Canadian Healthcare Firm Executives Face U.S. Charges Over Drug Imports

U.S. authorities have arrested a top official of a Canadian healthcare company and are searching for another over a scheme to illegally bring prescription drugs into the United States. John Thomas Howard, who serves as treasurer and director of CANARX, was arrested on Sunday. He faces charges of smuggling, conspiracy, illegal drug importation, and introducing misbranded drugs into interstate commerce. Court records show no plea has been entered yet. His brother, Bob Howard, who is the president and a director of the company, is also wanted in the federal investigation but has not yet been taken into custody. The charges against the executives stem from an affidavit filed by Dustin Dobbs, a special agent with the Food and Drug Administration's Office of Criminal Investigations. The criminal complaint covers actions from Feb. 22, 2017, through April 15, 2026. CANARX is based in Windsor, Ontario, and was founded in 2002. It operates as an alternative funding program, or AFP, supplying high-cost specialty drugs at lower prices to public and private employers in the U.S. These companies often source medications from overseas, including the United Kingdom, Australia, and New Zealand, and ship them directly to patients. Federal authorities state that this direct importation practice is illegal and creates safety risks through unauthorized supply chains. The company has faced scrutiny from the FDA for several years. In 2019, the agency issued a warning letter stating CANARX was substituting FDA-approved drugs with unapproved alternatives. General counsel Joseph Morris responded at the time by agreeing to stop importing drugs that need a doctor's administration, while maintaining the company was not misleading patients. In 2023, the FDA seized medication shipments from CANARX that it flagged as potentially misbranded and counterfeit. Legal challenges extend beyond federal criminal charges. Drugmaker Gilead Sciences filed a pending civil lawsuit accusing CANARX and other companies of illegally importing Biktarvy, an HIV treatment medication. Gilead issued a statement welcoming government efforts to protect the U.S. medicine supply chain.

Context

Alternative funding programs have grown more common in the United States as patients and employers struggle with rising prescription drug costs. Federal regulators generally prohibit individuals and companies from importing foreign prescription drugs as substitutes for FDA-approved medications, raising ongoing legal questions about how these alternative suppliers operate.