Feds nail key player in counterfeit Avastin probe

For more than a year, U.S. authorities have been tightening a noose around Internet pharmacy company Canada Drugs, which reportedly was the source of counterfeit Avastin shipped last year to doctors. Authorities have tried shutting down its Internet provider and put a chill on its business by prosecuting a doctor that bought unapproved foreign cancer drugs through an affiliate. Now they have nailed one of its key salesmen. 

Paul Bottomley, who worked on contract for Montana Healthcare, is expected to plead guilty today to a federal charge that he essentially covered up a felony, The Wall Street Journal reports. Montana Healthcare is the subsidiary of Canada Drugs through which doctors allegedly bought the fake Avastin. 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 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 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 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 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.

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