CanadaDrugs.com
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
CanadaDrugs.com was an online pharmacy based in Winnipeg, Manitoba, founded in 2001 by pharmacist Kristjan Thorkelson as an offshoot of a local pharmacy chain. One of the first Canadian internet mail-order pharmacies, it became Canada's largest, filling more than one million prescriptions worldwide and offering Americans low-cost prescription drugs from Canada and other countries.
02 / CanadaDrugs.com FAILURE REASONS
Failure reasons
CanadaDrugs.com was destroyed by a U.S. criminal case over counterfeit and unapproved drugs. Between 2009 and 2012, the company and its affiliates in the U.K. and Barbados imported more than $78 million in unapproved, misbranded and counterfeit pharmaceuticals into the United States, including counterfeit versions of the cancer drugs Avastin and Altuzan that contained no active ingredient. U.S. prosecutors charged the company with smuggling, money laundering and conspiracy in 2014; Health Canada suspended its licence, and a 2015 RCMP raid seized assets. The company's wholesale model of importing drugs to undersell U.S. prices collapsed under the weight of the criminal case, and it pleaded guilty in 2018.
03 / EVENT HISTORY
Events in the structured record
- Operations ended
CanadaDrugs.com ended operations.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Pleaded guilty to introducing misbranded drugs into interstate commerce; two overseas subsidiaries pleaded guilty to selling counterfeit drugs.
- 02
Sentenced on April 13, 2018 to five years probation and $34 million in fines and forfeitures ($5 million fine plus $29 million forfeiture); founder Kristjan Thorkelson received six months house arrest, five years probation and a $250,000 fine.
- 03
Surrendered the domain names used to sell drugs to Americans and permanently ceased sales of unapproved, misbranded and counterfeit drugs.
- 04
Ceased operations on July 13, 2018, after 17 years in business.
- 05
No reliable disclosed figure exists for a realized business loss; the $34 million was a court-ordered fine and forfeiture, and the $78 million was illegal-import revenue, neither of which qualifies as a realized loss.