The Department of Health and Human Services (HHS) has referred Hims & Hers Health, Inc. to the Department of Justice (DOJ) for investigation over potential violations related to compounded GLP-1 weight-loss drugs. The referral, announced February 6, 2026 by HHS General Counsel Mike Stuart, cites a "review of applicable facts" suggesting potential violations of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and federal criminal statutes.
The Core Allegations
The investigation appears to center on Hims' telehealth model for selling compounded versions of GLP-1 drugs (semaglutide, the active ingredient in Ozempic/Wegovy). Key allegations include:
1. Unapproved and Misbranded Drugs
Hims markets compounded GLP-1 injections that are not FDA-approved, claiming they contain "the same active ingredient" as branded drugs without adequate disclaimers or evidence of equivalence.
Compounded drugs are allowed during shortages under FD&C Act Section 503A/B, but the FDA argues Hims exceeds this by mass-marketing them as substitutes — potentially rendering them "new drugs" requiring approval.
Prior enforcement: In September 2025, the FDA issued a warning letter to Hims for "unlawful sale of unapproved and misbranded drugs," citing misleading website claims and failure to meet compounding standards. Over 100 similar letters went to other telehealth firms.
2. Potential Criminal Elements
If willful intent is proven, this escalates to crimes including:
- Mail/wire fraud (18 U.S.C. § 1341/1343)
- Conspiracy (18 U.S.C. § 371)
This is especially relevant if deceptive advertising induced purchases or any products touched Medicare/Medicaid indirectly.
Supply chain risk: Hims has sourced from entities like Belcher Pharmaceuticals, which has fraud convictions (executives pleaded guilty to misbranding in 2020). A whistleblower suit against Belcher alleges widespread fraud — if supply chain issues contributed to violations, it could implicate Hims.
3. Regulatory Context
This fits DOJ/HHS priorities under their 2025 False Claims Act Working Group targeting prescription drug fraud. In FY 2025, DOJ recovered over $5.7 billion in healthcare FCA cases.
On the same day as the referral, FDA Commissioner Martin A. Makary announced the agency's intent to restrict GLP-1 active ingredients for non-approved compounded drugs, explicitly naming Hims as a mass-marketer: "FDA Intends to Take Action Against Non-FDA-Approved GLP-1 Drugs".
How Solid Is the Case?
Strengths
- Evidentiary foundation: Concrete FDA findings from warnings and inspections. Precedents include DOJ's 2025 settlements for similar schemes (e.g., $1M with Advanced Inventory Management) and felony pleas for misbranding.
- Alignment with priorities: Matches DOJ/HHS focus on telehealth fraud. High recovery rates in similar cases ($14.6B in 2025 takedowns).
- Escalation potential: Supplier fraud ties could strengthen conspiracy claims. FTC probes from August 2025 on ads/subscriptions add pressure.
Weaknesses
- Early stage: No indictments or detailed evidence released. DOJ accepts only ~20-30% of FCA referrals historically.
- Available defenses: Hims could claim reliance on pharmacies for compliance, or that claims are "puffery" not fraud. Ongoing semaglutide shortages provide gray area under FD&C Act exemptions.
- No public legal analysis yet: Most coverage is factual reporting. Outcomes depend on DOJ's evidence review, which could take months.
Market Reaction
HIMS stock dipped ~2% on the news — reflecting market perception of risk but not panic. The muted reaction suggests investors view this as manageable regulatory risk rather than existential threat.
What to Watch
- DOJ decision: Will they accept the referral and open a formal investigation?
- Subpoenas: Any formal requests for documents would signal escalation
- FDA restrictions: How broadly will the GLP-1 compounding restrictions apply?
- Settlement vs. prosecution: Similar probes often resolve via fines/reforms rather than trials
Timeline of Regulatory Escalation
| Date | Event |
|---|---|
| August 2025 | FTC launches investigation into Hims over advertising practices and subscription cancellation complaints |
| September 2025 | FDA issues warning letter for "unlawful sale of unapproved and misbranded drugs" — part of 100+ letters to telehealth firms |
| February 6, 2026 | HHS refers Hims to DOJ, escalating to potential criminal matter |
| February 6, 2026 | FDA announces intent to restrict GLP-1 compounding, names Hims explicitly |
What Happens Next: The DOJ Process
Once HHS refers a matter to the DOJ, the process typically unfolds:
1. Review and Acceptance (Weeks to Months)
The DOJ's Consumer Protection Branch evaluates the referral, including evidence from HHS/FDA inspections, consumer complaints, and prior warnings. They decide whether to accept the case. Historically, DOJ accepts ~20-30% of FCA referrals.
2. Investigation (If Accepted)
DOJ attorneys and federal agents (FBI, FDA's Office of Criminal Investigations) gather evidence:
- Subpoenas for documents
- Interviews with employees, customers, suppliers
- Audits of Hims' operations
- Review of marketing materials and claims
3. Focus Areas
- Misbranding/false advertising under FD&C Act (claiming compounded drugs are equivalent to FDA-approved ones without proof)
- Criminal intent — knowingly distributing unapproved drugs (potential Title 18 charges: mail/wire fraud, conspiracy)
4. Potential Outcomes
| Outcome | Description | Likelihood |
|---|---|---|
| No Action | Insufficient evidence, case dropped | Low-Medium |
| Civil Penalties | Fines, injunctions, consent decree requiring compliance changes | High |
| Criminal Charges | Indictments targeting company/executives. FD&C Act: up to $250K fines per count, 1-3 years prison | Low |
| Deferred Prosecution | Hims agrees to reforms, monitoring, payments to avoid full prosecution | Medium-High |
Timeline: Investigations typically last 6-24 months. Given the Trump administration's emphasis on pharmaceutical accountability, this could move faster.
Community Reaction
Public reactions on X are mixed. Some call it an "own goal" due to Hims' aggressive business model. Others predict it as a temporary "stick in the eye" that will resolve via settlement. The @himshouse investor community notes this escalates prior FDA warnings to potential criminal territory.
After Hours: Hims is down 14%
The HHS referral is solidly rooted in regulatory violations with strong precedential support. However, it's early stage — no charges filed, and Hims has defenses available. The case becomes more serious if willful intent is established or supplier fraud connections emerge.
For now, this represents regulatory overhang rather than confirmed liability. Similar situations have resolved with settlements and business model adjustments. The ~14% after-hours move suggests the market is pricing in elevated risk and uncertainty.
HIMS