Regulatory Pressure Mounts for Telehealth Provider Hims & Hers

Shares of telehealth company Hims & Hers Health came under significant selling pressure after the U.S. Food and Drug Administration (FDA) issued a formal warning letter targeting the company’s advertising practices. The September 9, 2025 communication accused the company of making “false or misleading” claims regarding its weight loss medications, directly challenging a core segment of its business operations.

Questionable Marketing of Compounded Alternatives

The regulatory action focuses on how Hims & Hers has presented its semaglutide-based formulations. According to the FDA, the company’s website created a misleading impression by stating these products contain the “same active ingredient as Ozempic and Wegovy” and feature “clinically proven ingredients.” These assertions are particularly problematic because the compounded medications lack formal FDA approval for these uses.

This marketing approach appears to violate federal drug labeling regulations. The company had positioned these offerings as accessible alternatives to the popular injectable weight loss drugs from pharmaceutical giants Eli Lilly and Novo Nordisk, entering a lucrative market previously constrained by supply limitations.

Broad Regulatory Crackdown Underway

The warning to Hims & Hers was not an isolated event but part of a coordinated industry sweep. On that same September date, the FDA distributed over 100 similar communications to various pharmaceutical sector participants, including both major corporations and smaller entities.

FDA Commissioner Marty Makary indicated this represents just the beginning of intensified oversight, with plans for approximately 100 cease-and-desist orders and thousands of additional warning letters. The agency’s message is unequivocal: regulators are adopting a more aggressive stance against questionable marketing practices, especially those involving GLP-1 receptor agonists and related weight management therapies.

Market Reaction and Executive Response

Investors responded decisively to the regulatory developments, with Hims & Hers shares declining more than 6% on September 16. The stock has demonstrated extreme volatility throughout 2025, retreating to the mid-$40 range after reaching record highs near $73 in February.

Chief Executive Officer Andrew Dudum addressed concerns through social media channels, emphasizing that the FDA’s focus on ensuring informed patient decisions aligns with his company’s core mission. He stated that Hims & Hers maintains collaborative relationships with regulatory bodies to prioritize customer safety.

Should investors sell immediately? Or is it worth buying Hims & Hers?

Regulatory Gray Area Creates Uncertainty

The fundamental regulatory challenge stems from the company’s strategic decisions. Hims & Hers initiated its compounded semaglutide offering in May 2024 amid shortages of the branded medications. While compounding pharmacies are legally permitted to address drug supply gaps, the FDA asserts the official shortage declaration ended in February 2025.

The company maintains that its “personalized” dosing approaches and formulations address individual patient needs while remaining within legal boundaries. This regulatory gray area now appears to be undergoing clarification through enforcement actions rather than revised guidance.

Strong Operational Performance Continues

Despite these regulatory headwinds, the company’s underlying business metrics remain robust. Second-quarter 2025 financial results showed revenue climbing 73% to $544.8 million, while subscriber numbers reached 2.4 million—representing 31% growth. Adjusted EBITDA increased substantially to $82.2 million.

Management reaffirmed full-year 2025 revenue guidance of $2.3 to $2.4 billion. In a September 10 announcement, the company also revealed expansion into men’s health with oral testosterone treatments, marking its first major category extension since entering the weight management market in 2023.

Industry-Wide Implications

The FDA’s coordinated action signals potentially lasting changes in how regulators oversee telehealth providers and compounding pharmacies. With Health Secretary Robert F. Kennedy Jr. known for his critical stance on pharmaceutical marketing practices, companies operating in this space may face sustained regulatory scrutiny.

Hims & Hers now faces a 15-day deadline to respond to the alleged violations. How the company navigates this regulatory challenge while maintaining its rapidly expanding subscription business will likely determine its near-term financial trajectory.