Peptides Are Getting a Legal Opening. Why Telehealth Companies Stand to Benefit

Peptides have become a growing business for wellness clinics and online health platforms, with products marketed for everything from muscle recovery to anti-aging. Now, the federal government is easing restrictions on some of these substances, opening up a potentially lucrative market for compounding pharmacies and telehealth companies.

What the new policy allows

The Department of Health and Human Services announced on Oct. 28 that it won't take enforcement action against licensed pharmacies and physicians that compound six previously restricted peptide ingredients.

Peptides are short chains of amino acids, while compounding involves preparing customized medications for individual patients.

The decision comes with several conditions. Pharmacies must verify the identity and purity of their ingredients, report serious adverse events such as deaths and hospitalizations, and disclose contamination or quality issues.

Ingredients must also come from FDA-registered manufacturing facilities, and prescriptions must be issued for specific patients.

Importantly, the policy doesn't mean the FDA has approved these peptides. It temporarily allows certain compounding activities without enforcement action, provided the conditions are met.

The new market for pharmacies

The financial opportunity could be substantial. Analysts estimate the peptide market could quickly grow to between $2B and $3B if the products gain a legitimate route to consumers.

That would create another revenue opportunity for compounding pharmacies, which already supply customized medications to physicians, clinics, and hospitals.

Health Secretary Robert F. Kennedy Jr. has argued that tighter oversight could help move consumers away from unregulated peptide products, including those shipped from China.

Speaking to Fox News, Kennedy said the goal was to ensure manufacturing facilities undergo inspections and products contain the ingredients advertised.

The industry's interest is already apparent. Six outside organizations requested meetings with the White House to discuss the proposal, including the Alliance for Pharmacy Compounding and Hims & Hers HealthHIMS.

Telehealth companies see an opening

Online healthcare platforms could become a major distribution channel for compounded peptides. Telehealth is already an established way for patients to access prescription medications.

A KFF survey conducted in late 2025 found that 17% of adults who had used GLP-1 drugs obtained them through an online provider or website, compared with 76% who received them through a doctor.

Hims & Hers has previously told investors it plans to offer compounded peptides once permitted. The company was also the first business with a direct commercial interest to appear on the White House's public meeting log.

The opportunity comes as Hims faces pressure in its weight-loss business. In March, the company announced it would stop advertising compounded GLP-1 medications and shifted its US weight-management business toward FDA-approved treatments.

A peptide offering could provide another product category for its existing telehealth platform, although the temporary policy leaves questions about how aggressively the company can expand.

The FDA remains concerned

The decision has also exposed disagreements within federal health agencies.

Most FDA scientific staff opposed the proposal, according to six people familiar with the process, warning that it could weaken protections against unproven medical products.

The agency had previously restricted the compounding of more than a dozen peptides, including BPC-157 and TB-500, in 2023 over concerns involving allergic reactions, kidney damage, and potential tumor growth.

HHS initially sought a formal rule declaring the substances safe, but FDA officials declined to support that approach.

The department instead adopted a temporary enforcement policy, which can be reconsidered if safety or manufacturing problems emerge.

What investors should watch

The clearest commercial opportunity lies with compounding pharmacies, outsourcing facilities, and telehealth providers that can distribute these products through regulated channels.

For investors, Hims & Hers is one company worth watching, given its existing customer base and stated interest in compounded peptides.

But the regulatory uncertainty remains significant.

Leerink Partners analyst Michael Cherny cautioned that the policy falls short of the full approval Hims would need before making a major commitment.

The company also faces separate legal challenges. The FTC, Utah, and California sued Hims in July over privacy, billing, and cancellation practices. Hims filed a motion to dismiss on Oct. 22, with a hearing scheduled for January 2027.

For now, Washington has made it easier for some peptide products to reach patients, but it hasn't settled whether they are safe or should receive permanent approval.

That leaves companies with a potential new source of revenue, and investors with a market whose future still depends heavily on regulators.