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The drugstore Walgreens will pay $7.9 million to federal and state governments as part of a settlement, after being accused of offering illegal incentives to customers to transfer their prescriptions to Walgreens pharmacies.

Walgreens published advertisements offering $25 gift cards to customers transferring their prescriptions. It is a violation of federal law to offer such incentives to people enrolled in government-run health care programs such as Medicare and Medicaid.

The drugstore chain's advertisements typically noted that such offers didn't apply to those insured via Medicaid, Medicare and similar programs. But the government claimed "Walgreens employees frequently ignored the stated exemptions on the face of the coupons and handed gift cards to customers who were beneficiaries of government health programs." –CNN

The federal government will receive about $7.3 million in the settlement; the remaining $0.6 million will go to state governments who participated in the investigation against Walgreens.

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