Court rules companies can't import Gilead medications from overseas in blow to AFP health programs

A court ruling this week in favor of Gilead Sciences could significantly impact a burgeoning class of health programs in the U.S. that federal authorities say are illegally importing medications from overseas.

Last year, a CNBC investigation found that these programs — called alternative funding programs, or AFPs — were becoming more pervasive around the country as drug costs skyrocket. Yet U.S. authorities say AFPs import the drugs from international markets in violation of Food and Drug Administration regulations.

A U.S. Court of Appeals on Thursday upheld a preliminary injunction in the case filed by Gilead against several AFPs and related businesses. Patient advocacy groups say the decision could force AFPs to shrink dramatically or even go out of business.

AFPs have defended their practices as both legal and safe and say their businesses are an antidote to high prescription drug prices.

In December 2024, Gilead sued several companies in connection with what it claimed was the illegal importation of its HIV drug Biktarvy. The suit was filed after a Maryland patient received the drug in the mail from Turkey with label instructions in Turkish.

The suit targeted an AFP called Rx Valet and several affiliated companies. Gilead also sued Meritain Health, which manages employee health plans and is part of CVS Health-owned Aetna, and Pro-Act, a pharmacy benefits manager.

"Meritain has long maintained a policy that it does not support programs for non-FDA-approved medications sourced from outside the United States and does not contract with companies to facilitate the importation of non-FDA-approved medications sourced from outside the United States," Aetna spokesperson Phil Blando said in a statement. "Despite this policy, Meritain was named as a defendant in a lawsuit filed by Gilead concerning international drug sourcing. Meritain strongly disputes the allegations and is vigorously defending itself against the complaint."

Rx Valet did not return a request for comment from CNBC.

AFPs generally maintain the medicines they import from overseas are the same as ones sold in the U.S.

The court this week disagreed, finding that the differences between Gilead's U.S. medications and the international medications imported by defendants were "material, not theoretical," and that by importing medicines through unauthorized foreign channels, the defendants bypassed Gilead's supply chain.

"What Gilead sells in Turkey and what it sells in Maryland share a chemical formula but materially differ and travel through different quality-control system," the ruling said.

In a statement, a Gilead spokesman said the ruling helps protect patients by keeping medicines that are outside FDA oversight and quality safeguards out of the U.S. supply chain.

Shabbir Imber Safdar, executive director of the Partnership for Safe Medicines , a coalition of nonprofit and pharmaceutical industry groups, said the court's decision is clear that "you cannot import untraceable medicine with foreign-language labels, hand it to American patients, and call it equivalent to an FDA-approved medicine."

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