Price-Gouging At Walgreens Stores Leads To Settlement For Santa Cruz County

SANTA CRUZ COUNTY, CA — Santa Cruz County will receive more than half a million dollars from a settlement linked to a price-gouging and drug-safety investigation involving one of the nation’s largest pharmacy chains.

A coalition of prosecutors across nine California counties secured a $6 million settlement with Walgreens after investigators found the company violated consumer protection laws tied to pricing accuracy and product safety.

California prosecutors say a routine set of inspections exposed a troubling pattern inside Walgreens drug stores—charging customers from too much and leaving expired products on shelves.

Prosecutors built the case on scanner inspections that showed Walgreens stores charged customers more than the lowest advertised or posted price, according to an announcement from the Santa Cruz County District Attorney's office.

Investigators also documented instances where stores offered over-the-counter drugs for sale after their expiration dates.

A court ordered Walgreens to pay $5.4 million in civil penalties and an additional $600,000 to reimburse district attorney offices or investigative and legal costs.

Each of the nine counties — from Alameda to Yolo county — will receive a share of the settlement.

A total of $644,500 will be payable to Santa Cruz County. Another $22,331 will be reimbursed to the county's Department of Weights and Measures, which provided "invaluable expertise in this consumer action," Santa Cruz County District Attorney Jeffrey S. Rosell said in a statement.

The agreement also forces operational changes inside Walgreens stores. The company must implement a three-year compliance program that requires managers to conduct monthly inspections of shelves stocked with medications, baby food, and formula to remove expired items.

Managers must also perform weekly store walks to correct inaccurate sales tags and post signage explaining the company’s “Price Promise Guarantee,” which ensures customers pay the lowest advertised price if discrepancies arise at checkout.

During the time period covered by this settlement, Walgreens operated approximately 580 stores in California. There are four stores in Santa Cruz county.

The suit was led by the San Mateo County District Attorney's Office and joined by district attorneys in Alameda, Contra Costa, San Bernardino, San Diego, San Joaquin, Santa Clara, Santa Cruz and Yolo counties.

"I am pleased with the outcome of this consumer action as this corporation was held appropriately accountable for its continued violation of consumer protection laws," Rosell said.

"Our office remains steadfast in its mission of protecting the safety of our consumers and ensuring they are not subject to continued unfair business practices," he said.