A sign for Swiss pharmaceutical giant Novartis is seen on the roof of a building in Basel, Switzerland, on September 9, 2025.
Fabrice Coffrini | AFP | Getty Images
Novartis, One of the world’s largest pharmaceutical companies and leading biotechnology company Genentech announced the discovery of a “dangerous scheme” to import its allergy medicines from Canada into the United States in violation of U.S. Food and Drug Administration regulations.
The companies are suing SHARx (the so-called Alternative Funding Program) and Pharmacy Canada over the importation of Xolair, an injectable prescription drug for patients with severe asthma, food allergies and respiratory conditions, into a Michigan allergy and asthma center.
“Biologic medicines, such as Xolair Pharmaceuticals, require special care because of their complex composition, sensitivity to changes in storage and handling conditions, and susceptibility to contamination and deterioration that can compromise their safety and efficacy,” according to the lawsuit, filed Feb. 2 in the U.S. District Court for the District of Michigan.
The complaint alleged that the scheme circumvents FDA regulations that generally prohibit the importation of unapproved drugs from abroad. The plaintiffs are asking the court to block the import of the drug.
The lawsuit comes on the heels of a CNBC investigation that revealed a growing number of businesses called Alternative Funding Programs (AFPs) that promise to make medicines that often cost prohibitive costs more affordable to patients. AFP has access to foreign medicines at heavily discounted prices.
Federal officials told CNBC last year that importing drugs from foreign markets is illegal and can pose a risk to patients’ health.
AFP contracts with employer-sponsored health plans to provide specialty drug coverage. They often work with private employers, school districts, local governments, and labor unions.
A CNBC investigation found that in at least one case, an employer required employees to obtain expensive medications through SHARx or told them SHARx would not be covered. SHARx last year defended its business model, telling CNBC that it offers an alternative to expensive drugs in the United States.
SHARx, based in St. Louis, Missouri, did not respond to CNBC’s request for comment on the lawsuit.
According to the complaint, Xolair was shipped to the Michigan Allergy Center from Campbell Heights Pharmacy in British Columbia, Canada. The pharmacy also did not respond to requests for comment.
The complaint said SHARx “brazenly continues to deceive patients into believing they are receiving the same safe and reliable supply of medications they receive from retail pharmacies in the United States.”
The drug is subject to strict shipping and temperature controls, according to the lawsuit.
The lawsuit states that when drugs that are not approved for the U.S. market are shipped from overseas, contamination can occur and “severe patient injury and even death can occur.”
Another lawsuit was filed at the end of 2024. Gilead Sciencessimilarly alleges that other alternative funding programs illegally import medicines. The case is pending and AFP denies wrongdoing.
