Feds get conviction in counterfeit Avastin case

Top salesman for Montana Health Care Solutions says he knew Canada Drugs was breaking the law
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For years, the FDA has been trying to keep consumers from buying drugs from foreign Internet pharmacies, citing the chance they may get substandard or even counterfeit drugs. That effort ratcheted up heavily a year ago, after counterfeit Avastin turned up in the U.S. and it appeared that the owner of a Canadian Internet pharmacy might have imported it. Now one of the key players in that investigation has pleaded guilty to playing a part in the operation. 

U.K. citizen Paul Bottomley pleaded guilty on Wednesday to a federal charge that he essentially covered up a felony, the Bozeman Daily Chronicle reports. Bottomley worked on contract for Montana Health Care Solutions, a subsidiary of Canada Drugs through which doctors allegedly bought the fake Avastin, The Wall Street Journal says. Documents filed in the case said Bottomley failed to contact authorities even though he was aware that Canada Drugs was violating federal law by shipping illegal drugs into the U.S. Bottomley last month handed over $1 million, 10 parcels of land, and a 2011 Aston Martin as part of the case.

In February 2012, the FDA and Avastin maker Roche ($RHHBY) notified doctors that what they believed were vials of the cancer drug were a counterfeit that contained starch and salt but no active ingredient. The Wall Street Journal reports that employees of an offshore company owned by Winnipeg-based Canada Drugs acknowledged that the business shipped the drugs but said they were unaware they were fake.

Since then, federal authorities have kept up pressure. In October they tried to shut down the Internet service for CanadaDrugs.com, but the company moved its sites to a new provider. They prosecuted a Tennessee doctor who pled guilty to charges that he ordered cheap foreign versions of cancer drugs from a now-defunct subsidiary of Canada Drugs and charged Medicare full price. Authorities also apprehended and prosecuted a former competitor who sold his Canada Internet pharmacy to Kris Thorkelson, owner of Canada Drugs, and eluded U.S. charges by moving to the Caribbean. 

Thorkelson has not commented about the business since the probe began, but employees have denied doing anything illegal. They contend that the company provides a service by offering cheaper drugs to patients in need. Canada Drugs did shut down the subsidiary that wholesaled drugs to U.S. doctors, WSJ reports. Last week the Winnipeg Sun, citing sources, reported that Canada Drugs had laid off hundreds of employees. Officials with the company could not be reached, but a customer service employee told FiercePharma that the story was wrong and only 17 employees had been let go.

Bottomley faces up to three years in prison, a $250,000 fine and one year of supervised release, The Chronicle reports. He is slated to be sentenced July 31.

- here's the Bozeman Daily Chronicle story
- here's the WSJ story (sub. req.)
- more from the Winnipeg Sun

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