February 17, 2010

Dear Valued Duane Reade Customer:

I am writing today to share with you some very exciting news. As you may have already heard, Duane Reade has accepted an offer to become part of Walgreens - the largest and most respected drug store chain in the U.S. We are delighted to become a vital part of Walgreens, and pleased that we will continue to serve you as Duane Reade, a name New Yorkers know well.

Walgreens has selected us as their partner in the New York metro area because of our knowledge of the market and the unique approach we have taken to transforming our business. We view this recognition as a testament to the strong relationship we have with you, our valued customers, as the many positive changes we have made to date are based upon your feedback and ideas.

What does today's announcement mean for you? We will continue to improve, now with the help of one of America's most trusted companies. Our number one priority is to serve you and live up to our brand mantra of New York Living Made Easy.

Rest assured that the prescriptions you have on file with Duane Reade will remain intact and your ability to fill or re-fill prescriptions at your local Duane Reade pharmacy will not be affected. We will continue to accept your insurance plans as we have, and you will continue to find the products and services you have come to expect from us.

We appreciate this news may prompt some questions. Below you will find a few Frequently Asked Questions with answers, and we encourage you to call us at 1-866-DR-LOYAL.

As always, thank you for making us a part of your life in New York.

Sincerely,

John Lederer
Chairman and CEO
Duane Reade

Duane Reade and Walgreens: Frequently Asked Questions

Will you be closing any Duane Reade stores?

Walgreens and Duane Reade's stores are largely complementary. As opportunities come up, we may relocate some locations to more convenient sites as we do today.

What changes will I notice in my shopping experience now that Duane Reade is part of Walgreens?

We will continue to transform Duane Reade in ways that matter to New Yorkers, improving our stores and customer service, and adding exciting and locally relevant products and services. We expect that over time many of the benefits of being a part of a larger, national organization will positively impact the customer experience.

Will the process to fill my Duane Reade prescription change?

The process to fill your Duane Reade prescription will not change, although it's likely we will implement improvements in time.

Can I transfer my Walgreens prescription to Duane Reade and vice versa?

The two businesses will operate separately, including the prescription systems for the time being. At this time, Duane Reade patients will not be able to access their prescriptions at Walgreens stores without a telephone transfer, and vice versa. For patients who have insurance plans that are accepted at both Walgreens and Duane Reade, their co-pays will not change.

Will I be able to order my prescription at Walgreens and pick it up at Duane Reade or vice versa?

At least for now, prescriptions ordered at Duane Reade may only be picked up at Duane Reade locations.

Will Duane Reade honour Walgreens' prescription prices and vice versa?

For patients who have insurance plans that are accepted at both Walgreens and Duane Reade, their co-pays will not change. Cash prices may continue to vary between Walgreens and Duane Reade.

Will you continue to expand Doctor on Premises or will you shift to Walgreens' walk-in clinics?

We have no plans to replace our Doctor on Premises walk-in health care locations with Take Care Clinics.

Will Duane Reade change its immunization programs?

We have no immediate plans to change our immunization programs.

How will Duane Reade's PBM network be impacted by the Walgreens acquisition?

Duane Reade's PBM network will continue as it is.

Will Duane Reade start carrying some of Walgreens' private label merchandise or vice versa?

We will continue with the product categories and lines that we currently offer, including our growing family of exclusive private brands, yet remain open to exciting new opportunities as they arise.

Will brands that are exclusive to Duane Reade remain as such?

Duane Reade remains committed to its merchandising program developed specifically for New Yorkers. We will continue to carry many exclusive brands and products including our growing family of private brands such as DR Delish and Apt. 5.

What will happen to my FlexRewards points?

Duane Reade's FlexRewards program will remain unchanged for the foreseeable future.