The company was purchased by J. C. Penney in 1968, and was expanded greatly thereafter, serving as the flagship chain of J.C. Penney's pharmacy group. The chain did not hide its affiliation with J.C. Penney, as it had J.C. Penney catalog merchandise pickup centers inside many of its locations, as well as signs advertising "J.C. Penney Catalog Center". Stores also accepted the J.C. Penney credit card for purchases.
In 1996, JCPenney purchased Eckerd, another pharmacy chain. The U.S. Federal Trade Commission (FTC) objected to the purchase on antitrust grounds, stating that ownership of Eckerd would give Penney a dominant position in the drug store business in the states of North Carolina and South Carolina through its ownership of Thrift Drug, Rite Aid, and Eckerd. The FTC ultimately approved of the transaction, but as a condition of approval, in 1997 Penney and Thrift were required to divest 14 Thrift drug stores in Charlotte and 20 Thrift stores in Raleigh-Durham, as well as all of Rite Aid's 110 locations in the state of North Carolina and that chain's 17 locations in Charleston. As a result, J.C. Penney divested 164 stores in the Carolinas. The divested stores were purchased by an investment group led by former Thrift Drug executives who left J.C. Penney after the Eckerd transaction. These stores became the Kerr Drug chain, using the name of a former Carolinas chain that J.C. Penney had acquired in 1995.
After acquiring Eckerd, in 1997 J.C. Penney merged Thrift Drug and all other pharmacy chains into the larger Eckerd chain (now CVS Pharmacy and Rite Aid).
One enduring legacy of Thrift Drug was in the 1977 movie Slap Shot, when a Thrift Drug that was located in downtown Johnstown, Pennsylvania was shown in the background during a shot of downtown Charlestown (the town that Johnstown portrayed in the film), alongside other now-defunct retailers such as Woolworth (who still exists today as Foot Locker but closed their namesake chain in 1997) and competitor Revco (which was later acquired by CVS Pharmacy). Also shown was a location of Thrift Drug's nominal successor (through Eckerd) and fellow Pennsylvania pharmacy, Rite Aid. Due to Rite Aid's connection to Thrift Drug through Eckerd, Rite Aid accepts J.C. Penney credit cards despite having otherwise had no corporate affiliation with J. C. Penney.