Vipers of another variety

  • by: |
  • 01/02/2007
In the heydays of “drugs from Canada,” there were news stories aplenty about the “Winnipeg Wunderkids,” the young pharmacists who were selling drugs to Americans and driving around in Dodge Viper sportscars. These reports rarely mentioned that they were trafficking in illegal merchandise. And there was a lot of talk of “it’s not about the money, it’s about helping people.”

That, as it turned out, was soooo 2004. Today they going out of business and, well, it’s all about the money. People are losing their jobs – but it doesn’t seem that those who got rich quick are doing anything to help those they led down the primrose path of ill-gotten gains – except maybe letting their former employees wash their fancy cars.

Here’s the story as reported in the Winnipeg Free Press.

MINNEDOSA -- The Internet pharmacy pioneers who gave birth to a half-billion-dollar industry in Canada, most of it in Manitoba, are exiting the industry. MediPlan, founded almost six years ago by four Winnipeg wunderkids ages 21 to 26, will close its doors at the end of this month here, 200 kilometres northwest of Winnipeg. About 75 people are being thrown out of work.

At its peak, MediPlan employed 170 people in Minnedosa. "There's nobody here... We're just winding down," said a woman in the human resources department on the MediPlan's second floor last week. in Winnipeg has purchased MediPlan and the jobs will move to the capital city. At least 30 new employees will be needed at CanadaDrugs, a spokesman said. As the industry leader for much of its run, MediPlan, which also goes by RxNorth, had been the prime target for opponents like non-Internet pharmacies, the drug giants, and Canadian and American governments.

A person who knows MediPlan president Andrew Strempler said Strempler simply got worn down from fighting. "It was just time to get out to capture as much value as possible," the person said.

The final salvo came this summer when the United States Food and Drug Administration alleged MediPlan and another Internet pharmacy had sold counterfeit drugs into the U.S. Strempler and the Internet pharmacies association vehemently denied the claims. However, MediPlan drug shipments began being seized at the U.S. border.

"The reality is that Andrew Strempler is a man of integrity, and is committed to patient safety and patient care, and the truth of the matter is if a patient can't receive safe and affordable medication on time, then they are at risk," said CanadaDrugs spokesman Troy Harwood-Jones.

So, Strempler phoned friend Kris Thorkelson, CanadaDrugs owner. Although competitors, Strempler and Thorkelson have always maintained a friendship and mutual respect. Initially, Thorkelson agreed to take over just MediPlan's distribution practices so MediPlan drugs could reach patients. That caused the layoff of 15 people in Minnedosa in September. "As things went along, it became obvious it was a great business opportunity" for Thorkelson to purchase all of MediPlan, said Harwood-Jones.

CanadaDrugs is the largest Internet pharmacy in Canada with about 250 employees, and was 50 per cent larger than MediPlan at the time. Jobs have been offered to MediPlan employees, but Harwood-Jones didn't know if anyone had accepted. As for Strempler, he's out of the business he founded. "He's a young guy (about 32) and he's been very successful and I'm very confident he will be very successful again," Harwood-Jones said.

Strempler bought out partners Mark and Chantelle Rzepka in an amicable settlement last year. Phone messages left with Strempler's lawyer requesting an interview with Strempler weren't answered.

MediPlan was highly aggressive from start, taking out pricey full-page ads in major American dailies like the New York Times and publishing complete lists of their cheaper drugs. They also charmed many people along the way. MediPlan customers, mostly American senior citizens with chronic ailments, received their medicines in flowery pastel wrapping, with little handwritten thank-you notes attached -- more like presents at a baby shower. It was the idea of "the girls," Catherine Strempler and Chantelle Rzepka, the wives of the two pharmaceutical degree graduates.

It said much about the foursome: young, naive, energetic, idealistic, respectful, smart. Their employees were nearly all older than they were and the fresh-faced bosses were more apt to treat them like aunts and uncles.

No question, the four original partners in MediPlan walked away multimillionaires. Projections from someone inside the industry suggest MediPlan owners may have made anywhere from $10 million to $30 million. "Anyone worth their salt was making millions of dollars," during the past five years, said the Internet pharmacist, who did not wish to be named.

Mark and Chantelle Rzepka, before their marriage dissolved last year, purchased a new $2-million, 6,800-square-foot home in East St. Paul. Andrew and Catherine Strempler recently purchased Leonard Asper's $2-million, 6,500-square-foot home on Wellington Crescent. But that kind of money also presented life-in-the-fast-lane temptation. Strempler nearly killed himself when he ran his Dodge Viper sports car into a tree on the Yellowhead Highway within Neepawa town limits.

For Minnedosa and the surrounding area, MediPlan's demise is a bit like Dorothy and Toto waking up back in bed in Kansas. Six years ago, MediPlan fell into Minnedosa's lap. No one knew what it was. Almost overnight, it became the area's biggest employer and payroll. Not only were many of the jobs well-paying, but they were "clean jobs," as one person put it, meaning you didn't have dirt under your fingernails at the end of the day.

Minnedosa businesses are bracing for the fallout. Second Century Furniture and Appliance just closed its doors, but it isn't known if MediPlan is a factor. Minnedosa businesses face stiff competition from new big box stores in Brandon.

"It's almost like a gold mine strike," said Minnedosa chief administrator Ken Jenkins. "It's here, and then one day it's gone. But while it was here, it sure was nice."

MediPlan's local philanthropy will also be missed. Robert Dunston, mayor of the town of Neepawa, where the Stremplers still own a house, recalls one time when Andrew Strempler showed up unexpectedly at an annual banquet of the Neepawa Natives of the Manitoba Junior Hockey League.

The banquet always includes a fundraiser where players' sweaters are auctioned off. The auctioneer started off by asking who wanted to give him $1,000 for the first sweater. It was a joke. Sweaters might go for $300 tops.

"I do," Strempler piped up. The room went completely silent. Dunston said it was the first time he'd seen an auctioneer speechless.

However, there is some anger in Minnedosa at the federal government for not doing more to protect their biggest employer.

"The disappointment is it wasn't a business demise. It was political. For Minnedosa, that was the biggest disappointment," said John Mendrikis, who runs John's Tax Service and Accounting in Minnedosa.

Mendrikis added: "The perception out there is that large companies influence policy, and this plays into that."

No, not political. Financial. They took the money and ran.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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