Canadian healthcare firm executives face US charges over drug imports

Court records filed Tuesday show U.S. authorities accuse two top officials of a Canadian company of running a long-running scheme to illegally import prescription drugs into the United States. John Thomas Howard, who serves as treasurer and director of CANARX, was arrested Sunday on smuggling and conspiracy charges. The arrest warrant also states he faces charges for introducing misbranded drugs into interstate commerce and illegal drug importation, and no plea has been filed. His brother Bob Howard, who is president and a director of the company, is wanted in the federal investigation but has not yet been taken into custody, according to an affidavit from Food and Drug Administration special agent Dustin Dobbs. The criminal complaint covers the period from Feb. 22, 2017, through April 15, 2026. CANARX was featured in a media investigation last year revealing how alternative funding programs, or AFPs, are growing across the U.S. amid high drug costs by offering costly specialty drugs at lower prices through employers. AFPs often obtain medicines overseas and ship them directly to patients, which federal authorities state is illegal and poses safety risks through unauthorized supply chains. Founded in 2002 and based in Windsor, Ontario, CANARX states on its website that it sources medications from Canada, the United Kingdom, Australia and New Zealand. However, the FDA affidavit states there is probable cause that the company illegally imported prescription drugs, though it does not specify which medications were involved. Company general counsel Joseph Morris said in a statement that the Howards deny all charges, will defend vigorously, and expect to be vindicated in court. The firm has faced prior FDA scrutiny, including a 2019 warning letter and a 2023 seizure of medications the agency said were potentially misbranded and counterfeit, though Morris previously argued the company operated legally using medications from highly regulated countries.

Context

Alternative funding programs operate in a legal gray area regarding personal drug importation rules, which generally restrict bringing foreign medications into the U.S. as substitutes for FDA-approved drugs. Gilead Sciences has also filed a pending civil lawsuit accusing CANARX and other firms of illegally importing its HIV medication Biktarvy. A Gilead spokesperson welcomed government efforts to protect the U.S. medicine supply chain, while CANARX has not responded to that civil lawsuit.