WALGREENS AGREES TO PAY $1.33M

Walgreens officials have agreed to a $1.33 million settlement to resolve
claims most of their Oklahoma stores failed to monitor the sale of cold
medicine containing pseudoephedrine, an ingredient in the illegal
manufacture of methamphetamine.

"We believe there's little to be gained by litigating this," said Tiffani
Bruce, Walgreens spokeswoman. "We'd much rather be spending money fighting
meth abuse than spending money fighting lawsuits." The settlement requires
the Deerfield, Ill.-based company to pay $1,333,333 in penalties to various
state and federal agencies, said U.S. Attorney Robert G. McCampbell. The
settlement resulted from negotiations between McCampbell's Western District
of Oklahoma office and Walgreens officials after city, state and federal
investigators say they discovered many of the company's drugstores were
breaking the Oklahoma pseudoephedrine law. Stores cannot sell more than 9
grams of pseudoephedrine to a customer in a 30-day period, according to a
state law enacted in April 2004. The law requires pharmacists or clerks to
track a customer's purchase with a store logbook. "The facts show that
Walgreens was careless," McCampbell said Thursday while announcing the
settlement. "But if you're selling pseudoephedrine, you can't be careless."
Scott Rowland, attorney for the Oklahoma Bureau of Narcotics and Dangerous
Drugs, said Thursday that almost 50 Walgreens stores were still violating
the state law to varying degrees during his agency's investigation of the
pharmacy chain.

The investigation began last fall and ended this month. U.S. Attorney David
O'Meilia said the settlement demonstrates the effectiveness of the
pseudoephedrine law and how pharmacies' compliance is crucial to stopping
meth production. "The absolutely necessary compliance by businesses that
sell the product in various forms has been extremely successful in
preventing the meth cooks from obtaining the key ingredient in their
illicit recipes," said O'Meilia, the attorney for the Northern District of
Oklahoma. The number of meth lab seizures each month has declined steadily
since the law was enacted, according to the state narcotics bureau.

That month, 57 meth labs were seized.

In May, six meth labs were seized. Also as part of the settlement,
Walgreens must begin training its employees in compliance with the
pseudoephedrine law. Internal officers must be appointed who will submit
annual reports to law enforcement agencies. Walgreens also must hire an
independent agency to monitor compliance among its Oklahoma stores.

Sidebar Settlement details Walgreens' $1.3 million settlement was
distributed Wednesday to state and federal agencies involved in the
investigation and negotiations. Distributions include:

$333,333 to U.S. Western District of Oklahoma

$333,333 to U.S. Eastern District of Texas

$333,333 to Oklahoma Bureau of Narcotics

$166,666 to Garfield County District Attorney's office

$166,666 to Enid Police Department Source:

U.S. Attorney's office, Western District of Oklahoma

Walgreens also must invest about $1 million for an electronic system to
monitor pseudoephedrine purchases at its 67 stores in the state.