FDA and HHS Hammer Hims & Hers In Compounded Drug Crackdown

Hims & Hers (NYSE:HIMS) shares are plunging 16% in after-hours trading following coordinated moves by two federal agencies against its compounded weight-loss drugs. The Food and Drug Administration (FDA) announced plans to restrict active ingredients in non-approved compounded GLP-1 medications, citing safety and quality issues. This came one day after Hims launched a $49 monthly compounded oral semaglutide as a lower-cost alternative to approved drugs like Wegovy. 

Meanwhile, the Department of Health and Human Services (HHS) referred Hims to the Justice Department (DOJ) for potential federal drug law violations. The actions highlight ongoing tensions over compounded GLP-1s amid stabilizing supplies of branded versions.

FDA Cracks Down on Compounded Alternatives

The FDA stated it would use all enforcement tools — including seizures and injunctions — against companies marketing unapproved compounded GLP-1 products, with agency Commissioner Martin Makary emphasizing the FDA cannot verify the quality, safety, or efficacy of these drugs. 

Compounded versions lack FDA review and may involve misleading claims of equivalence to approved treatments.  The policy shift follows prior warnings to Hims in 2025 for similar promotional issues. The agency plans to restrict GLP-1 active pharmaceutical ingredients intended for use in non-approved compounded drugs, targeting mass-marketing practices that claim similarity to FDA-approved products.

HHS Escalates Scrutiny with DOJ Referral

HHS General Counsel Mike Stuart confirmed the referral to the DOJ, focusing on possible breaches of the Federal Food, Drug, and Cosmetic Act. This targets Hims’ compounded GLP-1 offerings, including the newly launched pill. Novo Nordisk (NYSE:NVO), maker of Wegovy, accused Hims of illegal compounding and deceptive marketing, pledging legal and regulatory responses. 

The company called the product an unapproved, inauthentic, and untested knockoff posing risks to patients. Novo welcomed the FDA and HHS actions, noting they protect patients from unapproved knockoffs made with potentially inauthentic ingredients.

Drugmakers Demand Action on Compounders

Eli Lilly (NYSE:LLY | LLY Price Prediction) and Novo Nordisk have long urged government intervention against compounders of their GLP-1 drugs. Lilly applauded the FDA’s steps, noting compounders use substandard ingredients from illicit foreign suppliers without clinical evidence of safety or efficacy. 

Novo has highlighted impurities and untested dosing in compounded versions. Both firms previously petitioned the FDA to prohibit compounding of semaglutide and tirzepatide. Novo emphasized that its approved products undergo rigorous testing, unlike compounded alternatives that bypass standard regulatory review.

In response, Hims & Hers affirmed compliance with laws and commitment to consumer safety. The company expressed willingness to collaborate with the FDA to ensure affordable access. It sources ingredients from FDA-registered facilities and adheres to regulatory standards. 

Concerning the referral, Hims stated it operates with a deep commitment to consumer safety and in compliance with applicable law. The company has previously addressed FDA concerns about marketing language and maintains that compounded medications are not FDA-approved but meet patient needs during shortages.

Ongoing Safety Risks with Compounded Drugs

Compounded GLP-1s have led to reports of dosing errors, contamination, and adverse events like pancreatitis and gallstones. The FDA has documented hospitalizations and quality issues, including improper storage during shipping. 

While allowed during shortages, as Hims noted, mass marketing violates guidelines as branded supplies improve. The agency has received reports of risks from compounded semaglutide, reinforcing concerns over unverified purity and consistency compared to approved drugs.

Key Takeaway

Hims & Hers built much of its recent momentum by aggressively entering the high-demand GLP-1 weight-loss market with low-cost compounded alternatives, a strategy that carried substantial regulatory risk from the start. By positioning itself in the gray area between legitimate compounding during shortages and mass-marketed substitutes for branded drugs, the company exposed itself to exactly the kind of federal pushback now unfolding. 

Its growth has relied heavily on its weight-loss offerings, which accelerated subscriber and revenue expansion in recent years. In 2024, revenue reached $1.5 billion, up 69% year-over-year, with non-GLP-1 segments growing 43% to over $1.2 billion. The company projected weight-loss revenue of $725 million in 2025, contributing significantly to overall guidance of $2.3 billion to $2.4 billion. 

With the FDA moving to limit key ingredients and HHS escalating to a DOJ referral, the path for continued reliance on compounded semaglutide appears to be closing rapidly. While Hims maintains a diversified telehealth platform with meaningful growth in non-weight-loss verticals, the GLP-1 business now faces severe constraints that could materially slow overall revenue trajectory and pressure valuation in the near term.