US arrests head of Canadian CANARX on charges of illegal prescription drug importation

Federal authorities in the U.S. have charged two top executives of the Canadian pharmaceutical company CANARX with orchestrating a years-long scheme to illegally import prescription drugs into the United States. According to court documents filed on Tuesday, November 11, 2026, the company’s treasurer and director, John Thomas Howard, was arrested on Sunday on charges of smuggling and conspiracy. His brother, Bob Howard, who serves as president and director of CANARX, is also wanted as part of the federal investigation, although he had not been apprehended at the time of publication. In an indictment prepared by special agent Dustin Dobbs of the FDA's Office of Criminal Investigations, John Thomas Howard is accused, in addition to conspiracy and smuggling, of introducing misbranded drugs into interstate commerce and the illegal import of narcotics. No plea has been entered at this time.

What is CANARX and alternative funding programs

CANARX, founded in 2002 and registered in Windsor, Ontario, Canada, positioned itself on its website as the "first international prescription drug provider for the U.S." and the "safest program of its kind in the industry." The company claimed it sourced medications from Canada, the UK, Australia, and New Zealand. CANARX was a focus of a 2025 CNBC investigation that revealed how so-called alternative funding programs (AFPs) are becoming increasingly common across the U.S. amid soaring drug prices. According to the investigation, these companies have infiltrated the healthcare system by offering high-cost specialty drugs at lower prices through private and public employers. In some cases, employers mandate that employees use AFP services. Typically, AFPs obtain medications abroad and ship them directly to patients—a practice that U.S. federal authorities deem illegal and a safety risk.

FDA investigation trajectory and timeline of violations

According to the affidavit, the FDA investigation determined there is "probable cause to believe that CANARX illegally imported or caused the illegal importation of prescription drugs into the United States." The document does not specify the names of the drugs the agency believes were imported illegally. The criminal charges cover the period from February 22, 2017, to April 15, 2026. The company has been under FDA scrutiny for several years: in 2019, the agency issued a warning to CANARX, stating it was operating "in a manner whereby FDA-approved drugs prescribed by a U.S. healthcare practitioner are replaced with non-FDA-approved drugs." In response to this warning, the company's general counsel agreed to stop importing drugs requiring administration by a physician. In 2023, the FDA seized a shipment of medications handled by CANARX that the agency claimed could be misbranded or counterfeit.

Company reaction and legal defense strategy

CANARX general counsel Joseph Morris categorically denied all allegations in a statement to CNBC: "The Howards deny all charges against them, will vigorously defend themselves, and expect to be vindicated in court." In an interview given during the 2025 CNBC investigation, Morris argued that the medications sent to American patients come from countries with high regulatory standards and that CANARX operates within the law. Thus, the company's legal position is that imports are conducted from regulated jurisdictions and do not violate existing laws, whereas the FDA's position is based on the fact that, in most cases, importing prescription drugs from other countries to replace FDA-approved medications is not permitted.

Central legal issue and Gilead Sciences civil lawsuit

A key question facing all AFPs is the legality of importing prescription drugs into the U.S. for personal use. The FDA allows the import of medications for individual use in limited cases where a drug is unavailable on the domestic market. It is on this basis that AFPs built their model of direct-to-patient drug delivery. However, as an FDA representative told CNBC in 2025, "in most cases, an individual cannot import prescription drugs from other countries into the U.S... as a substitute for FDA-approved drugs." In addition to the criminal case, a civil lawsuit filed by Gilead Sciences is pending against CANARX and several other companies. The pharma company accuses CANARX of illegally importing its HIV drug, Biktarvy. In a statement to CNBC, a Gilead spokesperson noted that the company has "taken decisive legal action to protect patients and the integrity of the drug supply chain in the U.S." and welcomes the government’s efforts to hold those accountable whose actions may put patients at risk.