Feds Arrest CANARX Treasurer, Charge Brothers in Drug Import Case

John Thomas Howard, treasurer and a director of the Canadian drug supplier CANARX, was arrested Sunday on smuggling and conspiracy charges, according to court records filed Tuesday. His brother Bob Howard, who serves as the company's president and also sits on its board, is wanted in the same federal investigation but has not been taken into custody.

The arrest warrant adds charges of introducing misbranded drugs into interstate commerce and illegal drug importation, on top of conspiracy and smuggling. No plea has been filed. An affidavit from Dustin Dobbs, a special agent with the FDA's Office of Criminal Investigations, states there is probable cause to believe CANARX illegally imported or caused the illegal importation of prescription drugs into the United States. The criminal complaint covers Feb. 22, 2017 through April 15, 2026, though it doesn't name which medications are at issue.

CANARX, founded in 2002 and based in Windsor, Ontario, has pitched itself as the first international prescription provider for the U.S. and the safest in the industry, sourcing medicines from Canada, the United Kingdom, Australia and New Zealand. The company was featured in a CNBC investigation last year into alternative funding programs, which buy high-cost specialty drugs overseas and ship them straight to patients. Federal authorities have called that practice illegal and a safety risk.

The FDA has been circling CANARX for years. In 2019 the agency sent a warning letter saying the company operated in a way that substitutes FDA-approved drugs prescribed by U.S. providers with unapproved ones. In 2023, the FDA seized medication CANARX was shipping that it described as potentially misbranded and counterfeit, according to an email to a patient obtained by CNBC.

Joseph Morris, CANARX's general counsel, told CNBC: 'The Howards deny all the charges against them, will defend vigorously, and expect to be vindicated in court.' Morris has previously argued the company operates legally and that its medicines come from highly regulated countries.

Gilead Sciences is separately suing CANARX and other companies in a pending civil case, accusing them of illegally importing Biktarvy, its HIV treatment. A Gilead spokesperson told CNBC the company 'has taken strong legal action to protect patients and the integrity of the U.S. medicines supply chain,' adding it welcomes government efforts to hold accountable those whose conduct may put patients at risk. CANARX has not responded to that lawsuit.