Federal prosecutors have charged two top executives of CANARX, the Canadian company that supplies prescription medicines to customers in the United States, with running a long-running scheme to illegally import prescription drugs into the US. John Thomas Howard, the company's treasurer and a director, was arrested on Sunday on charges of conspiracy and smuggling, according to court records filed on Tuesday, November 11.
Source: CNBC, via RocketNews
His brother Bob Howard, CANARX's president and a director, is also wanted in the federal investigation but had not been taken into custody when the records were filed, according to an affidavit by Dustin Dobbs, a special agent with the Food and Drug Administration's Office of Criminal Investigations (FDA-OCI). Besides conspiracy and smuggling, the arrest warrant says John Thomas Howard is also charged with introducing misbranded drugs into interstate commerce and with illegal drug importation. No plea has been filed in the case.
Source: Daily News (CNBC report)
What the complaint alleges
The criminal complaint covers a period of more than nine years, from February 22, 2017 through April 15, 2026. In his affidavit, Agent Dobbs wrote that the FDA's investigation found “there is probable cause to believe that (CANARX) illegally imported or caused the illegal importation of prescription drugs into the United States.” The affidavit does not specify which medicines investigators believe were imported illegally. These are allegations set out in court filings; they have not been tested at trial, and both men are presumed innocent unless prosecutors prove the charges.
Source: FDAWeb, reporting the FDA-OCI affidavit
CANARX general counsel Joseph Morris told CNBC in a statement: “The Howards deny all the charges against them, will defend vigorously, and expect to be vindicated in court.”
What CANARX is, and why US buyers use it
CANARX, founded in 2002 and based in Windsor, Ontario, just across the river from Detroit, describes itself as an international prescription provider for the US market, sourcing medicines from Canada, the United Kingdom, Australia and New Zealand. It operates as what is known as an alternative funding program, or AFP — a model in which employers and health plans steer patients to cheaper medicines sourced abroad because US drug prices are so high. CANARX was featured in a CNBC investigation last year that reported how AFPs have become more pervasive across the United States as drug costs have kept climbing.
Source: CNBC, via Traders Union summary
A long regulatory history before this arrest
This is not the first time the company has faced US regulators. The FDA issued CANARX a warning letter in 2019, alleging that the company substituted unapproved foreign drugs for FDA-approved medications prescribed by US healthcare providers, which the agency said could expose patients to safety risks. Reporting on the case also notes that the FDA seized CANARX shipments in 2023. A medicine sold legally in Canada or Britain is not automatically approved for sale in the United States: US law requires drugs distributed in the US to be FDA-approved versions, with approved labelling and supply chains, which is why importing prescription drugs outside those channels is generally illegal even when the same brand is sold abroad.
Source: FDAWeb
The criminal case is also not the only court fight the company faces. In a separate civil lawsuit that is still pending, Gilead Sciences has accused CANARX and other companies of illegally importing Biktarvy, its medicine to treat HIV. According to CNBC's reporting, CANARX had not responded to the Gilead lawsuit. That civil case is separate from the criminal charges announced this week, and its allegations are also unproven.
Source: Daily News (CNBC report)
Why this matters to readers in the US
For many families — including Punjabi diaspora families who routinely compare medicine prices between Canada and the US — cross-border drug buying looks like a simple way to save money on prescriptions that can cost several times more in the United States. This case is a reminder that the legal risk sits with the companies running those supply lines: federal prosecutors say the CANARX operation crossed from price arbitrage into smuggling and misbranding, while the company insists its executives are innocent and says it will fight the case. Patients who received medicines through employer alternative funding programs may now face questions about whether their plans will keep using such programs while the case proceeds.
What happens next
John Thomas Howard, arrested on Sunday, is expected to go through the federal court process, where a plea will be entered and prosecutors may seek an indictment from a grand jury. His brother Bob Howard remains wanted, according to the court records, and it was not clear from the filings when or where he might be taken into custody. The complaint's April 2026 end date suggests investigators believe the alleged importing continued into this year. Awaaz Punjab will report the next court developments, including any plea, indictment or response filed by CANARX in court.