Novartis, Genentech file suit alleging illegal importation of prescription drug

Novartis, one of the world’s largest pharmaceutical companies, and Genentech, a major biotech firm, say they’ve uncovered a “dangerous scheme” to import their allergy medication from Canada into the U.S. in violation of U.S. Food and Drug Administration regulations.

Both are suing SHARx — a so-called alternative funding program — and a Canadian pharmacy over the importation of Xolair, an injectable prescription medication for patients with severe asthma, food allergies and respiratory conditions, to an allergy and asthma center in Michigan.

“Biological medicines, like the U.S. Xolair medicine, require particular care because their complex composition and sensitivity to variation in storage and handling conditions are susceptible to contamination and degradation that could undermine their safety and efficacy,” according to the lawsuit, filed on Feb. 2 in U.S. District Court in Michigan.

The suit said the scheme circumvents FDA regulations that generally prohibit importation of unapproved medications from overseas. The plaintiffs are asking the court to stop the importation of the drug.

The lawsuit comes on the heels of a CNBC investigation that revealed a growing class of businesses called alternative funding programs, or AFPs, which promise to connect patients with more affordable options for accessing medications that often come at very high costs. The AFPs are able to obtain the overseas drugs at a substantially reduced price.

Federal authorities told CNBC last year that importing medications from foreign markets is illegal and could pose risks to patients’ health.

AFPs contract with employer-sponsored health plans to offer coverage on specialty drugs. They often work with private employers, school districts, local governments and unions.

CNBC’s investigation revealed that in at least one case, an employer required its staff to obtain their high-cost medication through SHARx or said it wouldn’t be covered. SHARx last year defended its business model, telling CNBC it provides an alternative to expensive drugs in the U.S.

SHARx, which is based in St. Louis, Missouri, did not respond to CNBC’s request for comment about the lawsuit.

According to the complaint, the shipment of Xolair to the Michigan allergy center came from Campbell Heights Pharmacy in British Columbia, Canada. The pharmacy also did not respond to a request for comment.

The suit said SHARx “continues to brazenly deceive patients into believing they are receiving the same safe, securely supplied medicines that they would receive from a U.S. retail pharmacy.”

The drug has strict shipping and temperature controls, the suit said.

Drugs not approved for the U.S. market that are shipped from overseas can result in contamination, potentially leading to “serious patient injury and even death,” the suit said.

A separate lawsuit, filed in late 2024 by Gilead Sciences, similarly alleges that other alternative funding programs illegally import medications. The AFPs in the case, which is pending, have denied any wrongdoing.