharmacy benefit company Elixir, and negotiated settlements with lenders, including its drug distribution partner McKesson Corp (MCK  ) and other creditors.

Reuters noted the restructuring saved the company from having to cease operations entirely.

The restructuring plan also allocated $47.5 million to junior creditors, including individuals and local governments that have sued Rite Aid for its alleged role in the U.S. opioid epidemic.

Before filing for bankruptcy, Rite Aid faced 1,600 opioid lawsuits, including one from the federal government, accusing the company of ignoring red flags when filling prescriptions for addictive opioid pain medications.

Rite Aid has resolved opioid claims with 16 of the 17 states in which it operates. Judge Kaplan overruled Maryland's objection, stating that the state could not delay Rite Aid's bankruptcy to continue its investigation into the company's opioid sales.

Rite Aid, which had more than 2,000 stores at the time of its bankruptcy filing, will emerge from bankruptcy with about 1,300 locations. The company plans to exit bankruptcy within a month.

It's a trend that Jonathan Palmer, senior health care analyst at Bloomberg Intelligence, projected will continue especially as the dependency on online services continues to grow.

Earlier, Walgreens Boots Alliance Inc (WBA  ) announced that it would close a "significant" number of underperforming stores across the U.S. due to ongoing challenges with profitability and declining margins.

In 2021, CVS Health Corp (CVS  ) announced that it was shuttering 900 of its 10,000 retail locations over a three-year period.

Palmer told FOX Business that the closures were the culmination of several different events, but online pharmacies contributed to their downfall.

"More consumers buy online than ever before and with next-day delivery in many cases - the value proposition of retail pharmacy isn't as compelling," Palmer said.

He argued that pharmacies are convenient for household products but aren't cheap.

"They're at a significant premium to a Walmart Inc (WMT  ) or a Target Corp (TGT  )," Palmer said.

He noted that, in addition, "reimbursement for dispensing drugs has been pressured by managed care and payers for years." There have also been more alternatives than ever before, such as Amazon Pharmacy (AMZN  ), GoodRx (GDRX  ), or Mark Cuban's Cost Plus.