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)

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

Alberta Premier Jason Kenney updates media on measures taken to help with COVID-19, in Edmonton on Friday, March 20, 2020. Alberta is set to join three other provinces in exploring the feasibility of small modular reactors as a clean energy option. THE CANADIAN PRESS/Jason Franson
Four provinces to sign memorandum of understanding to explore small nuclear reactors

Alberta, Ontario, Saskatchewan and New Brunswick sign memorandum of understanding

FILE - In this Nov. 17, 2016, file photo, Chris Kempczinski, then-incoming president of McDonald’s USA, speaks during a presentation at a McDonald’s restaurant in New York’s Tribeca neighborhood. On Wednesday, April 14, 2021, McDonald’s said the company will mandate worker training to combat harassment, discrimination and violence in its restaurants worldwide starting in 2022. (AP Photo/Richard Drew, File)
McDonald’s to mandate anti-harassment training worldwide

New standards starting in January 2022

Alberta Premier Jason Kenney updates media on measures taken to help with COVID-19, in Edmonton on Friday, March 20, 2020. Alberta is set to join three other provinces in exploring the feasibility of small modular reactors as a clean energy option. THE CANADIAN PRESS/Jason Franson
Four provinces to sign memorandum of understanding to explore small nuclear reactors

Alberta government said in August that it would enter into the agreement to help diversify its energy sector

File photo
City of Wetaskiwin awarded $5.1 million grant for additional RCMP officers

10 Additional RCMP officers to serve the City of Wetaskiwin as a result of the grant.

In this Nov. 12, 1995, file photo, Buffalo Bills head coach Marv Levy looks on during the second quarter of the Bills game against the Atlanta Falcons at Rich Stadium in Orchard Park, N.Y. THE CANADIAN PRESS/AP/Bill Sikes, File
Former Alouettes head coach Marv Levy tops 2021 Canadian Football Hall of Fame class

The ‘21 class will boost the Hall of Fame’s membership to 316

Dr. Robert Strang, chief medical officer of health, provides an update on health system preparations in Nova Scotia for the coronavirus that causes COVID-19, in Halifax on Friday, March 6, 2020. Strang says plans are in place to stage the women’s world hockey championship in the province next month with limited spectators.THE CANADIAN PRESS/Andrew Vaughan
Nova Scotia plans to allow limited crowds at women’s world hockey championship

All 10 teams in Halifax and Truro must participate in a 14-day quarantine

”Kim’s Convenience” cast member Andrew Phung poses in this undated handout photo. “Kim’s Convenience” has just ended but Andrew Phung is already “knee-deep in ideas and stories” for his next project, “Run the Burbs.” The Calgary-raised actor, who played comical car-rental employee Kimchee on “Kim’s,” co-created the upcoming comedy series and will star in it as a stay-at-home dad with an entrepreneur wife and two kids. THE CANADIAN PRESS/HO - CBC
‘Kim’s Convenience’ actor Andrew Phung on crafting his own series, ‘Run the Burbs’

‘Run the Burbs’ production could start in the summer or fall

Canisia Lubrin poses in this undated handout photo. Rising literary talent Canisia Lubrin is among the Canadian finalists for the $65,000 Griffin Poetry Prize. The Griffin Trust announced the three homegrown wordsmiths and four international poets on this year’s short list on Wednesday. Lubrin, who recently received the US$165,000 Windham-Campbell Prize, is nominated for “The Dyzgraphxst” (pronounced diss-graff-ist), published by McClelland and Stewart. THE CANADIAN PRESS/HO - Anna Keenan
Rising writer Canisia Lubrin among Canadian finalists for $65K Griffin Poetry Prize

Griffin will award two winners, one international and one Canadian

A prairie fire in the Burnt Lake district. (Photo by Bert Fors via Red Deer Archives)
Michael Dawe: Fires of spring 1931 in central Alberta

Central Alberta has just come through a relatively warm and dry winter… Continue reading

Gwynne Dyer
Opinion: Boris Johnson is to blame for what’s happening in Ireland

Twenty-three years of peace in Northern Ireland, after a sectarian war that… Continue reading

Most Read