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ARBOR DRUGS, INC. ANNOUNCES DEVELOPMENTS

 TROY, Mich., July 7 /PRNewswire/ -- As previously reported by Arbor Drugs, Inc. (NASDAQ-NMS: ARBR), one of its largest third-party insurers has been reviewing the company's reimbursement practices. The insurer, Blue Cross of Michigan, recently advised the company of its preliminary findings. In a meeting last week, Blue Cross asked that the company reimburse it in excess of $17 million to settle claims that the company has, for several years, received reimbursement in excess of those provided for in the agreements between Blue Cross and the company. Blue Cross representatives also stated that the company must change its future billing practices. The company disagrees with the Blue Cross interpretations of these agreements and with the positions taken by Blue Cross. Further discussions with Blue Cross are scheduled. The impact of these matters on current and future earnings cannot be determined at this time.
 In a related development, the company has been advised that the United States Attorney for the Eastern District of Michigan is investigating the company's third-party reimbursement practices for possible criminal violations. The company does not believe that it has engaged in any conduct that should result in criminal charges being brought.
 Arbor Drugs, the nation's 20th-largest drugstore chain, operates 138 stores, all in Michigan.
 -0- 7/7/93
 /CONTACT: Gilbert Gerhard, chief financial officer, Arbor Drugs, 313-643-9420/
 (ARBR)


CO: Arbor Drugs, Inc. ST: Michigan IN: REA SU:

ML -- DE003 -- 8929 07/07/93 08:49 EDT
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Publication:PR Newswire
Date:Jul 7, 1993
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