When a Free Trip to the Cayman Islands is an Illegal Drug Smuggling Scheme

By: Marcus J. Hopkins, Health Policy Lead Consultant, ADAP Advocacy

The Fourth Circuit Court of Appeals recently upheld a decision in Gilead Sciences, Inc. v. Meritain Health, a lawsuit in which Gilead Sciences—makers of several HIV medications, including the most commonly prescribed medication, Biktarvy—accused Meritain Health, ProAct Inc., Rx Valet, Affordable Rx Meds, and Fetih Eczanesi (a Turkish pharmacy) of illegally importing foreign versions of their brand-name drugs not approved by the U.S. Food and Drug Administration (FDA) (Lee et al., 2026).

Photo Source: U.S. Court of Appeals for the Fourth Circuit

ADAP Advocacy, which was among a group of patient advocacy organizations filing an amicus brief in support of Gilead's claim, released a press statement lauding this decision, with CEO Brandon M. Macsata stating, “Risky decisions by profit-driven alternative funding programs should never be allowed to put patients at risk by circumventing laws designed to protect our nation’s drug supply chain, all to save a buck.” 

After a Maryland patient living with HIV received a Turkish version of Biktarvy in the mail through his employer-sponsored health insurance, Gilead investigated and found that Meritain Health facilitated the illegal importation of the drug in order to save money on the purchase prices of drugs (Gilead Sciences, Inc. v. Meritain Health, Inc. et al).

While the substance of the suit lies in the illegal importation of drugs sold by Gilead Sciences in other countries—specifically Türkiye—at the heart of the issue is a more systemic problem:

Americans and American companies pay more for medications than any other country on the planet, and everyone, from patients to insurers to pharmacies, is looking for ways to get around those prices.

For patients, that looks like importing medications from other countries via sketchy websites and black-market physical sites.

For insurance companies providing employer-sponsored health insurance plans, this looks like offering “Alternative Funding Programs” (AFPs), which seek to lower costs for employer-sponsored health plans, often by illegally importing medications from overseas or sending patients on medical-tourism vacations to access cheaper medications (Zamost et al., 2025).

Photo Source: ADAP Advocacy

The former model of illegal drug importation was the case in Gilead v. Meritain et al., but the bigger issue remains:

If medication costs are too high for both patients and payors, they will absolutely ignore the warnings and do what they think they have to do.

For patients who don’t know better or think they have no other options, it’s understandable. For corporations that absolutely know the laws and are looking for ways to skirt them to decrease costs and increase profits, it’s unacceptable.

The primary issue many advocates and pharmaceutical companies have with drug importation is that the supply chain does not undergo FDA screening and verification processes to ensure medications are authentic and safe for patients. By bypassing these processes, patients open themselves to ingesting counterfeit drugs that may not contain the ingredients needed to treat their diseases or may be ingesting substances that could kill them.

When patients make these choices for themselves, especially after being informed about the risks of importation, they accept those risks. They are free to make that choice.

With AFPs, those choices are made for the patients.

In one example reported by CNBC, a patient’s employer offered him an all-expenses-paid trip to the Cayman Islands and the Bahamas to retrieve the medication he needed to treat his multiple sclerosis (MS). PriceMD, a Florida-based company, offered to send them out of the country on a vacation to get his medication, rather than pay the $2,159 per week it costs in the U.S. ($112,268/year). PriceMD found that it was significantly cheaper to send him and his wife on vacation to obtain his medications than to pay U.S. prices (Zamost et al., 2025).

PriceMD’s model is an extreme one. But the risks are very real.

Photo Source: CNBC

The Partnership for Safe Medicines (PSM), which has long warned about the dangers of drug importation and was among the first to sound the alarm over AFPs, promptly applauded the court's decision. In a statement, PSM's executive director Shabbir Imber Safdar said: "The appeals court's decision in Gilead Sciences v. Meritain Health is unambiguous: you cannot import untraceable medicine with foreign-language labels, hand it to American patients, and call it equivalent to an FDA-approved medicine. Track-and-trace is a cornerstone of why the U.S. drug supply chain is the safest in the world, and it is not optional" (PSM, 2026).

For most AFPs, the model involves illegally importing medications from foreign countries in order to avoid those costs.

There are some advocates who argue that concerns about drug importation are overblown. Gabriel Levitt, Founder of Prescription Justice, argues that opponents of drug importation “…wrongly conflate the importation of lower-cost drugs with counterfeit drugs and rogue online pharmacies and perpetuate the notion that the FDA remains the world’s regulatory “gold standard” in drug safety and that any drug without FDA approval or outside the US drug supply chain is unsafe” (Levitt, 2024).

Unfortunately, those arguments usually rely on hyperbole and "catchy" anti-big pharma messaging to side-step the genuine concerns over drug importation and the risky AFP-sponsored tactics. ADAP Advocacy agrees that the FDA is the gold standard, but it also recognizes that it could do more.

This is why better framing is needed, especially when news in the United States is filled with examples of the FDA failing to properly inspect food (Semuels, 2025), drugs (Cenziper & Rose, 2025), and baby formula (Fletcher et al., 2026).

If we argue that the FDA is the “gold standard,” it would help if the FDA were actually doing its job. Its failure undermines the very basis of the consumer safety argument.

In the meantime, we’re counting Gilead’s victory in this case as a win for patient safety! 

Disclaimer: All funders of the ADAP Advocacy Association are publicly listed on our website. 

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association; rather, they provide a neutral platform for the author to promote open, honest discussion of public health-related issues and updates.

References:

[1] Cenziper, D. & Rose, M. (2025, December 22). The FDA Often Doesn’t Test Generic Drugs for Quality Concerns, So ProPublica Did. New York, NY: ProPublica: RxRoulette. https://www.propublica.org/article/fda-generic-drug-testing

[2] Fletcher, L., Nejman, A., & Aaron, N. (2026, August 21). After 2 infant formula botulism outbreaks, families ask if warning signs were missed. Los Angeles, CA: ABC 7 News. https://wjla.com/features/i-team/two-infant-formula-botulism-outbreaks-warning-signs-foodborne-illness-fda-cdc-byheart-whole-nutrition

[3] Gilead Sciences, Inc. v. Meritain Health, Inc. et al. (4th Cir. 2026). https://www.safemedicines.org/wp-content/uploads/2026/08/Gilead-v.-Meritain-appeals-court-decision.pdf

[4] Lee, M., Tortorelli, P., & Zamost, S. (2026, August 14). Court rules companies can’t import Gilead medications from overseas in blow to AFP health programs. Englewood Cliffs, NJ: CNBC: Health and Science. https://www.cnbc.com/2026/08/14/court-ruling-gilead-medications-overseas-afps.html

[5] Levitt, G. (2024). Enough Excuses on Drug Importation: A New Transnational Paradigm for FDA Regulation and Lower US Drug Prices. Brooklyn Journal of International Law, 49(1), 286-329. https://brooklynworks.brooklaw.edu/bjil/vol49/iss1/8

[6] Semuels, A. (2025, April 08). Food Safety Was Slipping in the U.S. Then Came Mass Layoffs. New York, NY: Time Magazine: https://time.com/7275746/food-safety-fda-layoffs/

[7] Zamost, S., Tortorelli, P., & Lee, M. (2025, November 13). Cheaper medicines, free beach trips: U.S. health plans tap prescriptions that feds say are illegal. Englewood Cliffs, NJ: CNBC: Health and Science. https://www.cnbc.com/2025/11/13/employer-health-plans-afp-prescriptions-feds-illegal.html

Alternative Funding Programs for Prescription Drugs Are Putting Patient Lives at Risk

By: Ranier Simons, ADAP Blog Guest Contributor

As part of ADAP Advocacy’s continued spotlight on the dangers of counterfeit prescription drugs, it is worthwhile to elevate a recent expose aired by CBNC. Two weeks ago, CBNC aired an investigative deep dive into the predatory practices of some alternative funding programs (AFPs) that illegally import medications to sell to insurance plans and patients. The expose was entitled, "How Soaring U.S. Drug Prices Fueled What Feds Call An Illegal Import Of Medications." The 30-minute documentary effectively presents how patients are pawns sandwiched between the law and entities that knowingly break it for profit. AFPs are putting patient lives in danger.

Photo Source: Alliance for Patient Access

It is worth noting that U.S. drug prices are not soaring, despite the claim in the documentary's title. According to the Drug Channels Institute, inflation-adjusted U.S. brand-name drug prices fell for the seventh consecutive year. In its annual examination of drug prices and trends, Drug Channels Institute’s President, Dr. Adam Fein, summarized, “For 2024, average brand-name drugs’ list prices grew by only 2.3%. What’s more, after adjusting for overall inflation, brand-name drug net prices dropped for an unprecedented seventh consecutive year.” The real issue is the overall unaffordability of healthcare services and the push to control costs.

Alternative funding programs are companies that promise employers and patients access to prescription medications at a low cost. Typically, AFPs operate by exploiting patients to utilize manufacturer drug assistance programs to obtain medications (NASTAD, n.d.). In the case of the CBNC expose, the AFPs subject to investigation are providing prescription drugs through illegal importation. In the documentary, Lori Mayall, who oversees anti-counterfeiting and product security at Gilead Sciences, states, “Every time you are taking a foreign medicine that has been delivered from overseas, you’re playing a game of Russian roulette.”

AFPs target vulnerable populations. The typical client of AFPs is small private employers, city and county governments, school districts, and unions. These entities have limited budgets and are thus desperate to find ways to save money. The documentary highlighted that the AFPs who promise the most outrageous bargains on prescription drugs are the ones who illegally import. Employers carve out coverage for high-cost prescription drugs and require patients they cover to use AFPs to obtain the medications. While some patients are aware that the medications they are receiving are sourced outside the United States, many are not. In most cases, the employers are aware, but they are not educated on the real dangers of importing the medications in terms of drug safety. Moreover, they are not educated about the illegality of importation.

CNBC's Melissa Lee candidly interviewed representatives from several AFPs. Overall, they all painted themselves as being altruistic by providing a public service to people. They described their actions as saving employers money while giving patients access to expensive medications they would otherwise not be able to obtain. The representatives complained that prescription drugs are much cheaper overseas, thus Americans should have access to those lower prices. They feel they are enabling Americans to exercise their rights.

AFPs incorrectly argue that their importation activities are legal under FDA guidelines. However, Leigh Verbois, the former director of the Office of Drug Security Integrity and Response at the FDA, stated on camera, “What AFPs are doing is importing misbranded and unapproved foreign drugs, which is illegal.” AFPs claim they are legal and operate under the FDA’s personal importation policy. Verbois noted this is incorrect. She explains that the importation policy is particular and limited: “If a drug is not approved or available clinically in the United States, an individual can obtain a product from a foreign source, assert they are importing that product for themselves, and then bring that product under a limited supply of 90 days into the United States.”

Photo Source: KFF News

This is not how AFPs operate. AFPs buy drugs that are approved and commercially available in the United States from foreign entities at lower prices, then distribute them to U.S. patients. Notwithstanding the illegality of the operation, AFPs are not honest in their sourcing. They claim to source only medications from reputable tier-one sources such as the United Kingdom, Canada, and Australia. However, the investigation revealed that drugs are actually also coming from places such as India, Turkey, Germany, and New Zealand. 

The foreign entities distributing these medications are not licensed to practice pharmacy anywhere in the U.S., and almost all have no assets or staff here. Should they make a mistake and harm a patient, there is no way to hold them responsible. Should they decide to cut corners and dispense subtherapeutic or counterfeit medication, they cannot have their license suspended, be brought into court in the U.S., or be forced to compensate the patients they harmed.  The medicines they dispense are not part of the U.S. track-and-trace system, so there isn’t even a way to authenticate them. Sometimes, they also break the law in their own country by exporting critical medicines meant for domestic patients.  These are not legitimate healthcare providers that patients should depend on for their lives.

Most importantly, many AFPs do not purchase foreign medications and instead distribute them to patients. In some cases, foreign suppliers and pharmacies ship medications directly to patients. This enables the drug shipments to avoid law enforcement and customs and enter the country under the radar. Thus, it makes it almost impossible to tell how many drugs are entering the country illegally.

This was part of the way Gilead Sciences was alerted, and it subsequently filed a lawsuit to prohibit the importation of foreign versions of its medications sold in the United States. A patient whose prescription drug plan was serviced by an AFP was sent a bottle of the HIV antiviral Biktarvy from Turkey, complete with labelling written in Turkish. The investigation found that, according to the Office of the U.S. Trade Representative, Turkey is one of the world’s largest suppliers of counterfeit medications. The operators of AFPs not only fail to effectively screen their sourcing but also lack the means to do so. Mayall also stated, “You don’t know how that product was stored, handled, or distributed.” She added, "and it travels through an illegal supply chain that’s easily infiltrated with counterfeits.”

Unfortunately, patients subject to utilizing AFPs who engage in foreign importation have no choice. Their employers tell them that if they do not use the AFP, they will have to pay the list price out of pocket for the medications they need. The patients who are uncomfortable with and aware of the foreign sourcing of their medications must risk their lives just to obtain their medications.

Photo Source: Partnership for Safe Medicines

Unfortunately, bad actors continue to flourish. Shabbir Safdar, Executive Director of The Partnership for Safe Medicines, revealed in the documentary that his organization discovered over $5 million in illegally imported medicines over a two-year period. CNBC’s Lee even explained that the U.S. House Appropriations Committee is so concerned about illegal drug importation that it asked the FDA to produce a comprehensive report on how to strengthen oversight. No matter how inexpensive, any drug is expensive when the price of taking it is the risk to one’s health. Continuing to raise awareness of the pervasiveness of AFPs, educating patients and employers about the dangers of obtaining foreign medications, and encouraging policy oversight are among the most effective ways to protect patients' well-being so they are not treated as pawns for profit.

[1] Fein, Ph.D, Adam. (2025, January 7). Inflation-Adjusted U.S. Brand-Name Drug Prices Fell for the Seventh Consecutive Year as a New Era of Drug Pricing Dawns. Drug Channels Institute. https://www.drugchannels.net/2025/01/inflation-adjusted-us-brand-name-drug.html

[2] NASTAD. (n.d.). Alternative Funding Programs. Retrieved from https://nastad.org/sites/default/files/2025-07/resource-afp-issue-brief-2025.pdf

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.    

Alternative Funding Programs are Simply the Rich Robbing the Poor

By: Ranier Simons, ADAP Blog Guest Contributor

Patients who utilize specialty medications are living with serious and often chronic health conditions, such as cancer, cystic fibrosis, diabetes, or HIV. Barriers to obtaining those medications can literally be a matter of life and death. Many people obtain their specialty drugs via their private health insurance, often employer-sponsored plan. Unfortunately, some insurance plans engage in very anti-patient policies, such as copay accumulators and copay maximizers, placing profit above the patient’s well-being. The most recent anti-patient cost-shifting scheme is the alternative funding program (AFP). AFPs are characterized as “sinister” by some patient advocates because they force patients with private insurance to utilize public safety net programs taxing already limited resources earmarked for those who are truly in need. Additionally, AFPs create barriers to access and adversely affect healthcare outcomes.[1]

Photo Source: Health Policy Today

Alternative funding programs' primary mode of operation is to convince self-insured health plans to exclude most if not all, specialty prescription drugs from coverage in their formulary.[2] In 2020, the average cost of a specialty drug for a chronic health condition was $84,442.[1] Specialty prescriptions cost about ten times more than regular medications. Their exclusion from a plan’s drug formulary essentially renders beneficiaries ‘uninsured’ regarding their medication. When patients are prescribed a non-covered specialty medication, their plan denies the claim, and the AFP then seeks to enroll the patients in patient assistance programs.[2] If the patient qualifies for a patient assistance program from a manufacturer or charity, they receive the medication for free or at a significantly reduced cost. If they do not qualify for any programs, the claim returns to the plan and is covered under the standard pharmacy benefit with cost-sharing.

This cost-cutting scheme is multidimensionally problematic. It is dangerous regarding the continuity of patient care. Applying for these programs takes time. These third-party AFPs must gather financial and demographic information for the process, and approval could take two to four weeks or sometimes months.[2,3] Being without prescriptions for that long can cause serious medical problems and create or exacerbate symptoms. It is possible that resulting adverse outcomes could even be irrevocable. 

This is especially dire for those taking HIV antiretroviral medication, where adherence is vital in maintaining viral suppression. Tim Horn, Director of Medication Access at NASTAD, reports, “What we're seeing in a number of states are AFP administrators referring people requiring antiretrovirals or other high-cost drugs to manufacturer patient assistance programs, which may in turn end up recommending enrollment in the state AIDS Drug Assistance Program.” He adds, “the denial of the original pharmacy claim by the employer's plan, the capacity it takes to apply for and be turned down by a manufacturer PAP, followed by the time and energy it takes to apply and be confirmed eligible for ADAP support effectively means someone can go for weeks without being able to access essential medicines – and that's if they haven't given up on the whole process entirely.”

Photo Source: ONS Voices

Critics argue that AFPs are unethical and fiscally damaging. As Adam J. Fein, Ph.D., CEO of Drug Channels Institute, points out, “You’re basically trying to access money that is explicitly intended for needy, uninsured, financially strapped patients. This is not copay support for commercial benefits, where the benefit kind of stinks or they over-cost-shifted.”[4] Manufacturer and charity patient assistance programs have limited funds. AFPs’ abuse of the system could eventually drain programs to the point of causing programs to close entirely or at least drastically reduce the ability to extend help to the genuinely uninsured and indigent. It is unjust and inequitable for AFPs to use patient assistance funds to subsidize health insurance plans for profit.

Some AFPs utilize a practice that directly endangers the lives of plan members. If a beneficiary does not qualify for the patient assistance programs, AFPs may attempt to source a needed medication through international mail order. This exposes patients to unregulated medicines that could be counterfeit, impure, expired, and otherwise dangerous to their health. Additionally, guidance from the U.S. Food & Drug Administration (FDA) indicates that it is illegal for individuals to import drugs or devices into the United States for personal use under most circumstances.[5]A couple of extremely narrowly defined exceptions exist: the Personal Importation Policy and the Importation of Drugs Originally Intended for Foreign Markets Policy. However, utilizing international mail order for the members of an entire health plan does not fall under either of those exceptions.

In an effort to push back against AFPs, advocacy groups have been flagging AFPs as violations of various regulations under the Employee Retirement Income Security Act of 1974 (ERISA). (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to protect individuals in these plans.[6] This includes employer self-insured plans. ERISA exists to ensure that health plans operate in the best interests of the beneficiaries. ERISA is comprised of many rules. Developing inquiry efforts include exploring how AFPs could be causing health plans to improperly exercise their fiduciary duties and how they may create discriminatory plan design.[7]

According to Carl Schmid, Executive Director of the HIV+Hepatitis Policy Institute, “Most AFPs are taking advantage of a loophole in the ACA that allows employer plans to designate certain drugs as “non-essential health benefit”.  The federal government through regulation seems to be starting to close that loophole for marketplace and small group plans, but for the larger employer plans, that really are the guilty parties, we need to continue to push the administration to act.  Bills are also pending in several states and in the Congress. This is just a start, but to end AFPs, the government must step in stop these nefarious schemes.”

Photo Source: iStock

Alternative funding programs amount to simply the rich robbing the poor, but they are growing in number. Currently, there are over twenty AFP vendors. They are not in the best interests of employers because the cost savings are deceptive. While plan sponsors may celebrate the relief of not paying for expensive specialty medication, they incur high costs from the AFP plan administrators. AFPs charge payers’ large percentages of the savings they achieve, sometimes as high as 25% of a drug’s list price.[8] Plan beneficiaries are harmed by delays in care, the stress of administrative red tape, and increased cost burdens when eligibility for AFP funding mechanisms goes awry. The public is harmed because AFPs divert funds from those who truly are in need. Ongoing developments indicate that it will be crucial for advocacy groups and the government to be vigilant in preventing the proliferation of AFPs and the damage they cause.

[1] Alliance for Patient Access. (2023, June). The high costs of alternative funding programs. Retrieved from https://allianceforpatientaccess.org/wp-content/uploads/2023/06/AfPA_High-Costs-of-Alternative-Funding-Programs_June-2023.pdf

[2] Blum, K. (2023, November 20). ‘Alternative’ model for patient assistance draws stakeholder ire. Retrieved from https://www.specialtypharmacycontinuum.com/Policy/Article/12-23/Alternative-Model-For-Patient-Assistance-Draws-Stakeholder-Ire/72048

[3] Schroeder, D. (2022, November 22). The looming threat of alternative funding models. Retrieved from https://ipghealth.com/news/the-looming-threat-of-alternative-funding-models

[4] AIS Health. (2022, September 1). Industry experts question alternative funding companies that carve out some specialty drugs, ‘abuse’ charities. Retrieved from https://www.mmitnetwork.com/aishealth/spotlight-on-market-access/industry-experts-question-alternative-funding-companies-that-carve-out-some-specialty-drugs-abuse-charities/

[5]  FDA. (2023, December 7). Personal Importation. Retrieved from https://www.fda.gov/industry/import-basics/personal-importation#:~:text=In%20most%20circumstances%2C%20it%20is,unapproved%20new%20drug%20in%20the

[6] U.S. Department of Labor. (2024). ERISA. Retrieved from https://www.dol.gov/general/topic/health-plans/erisa#:~:text=The%20Employee%20Retirement%20Income%20Security,for%20individuals%20in%20these%20plans.

[7] Aimed Alliance. (2022, December 14). Essential health benefits, importation, and more – Do you know the risks?[Video]. YouTube. https://www.youtube.com/watch?v=U9-rJZ9YjLU&t=723s

[8] Fein, A. (2022, August 2). The shady business of specialty carve-outs, a.k.a., Alternative Funding Programs. Retrieved from https://www.drugchannels.net/2022/08/the-shady-business-of-specialty-carve.html

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.