Real Canadian pharmacies cost Google $500 million dollars

Filed Under: Featured, Google, Law & order

Google pharmacy settlementDon't be evil? Don't count on it. Google agreed this week to a $500 million settlement with the US Department of Justice for selling advertisements to Canadian pharmacies through the AdWords advertising network.

Google had been informed as early as 2003 that Canadian pharmacies were illegally shipping prescription drugs to Americans as a result of ads on Google. While Google stopped allowing foreign countries (other than Canada) to place ads for drugs targeting Americans, Canadian pharmacies were allowed to continue the practice.

While many of us in Canada don't see what could be so dangerous about Americans purchasing our drugs at the reduced prices we pay under our system, the issue is far more complicated.

Canadian law protects our drug fulfillment system in a similar manner to the FDA in the United States, but our laws do not apply to drugs being sold by Canadian pharmacies outside of Canada. This allows for largely unregulated pills to be sold to foreigners with little oversight.

Additionally many of these pharmacies did not require US consumers to have a prescription from a licensed physician. For "premium" prices, Americans could acquire the drugs after only a consultation with a pharmacist.

Google not only allowed the continued illegal placement of ads targeting Americans, but documents show that the search giant assisted these pharmacies in bypassing the controls they had put in place to prevent the abuse.

Google was eventually caught in the act during a sting operation conducted by the US Attorney's Office of Rhode Island. Investigators created some fake pharmacy companies to investigate Google's practices for placing advertisements in opposition to their official policies.

The $500 million settlement represented the profits that Google made on the advertisements in question as well as the profits made on the drugs by the pharmacies placing the ads.

The US Department of Justice noted that this is one of the largest settlements in US history and that Google is now complying with US regulations.

It has been reported that Microsoft and Yahoo! were also accepting similar ads, but are not under investigation.

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15 Responses to Real Canadian pharmacies cost Google $500 million dollars

  1. Kieran · 1161 days ago

    So ? The US are just being greedy as-per-usual?

    • rox · 1155 days ago

      We can be greedy, we have the money. We have the freedom and ours is the best country in the world to live in. Only poor worthless people who have no hope attack the rich.

  2. jake · 1161 days ago

    So, bing d yahoo get to accept adds, but google doesn't? WTF!

    • Chester Wisniewski · 1159 days ago

      I think they weren't "encouraging" the fraud and are doing their best to not allow the placement of the ads.

      • Robert · 1128 days ago

        What "fraud"? They were selling exactly the same drugs as sold in the US, only at a minute fraction of the cost. The government is using its power to prop up the pharmaceutical industry's outrageous price-fixing. The big loser here is not Google, it is the American public.

  3. Steve Stumpff · 1161 days ago

    I think you are dead backward on "evil".

    The "evil" is the fact that re-importation of prescription drugs into the United States is illegal. We subsidize the entire world (including Canada) by paying substantially more for the same drug in the United States. All because our leaders are bought and paid for by the pharmaceutical lobby.

    I would expect a biased "half analysis" from Graham Clu-less, not from you.

    • Chester Wisniewski · 1159 days ago

      We are all entitled to our opinions... The problem here was not the re-importation of legal Canadian drugs, but drugs that do not necessarily meet the Canadian rules, nor FDA rules being sold by Canadian pharmacies.

      I am a US citizen as well and have paid this unnecessary tax on health for most of my life. If American's don't genuinely want to reform how their system works, then they will continue to pay higher prices.

      • Robert · 1128 days ago

        Most Americans want very much to reform out system. The Justice Dept. and the FDA don't care about the American people. They are out to serve their masters in the pharmaceutical industry. No one in the government cares if the drugs are good or not. It's all about the money.

  4. Joe · 1161 days ago

    Also the supposed drugs shipped were not always what was ordered. Key words in article "largely unregulated pills", sometimes substitutions are made, some of these are simply made of clay or compressed talc and there have reported instances of diluted doses and even overly high doses on some blood pressure meds. that I seem to remember reading about that was linked to a death but not it was not wholly proven. (someone had good lawyers!)

  5. Byue · 1160 days ago

    I don't care about the US at all, giant in decline creating fake companies to buy illegal drugs and suing the only company able to cough up the money, laughable. About the bigot who think his shit country is subsidizing the "whole world", really? Go read a non-fox news book and leave adults alone.

  6. Dan · 1160 days ago

    So....the US Government cares about our health and wants to reduce the cost of healthcare but fines Google $500million for helping the less fortunate find a way to do both. This is a sad snapshot of what is wrong with our system!

  7. gutsycall · 1160 days ago

    So why did our politicians REFUSE to allow us to negotiate drug prices rather than getting bilked an extra $138 billion per year. We have a right NOT to be taken by every CEO contributing to Congress for payback.

  8. Dean · 1160 days ago

    I don't buy the argument that drugs sold in Canada are riskier than drugs sold in the U.S. It's Canada, not Albania.

    • Chester Wisniewski · 1159 days ago

      Canadian law only requires the drugs being sold to Canadians to meet our regulatory rules. Some of these pharmacies were shipping sub-standard or fake pills, which is not prohibited if the pills are being exported.

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About the author

Chester Wisniewski is a Senior Security Advisor at Sophos Canada. He provides advice and insight into the latest threats for security and IT professionals with the goal of providing clear guidance on complex topics. You can follow Chester on Twitter as @chetwisniewski, on App.net as Chester, Chester Wisniewski on Google Plus or send him an email at chesterw@sophos.com.