Gilead overseas drug import ruling upholds limits on named health-plan vendors

The Gilead overseas drug import ruling keeps a preliminary injunction in place against several companies accused of bringing foreign-market Gilead medicines into the U.S. for employer health plans. For investors following Gilead, the decision is a court win tied to its trademark claims, but it does not end the underlying case or create a blanket rule for every alternative funding program.

The U.S. Court of Appeals for the Fourth Circuit affirmed the Maryland federal court’s injunction against Meritain Health, ProAct, Rx Valet, Advanced Pharmacy, Affordable Rx Meds, also known as Aqua Enterprise, and Gregory Santulli. According to the court’s published opinion, the order bars the appellants from advertising, selling or facilitating sales of imported Gilead-branded medications in the United States while the litigation continues.

The dispute began after a Maryland patient received a Turkish version of Gilead’s HIV drug Biktarvy by mail, according to the Fourth Circuit opinion. Gilead sued in December 2024, alleging that Rx Valet, Advanced Pharmacy, Affordable Rx Meds and Santulli directly infringed its trademarks by importing and distributing foreign-market drugs, and that Meritain and ProAct helped facilitate the arrangement.

Meritain is part of CVS Health-owned Aetna, CNBC reported. ProAct was the pharmacy benefit manager for the Maryland patient’s employer health plan, according to the appellate opinion.

What did the Gilead overseas drug import ruling decide?

The Fourth Circuit decided that Gilead was likely to prevail on its trademark claims enough to justify keeping the preliminary injunction in effect. A preliminary injunction is a temporary court order intended to preserve the situation during a lawsuit; it is not a final ruling on all claims.

The court focused on whether the foreign-market products could be treated as equivalent to the U.S. versions for trademark purposes. It found the differences were material, CNBC reported, even though the medicines shared the same chemical formula. The opinion said Gilead prepares packaging, labeling and patient information for the countries where its medicines are intended to be sold. In the reported Biktarvy shipment, the label instructions were in Turkish.

Gilead said the ruling helps keep medicines outside FDA oversight and its quality safeguards out of the U.S. supply chain, CNBC reported. Alternative funding programs have defended overseas sourcing as lawful and safe, arguing it offers a response to high prescription-drug prices.

How do alternative funding programs fit into employer health plans?

Alternative funding programs, or AFPs, are vendors some self-funded employer plans use to seek lower-cost ways to supply expensive specialty medicines. In a self-funded plan, the employer bears employees’ health-care costs rather than paying an insurer a fixed premium, the Fourth Circuit explained.

Some AFPs obtain brand-name medicines intended for foreign markets, often at lower prices, and arrange for them to reach patients. Not every AFP imports drugs, according to CNBC’s reporting. Federal officials have said foreign-market drug importation of this kind is illegal, while AFPs relying on overseas sourcing dispute that characterization.

The ruling applies to the specified defendants and the challenged Gilead-branded imports. Patient advocacy groups told CNBC it could put pressure on AFPs that rely on such sourcing, but the court did not quantify any broader effect on employers, patients or the AFP industry.

Readers can review the Fourth Circuit’s published opinion for the injunction’s parties and scope.

This story draws on original reporting from CNBC.