NEW RITE AID, LLC

During fiscal 2021, approximately 39.6% of our pharmacy sales were to customers covered by Medicare Part D.

We believe that our pharmacy operations will continue to represent a significant part of our business due to a combination of our efforts to expand the role of our approximately 6,400 pharmacists as whole-being health advocates; demographic trends such as an aging population and increased life expectancy; our focus on growth customers, particularly women between the ages of 25 to 49 who take care of themselves, their children, aging parents, and even pets; anticipated growth in the federally funded Medicare Part D prescription program as “baby boomers” continue to enroll; and the discovery of new and better prescription drug and over-the-counter therapies.

Our goal is to produce superior results for our clients and their members/employees by leveraging our expertise in core PBM services, including: plan design offerings and administration, formulary management, Medicare Part D services, mail order, specialty pharmacy services, retail pharmacy network management services, clinical services, disease management services, and other spend management.

During fiscal 2023, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 19.9% of the Company’s pharmacy sales, the largest of which was approximately 6.6% of the Company’s pharmacy sales.

During fiscal 2022, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 18.2% of the Company’s pharmacy sales, the largest of which was approximately 2.1% of the Company’s pharmacy sales.

During fiscal 2021, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 17.9% of the Company’s pharmacy sales, the largest of which was approximately 1.3% of the Company’s pharmacy sales.

During fiscal 2020, state sponsored Medicaid agencies and related managed care Medicaid payors accounted for approximately 19.0% of the Company’s pharmacy sales, the largest of which was approximately 1.4% of the Company’s pharmacy sales.

Any significant loss of third-party payor business could have a material adverse effect on the Company’s business and results of operations.During fiscal 2023, the Company purchased brand and generic pharmaceuticals, which amounted to approximately 98% of the dollar volume of its prescription drugs from McKesson Corporation (“McKesson”) under its expanded agreement executed on February 17, 2014 and amended in fiscal 2019 for its pharmaceutical purchasing and distribution whereby McKesson assumed responsibility for purchasing essentially all of the brand and generic medications the Company dispenses as well as providing a new direct store delivery model to all of the Company’s stores.

Any significant loss of third-party payor business could have a material adverse effect on the Company’s business and results of operations.During fiscal 2022, the Company purchased brand and generic pharmaceuticals, which amounted to approximately 99% of the dollar volume of its prescription drugs from McKesson Corporation (“McKesson”) under its expanded agreement executed on February 17, 2014 and amended in fiscal 2019 for its pharmaceutical purchasing and distribution whereby McKesson assumed responsibility for purchasing essentially all of the brand and generic medications the Company dispenses as well as providing a new direct store delivery model to all of the Company’s stores.