Federal authorities have arrested John Thomas Howard, treasurer and a director of Canadian prescription drug company CANARX, on smuggling and conspiracy charges over what they allege is a long-running scheme to illegally import prescription drugs into the U.S., according to a Nov. 11 CNBC report.
Mr. Howard was arrested Nov. 8. His brother Bob Howard, CANARX’s president and a director, is also wanted in the investigation and had not been taken into custody, according to an affidavit from an FDA Office of Criminal Investigations special agent. John Howard also faces charges of introducing misbranded drugs into interstate commerce and illegal drug importation, and no plea has been filed. The affidavit says there is probable cause to believe CANARX illegally imported or caused the illegal importation of prescription drugs, but it does not specify which medications. The criminal complaint covers Feb. 22, 2017, through April 15, 2026.
CANARX is one of a group of businesses known as alternative funding programs, which often obtain medications overseas and ship them directly to patients, sometimes through employer plans that require employees to use them. Federal authorities have said the practice is illegal and poses safety risks, according to CNBC. The central legal question is whether importing prescription drugs for personal use is permitted. The FDA allows individuals to import medications in limited cases when a drug is not available domestically, but an FDA spokesperson told CNBC last year that “in most circumstances” people cannot import drugs from other countries as substitutes for FDA-approved drugs.
The FDA seized medication being shipped by CANARX in 2023 that it said was potentially misbranded and counterfeit, and it sent the company a warning letter in 2019, according to CNBC. In a separate civil lawsuit, Gilead Sciences accuses CANARX and other companies of illegally importing its HIV medication Biktarvy.
CANARX’s general counsel said in a statement to CNBC that the Howards “deny all the charges against them, will defend vigorously, and expect to be vindicated in court.”
The case contrasts with legal state importation programs. Colorado won FDA approval in June to import lower-cost drugs from Canada, nearly two years after Florida became the first state authorized under the federal pathway.
