Costco under investigation by Ontario forensic team over drug company payments

The Ontario Government Forensic Audit Team (PST) is investigating payments made by a drug manufacturer to Costco’s pharmacy.

The retail giant has potentially received $1.2 million in illegal payments from generic drug maker Ranbaxy, according to the CBC’s The Fifth Estate.

The YVS specializes in “mischief allegations against the government,” according to its leader.

The revelations surfaced as two company managers pleaded guilty to professional misconduct before the Ontario College of Pharmacists.

The Order accused Joseph Hanna and Lawrence Varga of demanding illegal payments from the manufacturer Ranbaxy Pharmaceuticals.

The two pharmacists were fined $20,000 in addition to having to reimburse $30,000 in fees.

At the time of the decision, in January 2018, Costco had already received $1.2 million in potentially illegal payments. The company did not have to repay this money.

A former Ranbaxy salesman, Tony Gagliese, sounded the alarm by filing a lawsuit against Costco with the Ontario College of Pharmacists.


These allegations point to a questionable practice by pharmacists of collecting commissions that drug companies pay them for a good placement on tablets.

Most Canadian provinces tolerate these commissions, but Ontario made them illegal in 2013 to reduce the price of generic drugs.

“You say commission. I prefer to call it bribes, “says Amir Attaran, a professor of medicine and law at the University of Ottawa.

The province had argued that generic drug companies could lower the price it offers patients if pharmacists stopped charging commissions.

Canadians are among those who pay the most for generic drugs worldwide. Last year’s spending is estimated at $ 6 billion.

The Supreme Court validates the law

Several industry players have tried to overturn Ontario law in the Supreme Court of Canada.

The country’s highest authority, however, validated the law in 2013, while calling the commissions a “tenacious problem”.

The Government Forensic Audit Team launched its investigation into Costco’s practices last fall.

This team conducts civil investigations and transmits its findings to the authorities who can then open criminal investigations.

Payments have stopped

Costco CEO Craig Jelinek and company head of Canada Andrée Brien both refused to give interviews.

In a written statement, Andrée Brien says she was unaware that the payments were illegal at the time of the facts.

According to her, payments ceased as a result of an internal investigation.

It also argues that this practice has benefited consumers by allowing Costco to reduce its prices.

According to Costco, the payments were not commissions because the company used the money to do “marketing support”.

In Ontario, the retailer was asking Ranbaxy to make the payments by investing in what Costco called its “Consumer Education and Advertising Program”.

In her response, Andrée Brien noted that in her decision, the Ontario College of Pharmacists wrote that Costco employees operated in a legal environment that was unclear.

David Slater

David was born and raised in Dildo Newfoundland and loves to share his passion for health and technology with others. Apart from running his own podcast (Moose Soup For The Soul), which uploads weekly videos that cover ground-breaking new technology in the medical field, he spends his time canoeing and backpacking.. he recently spent a summer working at the CFIA as a software engineer. In regards to academics, David studied Electrical Engineering & Computer Science at Guelph University. There are several ways to contact David here.

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