U.S. authorities arrested John Thomas Howard on Sunday on smuggling and conspiracy charges connected to a prescription drug importation scheme.
Court records filed Tuesday state that Howard faces charges including introducing misbranded drugs into interstate commerce and illegal drug importation. Bob Howard, his brother and the president and director of CANARX, is also wanted in the federal investigation led by the Food and Drug Administration’s Office of Criminal Investigations, according to an affidavit from special agent Dustin Dobbs.
The criminal complaint covers a period from Feb. 22, 2017, through April 15, 2026. CANARX, founded in 2002 and based in Windsor, Ontario, Canada, describes itself on its website as an international prescription provider for the U.S., sourcing medications from Canada, the United Kingdom, Australia, and New Zealand.
CANARX Sources High-Cost Specialty Drugs from Overseas
CANARX operates as an alternative funding program, or AFP, offering high-cost specialty drugs through private and public employers. These programs often source medications overseas and ship them directly to patients, bypassing supply chains that the pharmaceutical companies producing the medications have not authorized.
Federal authorities said that importing prescription drugs in this manner is illegal and poses safety risks. A representative for the FDA said that people generally cannot bring foreign prescription drugs into the United States to replace medications approved by the agency.
FDA Scrutiny Targets CANARX Drug Substitution Practices
The company has been under FDA scrutiny for several years. In 2019, the agency sent a warning letter to the company, saying it was operating in a manner that substitutes FDA-approved drugs prescribed by the U.S. healthcare provider with unapproved drugs.
Joseph Morris is the company’s general counsel. Morris responded at the time by agreeing for the company to stop importing drugs that need to be administered by a doctor.
In 2023, the FDA seized medication being shipped by CANARX that it says was potentially misbranded and counterfeit. Gilead Sciences filed a separate civil lawsuit accusing CANARX and other companies of illegally importing Biktarvy, its medication to treat HIV.
“The Howards deny all the charges against them, will defend vigorously, and expect to be vindicated in court,” corporate general counsel Joseph Morris told CNBC.
Morris said during a previous CNBC investigation that the medicines shipped to U.S. patients come from highly regulated countries and that CANARX was operating legally. Bob Howard has not yet been taken into custody, and no plea has been filed in the current criminal case against John Thomas Howard.
