Novartis and Genentech Sue Over Alleged Illegal Drug Importation

• The lawsuit targets shipments of Xolair, an injectable medication for severe asthma and allergies, from a Canadian pharmacy to a Michigan allergy center through SHARx's distribution network
• Alternative funding programs (AFPs) like SHARx contract with employer health plans to provide specialty drugs at reduced prices, but federal authorities say importing medications from foreign markets is illegal
• The suit alleges the importation circumvents FDA safety controls and could lead to contamination, 'serious patient injury and even death' due to the biological drug's sensitivity to storage conditions

Summary: Novartis and Genentech Sue Over Alleged Illegal Drug Importation

Key Development:

Novartis and Genentech filed a lawsuit on February 2 in U.S. District Court in Michigan against SHARx, an alternative funding program (AFP), and Campbell Heights Pharmacy in British Columbia, Canada, alleging illegal importation of Xolair, a prescription allergy medication.

Product and Companies Involved:

• Xolair: Injectable medication for severe asthma, food allergies, and respiratory conditions requiring strict temperature and shipping controls
• Defendants: SHARx (St. Louis-based AFP) and Canadian pharmacy supplying drug to Michigan allergy center
• Neither defendant responded to requests for comment

Legal and Safety Claims:

The pharmaceutical companies allege the defendants are circumventing FDA regulations that prohibit importation of unapproved medications from overseas. The lawsuit emphasizes that biological medicines like Xolair are sensitive to storage variations, with improper handling potentially causing contamination and degradation that could lead to "serious patient injury and even death."

Market Context:

The lawsuit follows a CNBC investigation revealing the growth of AFPs across the U.S. These businesses contract with employer-sponsored health plans to provide specialty drugs at substantially reduced prices compared to U.S. costs. In at least one case, an employer mandated staff use SHARx or lose coverage for high-cost medications.

Regulatory Stance:

Federal authorities have stated that importing medications from foreign markets is illegal and poses patient health risks, despite AFPs defending their business model as providing affordable alternatives to expensive U.S. drugs.

Industry Impact:

This case is part of a broader trend, with Bristol Myers Squibb filing a similar lawsuit in late 2024 against other AFPs for allegedly illegal importation. Those defendants have denied wrongdoing, and the case remains pending.