Illegal imports of pharma products can be fined millions for Canadian pharmacy

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Kristian Thorkelson, founder of the Canada Drugs started the company in 2001 and promoted it as a safe alternative for patients to save dollars on expensive drugs and hailed as an industry pioneer.

Now, Canada Drugs an online pharmacy expected to be fined $34 million for illegal importing of counterfeit cancer drugs and other spurious pharmaceuticals products into the United States.

One advocacy group called this fine is too light for such a heinous crime.

During the hearing, U.S. prosecutors clearly said that Canada Drugs’ business model is based entirely on illegally importing of unapproved and misbranded drugs not just from Canada, but from all over the world. $78 million of illegal imports, including two that were counterfeit versions of the cancer drugs Avastin and Altuzan that had no active ingredient, has been imported by the company. It took two years of struggle to get the international company to appear in U.S. court to face the felony charges. Thorkelson and his company asked for a plea deal with prosecutors late last year.

US court judge Missoula, Montana, will decide whether to approve federal prosecutors’ recommended sentences that include $29 million forfeited, $5 million in fines and five years’ probation for Canada Drugs. The recommendation for Thorkelson is six months’ house arrest, five years’ probation, and a $250,000 fine. The company will also cease the sale of all failed, misbranded and counterfeit drugs and will surrender all of the domain names for the myriad websites it used to sell the drugs.

Dana Christensen, U.S. District Judge also wanted the strict punishment to stay in the sentences, and an advocacy group is urging the judge to impose harsher penalties to deter future crimes.

Selling of unapproved oncology medications is the heinous health care crime and is nearly untraceable like if you give saline in a bottle to the cancer patient, there is no evidence in the patient of the crime.

The case is being handled in the U.S. state of Montana, where Canada Drugs bought another company for its drug inventory and customer list when it was expanding in 2009. Canada Drugs continued to deposit money into that company’s Montana bank account from doctors’ purchase of the illegally imported drugs before the proceeds were shipped to offshore accounts in the Caribbean, prosecutors said.

The company and two overseas subsidiaries agreed to plead guilty to introducing misbranded drugs into interstate commerce, and the subsidiaries also agreed to plead guilty to selling counterfeit drugs.

Thorkelson agreed to plead guilty to knowing about and concealing a felony crime.

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