FDA Signals More Oversight of Compounders in Drug Ads Crackdown

The FDA is signaling fresh control over the promotion of copycat drugs under President Donald Trump’s executive order to rein in pharmaceutical advertising, staking a position in a regulatory gray area around so-called compounded products.

On Tuesday, Trump’s executive order called for “action to ensure transparency and accuracy in direct-to-consumer prescription drug advertising.”

The Food and Drug Administration then sent hundreds of letters to drug companies warning of deceptive promotions, which included notices to online telehealth companies that market the compounded products, a spokesperson for the US Department of Health and Human Services said in an email.

“The FDA is clearly looking to take a more aggressive stance with deceptive advertising practices, and that will include non-traditional targets,” said Melissa Wong, a life sciences attorney at Holland & Knight.

“We do not know who the recipients of the cease-and-desist letters are, so it’s difficult to tease out the precise advertising practices that the FDA is most concerned about,” Wong said. “Ultimately though, the FDA is putting the entire industry and those non-traditional stakeholders on notice.”

Advertising for compounded drugs—which are customized copies of FDA-approved treatments for specific patients—fall through what critics call a regulatory loophole that doesn’t require the same kind of government sign-off as brand-name products.

The telehealth companies marketing the compounded drugs argue their advertisements are purview ofthe Federal Trade Commission, which oversees ads for over-the-counter drugs, and not the stricter advertising rules for FDA-reviewed prescription medications.

Compounded drugs, which are often cheaper than brand-name products, run the gamut from specialized pain medications to weight loss treatments. The market for copycats of Novo Nordisk A/S‘s blockbuster obesity treatment Wegovy surged in recent years due to the drugmaker’s shortage issues.

The timing of the executive order on drug ads complements the health department’s “Make America Healthy Again” strategy, a policy roadmap released this week.

The strategy mentioned greater enforcement from the HHS, FDA, FTC, and the Department of Justice for violations of direct-to-consumer prescription drug advertising laws, prioritizing social media influencers and DTC telehealth companies.

Reviving a Debate

The FDA’s move is significant as it is wades into an industry debate on which ads the agency or the FTC can regulate.

The FDA oversees prescription drug advertisements and requires them not to be false or misleading, have a balance between efficacy and risk information, and be truthful.

The FTC, meanwhile, primarily oversees advertisements for over-the-counter drugs to ensure claims are truthful and non-deceptive.

“If there are clear-cut violations related to, for example, off-label use or messaging that omits discussion of potential side effects, these issues are more likely to continue to reside with FDA enforcement,” Wong said. “If there is an issue with how telehealth companies or pharmacies sell their products and services to the general public, it may make more sense for the FTC to lead the charge.”

Still, the FDA has taken some authority over compounded drug ads in the past, sharing that if the agency has concerns that compounders’ promotional materials are false or misleading, it may seek voluntary compliance.

Additionally, “where FDA believes that there is written printed or graphic material for any FDA-regulated product, it it will assert jurisdiction,” said Alan Minsk, a partner at Arnall Golden Gregory LLP.

“For pharma manufacturers, it’s pretty clear because all of their advertising is regulated by the FDA,” said James Boiani, a member of Epstein Becker & Green PC. “For compounders, it’s more nebulous.”

Clarity on the oversight is important as the telehealth industry continues to promote ads for compounded drugs that are unapproved by the FDA, especially for increasingly popular obesity treatments.

“FDA purview really runs only to people who make, manufacture, sell, and distribute medicines, which includes compounders,” said Dan Troy, a former chief counsel at FDA and now managing director at BRG. “But if you’re just talking about your ability to prescribe these things, then that falls outside of FDA’s purview.”

The FTC did not respond to requests for comment on the executive order.

Different Rules

Drug compounders argue that their advertisements fall under the FTC’s jurisdiction.

That claim was in focus earlier this year when telehealth company Hims & Hers aired a Super Bowl commercial that promoted the use of its compounded version of Wegovy.

Compounders defended the commercial and said it’s a help-seeking ad that encourages viewers to consult with a health-care provider. The ad, therefore, isn’t under the FDA’s purview and doesn’t need to mention side effects of the drug, they said.

“We can’t claim safety and efficacy because safety and efficacy is determined through a length of time at the various phases of trials that drugs go through for the FDA approval process,” Matthew Montes de Oca, chief clinical officer for Strive Pharmacy, said generally about compounded drug promotions.

“I don’t know that we even want to claim safety and efficacy on our drugs as compounded meds because what might be safe and efficacious for one individual might not be safe and efficacious for the next individual,” he said. “That’s where it really allows us to step in and play our part so that we can alter these medications for the individual patient.”

The Alliance for Pharmacy Compounding, which said it was still reviewing the FDA’s announcement, shared earlier this year that compounded medications have different rules for marketing and advertising.

“The FTC certainly has more broad jurisdiction over truthfulness and advertising and consumer honesty and non-deception,” said Nathaniel Lacktman, chair of Foley & Lardner LLP’s telemedicine and digital health industry team.

Telehealth companies could argue their ads are for clinical conditions and not a specific drug product, however, “there could be a better, more persuasive argument if the ads themselves were limited just to ‘hey, we as a telehealth company diagnose and treat A,B,C conditions,’” Lacktman said.