Kris Thorkelson, internet pharmacy pioneer

As the legend goes, when Kris Thorkelson was studying pharmacy at the University of Manitoba, his dean loaned him $250 to pay the fee for his provincial exam.

Today, Thorkelson is estimated to be worth hundreds of millions of dollars, and the U.S. Food and Drug Administration has named him in an investigation into an international wholesale drug distribution network that has allegedly sold counterfeit cancer drugs to American oncologists.

Thorkelson and several other graduates in the class of '91 have become the pioneers of Manitoba's lucrative internet pharmacy industry.

Thorkelson and fellow classmate Daren Jorgenson were partners right out of university, scraping together $7,500 each to buy a pharmacy in Winnipeg's North End.

"I would describe him as a nice person, quiet, not flashy — what most people would think of a pharmacist in terms of personality," Jorgenson said.

"Family is important to him. I never got the impression money was important to Kris, but success in business was."

Buying smaller pharmacies

By 1994, though, they went their separate ways, creating new companies that sold prescription drugs to people — mostly Americans — online.

Jorgenson eventually left the online pharmacy business, but Thorkelson was quietly buying up smaller companies.

"Kris became the biggest. He is now and has been for the last four to five years by far the biggest internet pharmacy shipping into the U.S. As the smaller pharmacies closed … Kris would buy them up. His growth strategy, a lot of it involved buying up their patient lists and refills," Jorgenson said.

Today, Thorkelson owns hundreds of internet domain names, and CanadaDrugs.com is believed to be the largest online pharmacy in Canada.

In 2006, Thorkelson donated $500,000 to the University of Manitoba's pharmacy program, which named a laboratory after him.

"We're small-town boys that get very rich, very fast, right?" Jorgenson said. "Dumb luck — I've said it from the very beginning. We're not strategic Harvard business graduates. We just got lucky to be in the right place at the right time," he added.

"We were doing the right thing at the beginning, we really were. We were sourcing product and helping people afford their medication and it was safe product going to people that needed it."

Uncertainty in drug supply chain

However, a combination of events introduced uncertainty into the drug supply chain.

First, the Canadian dollar increased in value, so American clients weren't saving as much money buying drugs from Canadian online pharmacies.

Then, the pharmaceutical industry limited its sales to internet pharmacies, choking their supplies and squeezing their profits.

Canada's internet pharmacies ventured into what is known as the parallel drug trade, made possible by the European Union. Wholesalers and pharmacies started buying low-cost drugs in one EU country and then reselling them at a higher price in another one.

Thorkelson's brother-in-law, Tom Haughton, is involved in that piece of the distribution network. He has set up dozens of online companies and distributors in the U.K. and Barbados.

Some of them are named in a U.S. grand jury subpoena that was recently obtained by CBC News.

Now, both Thorkelson and Haughton are people of interest in an international investigation into allegations that counterfeit versions of the cancer drugs Avastin and Altuzan were sold to U.S. oncologists.

The claims that have been made against both Thorkelson and Haughton have not been proven in court.

An official for CanadaDrugs.com denies any involvement.

Observers surprised

Roger Bate, who works with the American Enterprise Institute in Washington, D.C., has studied CanadaDrugs.com as part of his book PHAKE: The Deadly World of Falsified and Substandard Medicines.

"I was very surprised to hear that Mr. Thorkelson and CanadaDrugs were in any way implicated … because everything I know about CanadaDrugs and Mr. Thorkelson is that he has maintained a good company, he has provided good products into U.S. market, and he has probably saved a lot of lives of people who couldn't afford their medication," Bate said.

Thorkelson has not responded to interview requests by CBC News.

But in March, the chief business development officer of CanadaDrugs.com answered questions at the company's headquarters in a Winnipeg industrial park.

"To the best of our knowledge, the FDA is not investigating CanadaDrugs," Brock Gunter-Smith said at the time.

He acknowledged that several of CanadaDrugs.com's owners and distributors are named in the FDA investigation and the grand jury subpoena.

However, he said there is no evidence any tainted drugs have ever gone through the Winnipeg-based company.

Jorgenson said he knows Thorkelson must feel sick about any connection between his companies and counterfeit drugs.

"I went to school with this guy. I sat beside him in pharmacy school for three, four years. [We] opened our first business," he said.

I never honestly saw Kris do anything unethical. Ever."