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August 20, 2004

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Rx Depot Agrees in Consent Decree to Cease Importing Unapproved Drugs from Canada

The Food and Drug Administration (FDA) today announced the filing of a Consent Decree of Permanent Injunction against Rx Depot, Inc., Rx of Canada, LLC, and individual officers based on violations of the Food, Drug, and Cosmetic Act (the Act). In the Consent Decree, the firms and corporate officers Carl Moore and David Peoples admitted liability for causing the importation of unapproved new drugs and U.S.-manufactured drugs in violation of the Act and agreed to permanently cease such activities.

The defendants caused the illegal importation of prescription drugs from Canada . The defendants accepted prescriptions from U.S. customers, sent these to a Canadian pharmacy partner, and received a commission from the Canadian pharmacy when the pharmacy sent prescription drugs directly to the U.S. customers.

"The defendants' illegal importation of drugs posed a significant public health threat," said FDA Acting Commissioner Dr. Lester M. Crawford. "This Consent Decree sends a clear signal that those who would put profit before safety will not be allowed to threaten the public health."

The Department of Justice, Office of Consumer Litigation, and the United States Attorney's Office for the Northern District of Oklahoma filed the Consent Decree in the United States District Court for the Northern District of Oklahoma. The defendants agreed to this Consent Decree following an evidentiary hearing and a November 6, 2003 preliminary injunction order that preliminarily prevented them from causing the importation of or profiting from the sale of any unapproved new drugs, misbranded drugs, or U.S.-manufactured drugs.

In the Consent Decree, the defendants represent that Rx Depot and Rx of Canada have permanently ceased operations and that all defendants, including Moore and Peoples, have ceased causing the importation of unapproved new drugs, misbranded drugs, and U.S.-manufactured drugs or receiving a commission from these activities. The Decree also permanently restrains all defendants from any illegal importation of prescription drugs. Finally, the Decree provides FDA with inspection authority to ensure compliance and penalizes the defendants $4,000 per day for any violation of the Decree.

The defendants' businesses posed a significant public health threat because unapproved drugs that are imported from foreign countries and U.S.-manufactured drugs that are imported back into the U.S. by parties other than the U.S. manufacturer do not have the same assurance of safety and efficacy as drugs that are regulated by FDA. Because these drugs are not subject to FDA oversight and are not continuously under the custody of a U.S. manufacturer or authorized distributor, their quality is unpredictable. They could be outdated, contaminated, counterfeit, or contain erratic amounts of the active ingredient or different excipients. Also the drugs may have been held under uncertain storage conditions that may have had a deleterious affect on their therapeutic use.

Rx Depot, Rx of Canada, Moore, and Peoples have signed and consented to the filing of the Decree, which will take effect after it has been signed and entered by the Court. The parties agreed to leave to the Court the issue of whether the defendants should make restitution to consumers and/or disgorge their unlawful profits.


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