U.S. charges CANARX treasurer; company president sought in drug-import case

What prosecutors allege

Court filings say CANARX's leadership ran a multiyear effort to move prescription drugs into the U.S. outside the law, with the criminal complaint covering activity from Feb. 22, 2017 to April 15, 2026. The records name John Thomas Howard as a defendant and identify him as CANARX's treasurer and a director. He was taken into custody Sunday on smuggling and conspiracy counts, and the warrant also lists offenses for introducing drugs that were misbranded into interstate commerce and for illegal importation of drugs. No plea has been entered.

Bob Howard, CANARX's president and also a director, is John's brother. An affidavit by FDA Office of Criminal Investigations special agent Dustin Dobbs says Bob Howard is wanted in the federal investigation, and he has not been arrested.

Investigators wrote that they had "probable cause to believe that (CANARX) illegally imported or caused the illegal importation of prescription drugs into the United States …." The filing does not name specific medicines.

How CANARX and AFPs fit into the picture

CANARX says it began in 2002 and is headquartered in Windsor, Ontario. On its website, the company describes itself as the pioneering international prescription supplier serving the U.S., and claims to be the safest program of its kind, sourcing drugs from Canada, the United Kingdom, Australia and New Zealand.

CNBC's reporting last year spotlighted CANARX and the wider category often referred to as alternative funding programs, or AFPs, which have spread as drug costs surge. The investigation found these businesses have moved into the U.S. health system by offering costly specialty drugs at lower prices through private and public employers, with some employers requiring workers to use an AFP. The reporting traced shipments from overseas into the U.S. through supply channels not authorized by the drugmakers, and noted federal authorities have said buying medicines abroad and shipping them straight to patients is illegal and raises safety concerns.

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Regulatory history and related legal actions

The FDA has scrutinized CANARX for years. In 2019, the agency warned the company that it was operating "in a manner that substitutes the FDA-approved drugs prescribed by the U.S. healthcare provider with unapproved drugs." In response, CANARX's general counsel, Joseph Morris, argued the company was not misleading patients and agreed to stop importing medicines that must be administered by a doctor.

In 2023, the FDA seized medicine being shipped by CANARX that the agency described in a patient email obtained by CNBC as potentially misbranded and counterfeit. In an interview for CNBC's investigation last year, Morris said the drugs shipped to U.S. customers come from highly regulated countries and that CANARX was acting within the law.

The legal debate around AFPs centers on whether people may import prescription drugs into the U.S. for their own use. The FDA allows limited personal importation when a medicine is not available domestically, and AFPs have built their model around shipping directly to patients. Still, the FDA said to CNBC last year, via a spokesperson, that "in most circumstances, a person cannot import prescription drugs from other countries into the U.S. ... as substitutes for FDA-approved drugs."

Separately, Gilead Sciences has a pending civil suit accusing CANARX and others of unlawfully importing Biktarvy, its HIV treatment. A Gilead spokesperson said the company "has taken strong legal action to protect patients and the integrity of the U.S. medicines supply chain. We welcome the government's efforts to hold accountable those whose conduct may put patients at risk."

What this means for your portfolio

The case layers potential criminal exposure onto a business model already facing FDA warnings and private litigation. CANARX's counsel says the Howards dispute the allegations and plan to fight them, while the timeline in the complaint and the FDA's past actions give investors a roadmap of regulatory risk to monitor. If you own drugmakers exposed to specialty therapies, benefits administrators experimenting with AFPs, or logistics firms tied to parallel import flows, expect headlines around enforcement, reimbursement practices, and supply chain integrity to be key catalysts.

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