The Trump administration’s fiscal year 2027 budget proposal to require that compounding pharmacies disclose prominently that their products have never been evaluated by the Food and Drug Administration (FDA) is long overdue; this is a reasonable requirement that advances consumer protection. Unfortunately, the administration couples this sensible proposal to increase transparency with a broader effort to restrict truthful advertising about the most rigorously tested products in the world—FDA-approved prescription drugs. Under the latter, the FDA would enjoy new statutory authority to deem a drug illegally criminally “misbranded” if its advertisements lack fair balance or make misleading efficacy claims. Congress should adopt the good idea and reject the bad one.

The Proposal

The FDA’s fiscal year 2027 budget request, released on April 7, 2026, asks Congress to amend the Federal Food, Drug, and Cosmetic Act to give the agency new enforcement tools to limit direct-to-consumer (DTC) pharmaceutical advertising. The budget document contends that the FDA “needs additional authorities to more effectively regulate DTC advertising that lacks fair balance and is frequently misleading and confusing to consumers and patients.” The proposal would allow the FDA to deem a drug misbranded if a DTC ad creates “a misleading impression” about a drug’s approved indications or efficacy, or makes “overstated representations that are not supported.”

The budget’s compounding provision is different—and better. Under the proposed language, a compounded drug would be deemed misbranded if its advertising fails to “clearly and prominently disclose” that the FDA has not approved or evaluated the product “for safety, effectiveness, or quality prior to marketing.” Compounders would also be prohibited from suggesting their products are safe and effective without evidence, from making misleading comparisons to FDA-approved drugs, or from misrepresenting clinical trial data from approved medicines as applicable to their own products.

These budget proposals follow an enforcement campaign that began in September 2025, when President Trump signed a presidential memorandum directing HHS Secretary Robert F. Kennedy Jr. to crack down on misleading DTC ads. The FDA immediately published untitled and warning letters alleging advertising violations by Bristol Myers Squibb, Eli Lilly, Novartis, AstraZeneca, AbbVie, and others. The agency has continued this enforcement effort into 2026.

The Compounding Disclosure Proposal

The compounding disclosure requirement is a straightforward consumer protection initiative with a strong constitutional foundation. In 2025, the market for compounded GLP-1 drugs—weight loss injectables made by compounding pharmacies to fill gaps during the Ozempic and Wegovy shortage—exploded. Companies, including Hims & Hers, promoted compounded semaglutide aggressively, often without making clear that these products had not been reviewed by the FDA for safety, effectiveness, or manufacturing quality. The shortage has now largely resolved, with Hims & Hers recently ending its compounded GLP-1 program. But the disclosure gap remains.

Requiring sellers of compounded drugs to state plainly that their products have not been evaluated for safety and efficacy is a plainly truthful, factual statement no different from requiring automakers to certify fuel economy, or requiring used car dealers to swear they have not tampered with the odometer. We require these disclosures because consumers cannot independently verify the claims. The same logic applies here—but with far higher stakes for human health.

The Supreme Court’s 2002 decision in Thompson v. Western States Medical Center held that the government may not ban advertising for compounded drugs. But the Court’s opinion drew a critical distinction: the government is free to regulate commercial speech to ensure that it is truthful. Ethically and legally, the truthfulness of speech is the benchmark against which government regulation should be measured. The Court in Thompson also concluded that the government must demonstrate a substantial policy interest in limiting speech, and it must use the least intrusive measure of regulation to accomplish its objectives.

Requiring disclosure—telling patients what they are buying and the extent to which it has been reviewed by the FDA—does not restrict speech. Instead, the context required by the proposed disclosure results in a truthful presentation to consumers with minimally intrusive, additional speech.

The DTC Drug Advertising Restriction Proposal

At the same time, the administration’s proposal to further limit advertising for FDA-approved prescription drugs is unwarranted and will likely deter companies from presenting the benefits and risks of their products to the public. Secretary Kennedy (like his boss in the Oval Office) delights in provocation, and has called FDA-approved drug advertising a “pipeline of deception.” It is not. Prescription drug advertising, including DTC advertisements broadcast on television and the internet, has long been reviewed by the FDA and includes mandatory safety disclosures, side effect warnings, and other information about the risks and benefits of the drug.

In his telling, Kennedy suggests that we are now living in an era similar to that of the 1960s, when tobacco manufacturers suppressed data and operated without federal oversight to drive sales and foster addiction among teenagers. This is a red herring. Unlike the tobacco companies of yore, pharmaceutical manufacturers must compile and submit to the FDA reams of preclinical and clinical trial data before they are permitted to market a drug. This approval process is the safeguard; the advertising is merely the announcement at the conclusion of a successful regulatory evaluation.

Current law already prohibits misleading or imbalanced ads, and the FDA has broad discretion to review and communicate remedial concerns with companies. The new legislation would automatically designate specific types of DTC ads as criminally “misbranded” if they are judged to convey a misleading impression, lack fair balance or contain overstated representations. These are not clear, bright-line tests, but subjective judgments that are susceptible to disagreement. And the penalties are severe, which can include seizure of the advertised drug and corporate officer criminal liability under the Park doctrine. This new law and the associated penalties would almost certainly cause companies to reconsider whether to run advertising messages on complex products where it might be argued that the presentation is not fair and balanced.

The public health cost of suppressing that announcement is real. DTC ads for conditions like depression, atrial fibrillation, HIV, and type 2 diabetes have prompted millions of patients to seek diagnoses and treatments they would not otherwise have received. The alternative to an informed patient is not a better-informed patient—it is an undiagnosed one. While it is true that drug companies focus much of their promotional efforts on physicians practicing in the relevant specialty, restricting DTC ads would harm those people least likely to have proactive physician relationships: lower-income families, those living in rural communities, and the underinsured. And newly approved therapies—drugs in their launch phase that are not widely known to the general public—are the most dependent on DTC advertising to reach patients.

The Contradiction

The inconsistency in the administration’s approach is confounding. While the White House budget proposal calls for more disclosure on products produced by compounding pharmacies, Secretary Kennedy has simultaneously pushed the FDA to loosen restrictions on roughly 14 injectable peptide compounds—announcing the move on a podcast, without a formal regulatory process or scientific advisory review. These peptides have no FDA-approved human trial data. Moreover, independent testing has found purity failures in commercially available peptide products. In 2025, two women were hospitalized on ventilators after receiving peptide injections at a Las Vegas wellness conference. Despite these concerns, Kennedy’s answer is to deregulate.

Yet the administration would threaten criminal misbranding for messages that constitute truthful speech about FDA-approved prescription drugs, in a manner that is at odds with First Amendment commercial speech principles. Federal courts have emphatically applied the principle announced by the Supreme Court in Thompson: the government’s regulation of truthful speech must be as minimally intrusive as possible to address the compelling government interest. In the late 1990s, the U.S. District Court ruled in a series of cases brought by the Washington Legal Foundation that the FDA has a substantial interest in protecting public health, but it may not unreasonably restrict or limit truthful speech.

Congressional Action

In considering these budget proposals, we urge Congress to enact the compounding disclosure provision. Patients who inject compounded weight loss drugs or peptide compounds deserve to know, plainly and prominently, that no federal agency has reviewed what they are putting into their bodies. This supports longstanding sound regulatory principles of transparency, clarity, accountability, and policy congruity. You could say that it would be the biomedical equivalent of the automobile odometer certification.

But Congress should reject the broader proposal to suppress DTC advertising for FDA-approved drugs. The answer to concerns about misleading pharmaceutical ads is better enforcement of existing fair balance requirements—not new statutory authority designed to make the risks associated with broadcast advertising so great that it disappears entirely and consumers are left uninformed.

David Beier is a prominent healthcare policy expert and former Chief Domestic Policy Advisor to Vice President Al Gore. He spent two decades in senior leadership at Amgen and Genentech and is currently a Managing Director at Bay City Capital. He has long been an advocate for First Amendment protections regarding truthful commercial speech in the life sciences.

John Osborn is a veteran life sciences executive and lawyer who was General Counsel of Cephalon, Dendreon and US Oncology. He served with the U.S. Department of State in the George H.W. Bush administration and later was a member of the U.S. Advisory Commission on Public Diplomacy. He currently is a Senior Advisor with Hogan Lovells, an affiliate professor of law at the University of Washington, Seattle and a member of the board of advisors at Dartmouth’s Geisel School of Medicine. His 2010 article in the Yale Journal of Health Policy, Law and Ethics was cited by the U.S. Court of Appeals for the 2nd Circuit in United States v. Caronia (2012), where the Court held that truthful, off-label scientific and medical information was protected speech under the First Amendment.