A tentative plea agreement has been reached that would see a Winnipeg-based online pharmacy and two affiliated businesses fined millions of dollars for selling misbranded and counterfeit drugs in the United States. CanadaDrugs.com Director of Pharmacy Robert Fraser, left, takes then-Governor of Minnesota Tim Pawlenty, second from left, on a tour of the internet pharmacy, in Winnipeg. (Photo by THE CANADIAN PRESS)

Tentative deal reached in case of Canadian firm that sold cancer drug online

WINNIPEG — A tentative plea agreement has been reached that would see a Winnipeg-based online pharmacy and two affiliated businesses fined millions of dollars for selling misbranded and counterfeit drugs in the United States.

The agreement, which still has to be approved by a U.S. district court in Montana, would see Canada Drugs and two subsidiaries plead guilty, pay a US$5 million fine and forfeit US$29 million.

A separate plea agreement for the company’s president, Kris Thorkelson, would see Thorkelson pay a $250,000 fine and serve six months of house arrest followed by four and a half years of probation.

The deals would also require the company to surrender its domain names and stop any distribution of unapproved or misbranded drugs in the U.S.

Canada Drugs was charged with selling counterfeit cancer drugs online over a three-year period ending in 2012.

The U.S. Food and Drug Administration would not comment on the matter while it is still before the courts, and calls to Canada Drugs, Thorkelson and the company’s lawyer were not returned.

Winnipeg was the centre of a boom in online pharmacies in the early 2000s. Sales of relatively inexpensive Canadian drugs into the U.S. market grew rapidly, but the industry later consolidated as the Canadian supply became tighter.

A plea agreement filed in the Montana court says Canada Drugs and its affiliates will forfeit an amount that reflects, at a minimum, what they earned.

“The defendants admit that proceeds from misbranded and counterfeit pharmaceutical drugs they distributed … from January 2009 to January 2012 totalled at least $29 million in United States currency,” the document reads.

The Canada Drugs website continued to be up and running Friday.

A Health Canada inspection registry shows the company had its Drug Establishment Licence suspended by the department in 2014 after an inspection found several deficiencies including a problem with refrigerated storage equipment.

The licence was reinstated following another inspection that found the company in compliance with regulations.

The Canadian International Pharmacy Association, an industry group that represents more than 60 pharmaceutical websites, said Friday the charges in Montana relate only to former wholesale sales by Canada Drugs to clinics and other operations. The company continues to offer direct sales to individuals in the United States.

“That was a complete and separate business from the online pharmacy that they … have operated very successfully for over 15 years,” said executive director Tim Smith.

“They’re very well-liked by their customers. They’re very well-trusted by their customers.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

Keaton Wildeboer, of Lacombe, participates in the Westerner Championship Dairy Showcase at Westerner Park on Thursday. More than 150 cattle will be on display at the event, which continues until Saturday, carrying on a tradition started in 1954. (Photo by Sean McIntosh/Advocate staff)
Western Canada’s first dairy showcase since last fall begins in Red Deer

Western Canada’s first dairy showcase since last fall is currently being held… Continue reading

Car thief opening stolen car doors. 
(Black Press File Image)
Idling vehicles attracting thieves, RCMP warns

About one-third of stolen vehicles left idling unattended

Police reveal a collection of drugs, cash and guns seized in an April 2016 bust. One of the men charged was sentenced to 27 months in prison on Thursday.
Advocate file photo
Red Deer man sentenced to 27 months for role in “dial-a-dope” operation

RCMP Priority Crimes Task Force broke up drug operation in April 2016 after four-month investigation

Red Deer RCMP say a 30-year-old man faces sexual charges against a teen. (File photo by Advocate staff)
RCMP’s downtown traffic stops lead to charges

Two traffic stops conducted by Red Deer RCMP officers on bike patrol… Continue reading

Alberta Premier Jason Kenney arrives for an announcement at a news conference in Calgary, Alta., Tuesday, Sept. 15, 2020.	Kenney is isolating at home after one of his ministers tested positive for COVID-19. THE CANADIAN PRESS/Todd Korol
Alberta premier isolating after minister tests positive for COVID-19

Alberta Premier Jason Kenney is isolating at home

New York Giants' Evan Engram (88) tumbles after trying to leap over Philadelphia Eagles' Cre'Von LeBlanc (34) as Josh Sweat (94) defends during the second half of an NFL football game, Thursday, Oct. 22, 2020, in Philadelphia. (AP Photo/Derik Hamilton)
Carson Wentz rallies Eagles to 22-21 win over Giants

Carson Wentz rallies Eagles to 22-21 win over Giants

North Carolina State safety Jakeen Harris (6) tackles Virginia wide receiver Terrell Jana (13) during an NCAA college football game, Saturday, Oct. 10, 2020, at Scott Stadium in Charlottesville, Va. Jana's last name doesn't appear on the back of his Virginia Cavaliers football jersey as a tribute to enslaved labourers. THE CANADIAN PRESS/AP, The Daily Progress, Erin Edgerton
Canadian receiver Jana’s name missing from jersey to honour enslaved labourers

Canadian receiver Jana’s name missing from jersey to honour enslaved labourers

Tiger Woods hits from the 11th tee during the first round of the Zozo Championship golf tournament Thursday, Oct. 22, 2020, in Thousand Oaks, Calif. (AP Photo/Marcio Jose Sanchez)
Munoz in the lead and Woods with his worst score at Sherwood

Munoz in the lead and Woods with his worst score at Sherwood

The national anthem is performed ahead of the inaugural soccer match of the Canadian Premier League between Forge FC of Hamilton and York 9 in Hamilton, Ont. Saturday, April 27, 2019. Canadian Premier League champion Forge FC takes on El Salvador's CD Municipal Limeno in a CONCACAF League preliminary-round match Thursday. THE CANADIAN PRESS/Aaron Lynett
Forge FC scores late to win CONCACAF League preliminary-round game in El Salvador

Forge FC scores late to win CONCACAF League preliminary-round game in El Salvador

NHL cancels 2021 Minnesota Winter Classic, All-Star Weekend

NHL cancels 2021 Minnesota Winter Classic, All-Star Weekend

FILE - In this Jan. 24, 2020, file photo, Mariah Bell performs her senior women's free skate program at the U.S. Figure Skating Championships, Friday, Jan. 24, 2020, in Greensboro, N.C. When U.S. skaters and a few foreigners training in this country kick off the season at Skate America this weekend, it could be a rare opportunity to display their wares. So they will relish the chance to get on the ice for competition, knowing that two Grand Prix series events and the Grand Prix Final have been canceled due to the coronavirus pandemic, and prospects of national and word championships being held are uncertain.(AP Photo/Lynn Hey, File)
Skate America opens shortened, coronavirus-impacted season

Skate America opens shortened, coronavirus-impacted season

Kang, Song share lead in LPGA Drive On Championship

Kang, Song share lead in LPGA Drive On Championship

Vegas Golden Knights' Alec Martinez (23) is checked by Vancouver Canucks' Jake Virtanen (18) during first period NHL Western Conference Stanley Cup playoff action in Edmonton on August 23, 2020. The Canucks have signed Virtanen to a two-year contract with an average annual value of US$2.55 million. Virtanen had 36 points and 41 penalty minutes in 69 games in the 2019-20 season. THE CANADIAN PRESS/Jason Franson
Forward Jake Virtanen signs new two-year deal with hometown Vancouver Canucks

Forward Jake Virtanen signs new two-year deal with hometown Vancouver Canucks

Most Read