PEPTIDES IN CLINICAL PRACTICE: Feb 2026 Risk Analysis and Compliance Framework for Physician-OwnersFDA-Unregulated Substances: Dispensing, Administering, and Navigating the 2026 Enforcement Landscape

PEPTIDES IN CLINICAL PRACTICE: Feb 2026

Risk Analysis and Compliance Framework for Physician-Owners

FDA-Unregulated Substances: Dispensing, Administering, and Navigating the 2025–2026 Enforcement Landscape

Yoon Hang “John” Kim, MD, MPH

Board-Certified in Preventive Medicine

February 2026

ABSTRACT

Background: The U.S. regulatory landscape for peptide therapies has undergone a fundamental transformation between 2024 and early 2026. The FDA’s reclassification of widely used wellness peptides—including BPC-157, CJC-1295, Ipamorelin, TB-500, and AOD-9604—into Category 2 (“Substances with Safety Concerns”) of the 503A Bulk Drug Substances list has effectively prohibited their compounding for human use. Simultaneously, the resolution of GLP-1 agonist shortages (semaglutide and tirzepatide) has eliminated the legal safe harbor that permitted compounding of these commercially available drugs.

Objective: This article analyzes the current federal and state enforcement actions targeting physician-owned clinics that dispense or administer FDA-unregulated peptide substances. It examines the distinct liability pathways for in-clinic administration versus point-of-sale dispensing, catalogues the legal theories deployed by state attorneys general across multiple jurisdictions, and evaluates the regulatory fiction of “Research Use Only” labeling as a compliance strategy.

Methods: A review of FDA enforcement actions, Pharmacy Compounding Advisory Committee (PCAC) proceedings, state attorney general complaints and settlements, state medical board and pharmacy board disciplinary orders, and published legal analyses from healthcare regulatory law firms was conducted covering the period from January 2024 through February 2026.

Results: Enforcement activity has expanded from federal agencies to state attorneys general using consumer protection statutes, deceptive trade practice laws, and public health authority. Key actions include a $300,000 settlement in Connecticut, an asset freeze and clinic closure in Alabama, medical board cease-prescribing directives in Mississippi, and license suspensions in Ohio based solely on the presence of research-labeled peptide vials. The legal theories are portable across state lines and are being deployed against both dispensing and administering models. Malpractice insurance frequently excludes unapproved drug claims, creating uninsured liability exposure.

Conclusions: Physician-owners face a convergent risk environment in which federal reclassification, state enforcement, malpractice exposure, and supply-chain illegality create compounding (non-pharmacological) liabilities. A seven-step compliance framework—encompassing inventory audits, sourcing verification, clinical-business separation, marketing overhaul, medical necessity documentation, insurance review, and ongoing regulatory monitoring—is presented to enable physician-owners to navigate this transition while preserving practice viability.

Keywords: peptide therapy, FDA enforcement, compounding pharmacy, 503A, Category 2, GLP-1, physician compliance, integrative medicine, state attorney general, malpractice liability, BPC-157, research-use-only, deceptive trade practices

Executive Summary

The regulatory environment for peptide therapies in the United States has shifted decisively between 2024 and early 2026. The FDA’s resolution of semaglutide and tirzepatide shortages, aggressive reclassification of popular peptides into Category 2 (“Substances with Safety Concerns”), and a wave of state attorney general enforcement actions have created a fundamentally different risk calculus for physician-owners who dispense or administer peptide products from their clinics.

This article provides an evidence-based analysis of the current enforcement landscape, the specific legal theories being deployed against clinics and physicians, and a practical compliance framework for physician-owners who wish to continue offering peptide-related services without jeopardizing their licenses, assets, or patients.

DISCLAIMER: I am not a lawyer. This is not legal advice. Please consult with your health care attorney for legal advice.

I. The Regulatory Earthquake: What Changed and Why It Matters

A. The FDA’s Category System and Its Impact on Peptide Access

Under Section 503A of the Federal Food, Drug, and Cosmetic Act (FD&C Act), compounding pharmacies may prepare individualized prescriptions using bulk drug substances—but only when those substances meet specific criteria. In 2023 and 2024, the FDA formally classified many of the most popular wellness and longevity peptides into Category 2 of the 503A Bulk Drug Substances list, designating them as presenting “significant safety concerns.” This classification effectively bars licensed compounding pharmacies from using these raw ingredients to prepare medications for human use.

Peptides now classified as Category 2 (prohibited from compounding) include BPC-157, CJC-1295, Ipamorelin, Thymosin Beta-4 (TB-500), AOD-9604, and MK-677 (Ibutamoren), among others. The FDA cited recurring issues: insufficient human safety data, immunogenicity risks, characterization and impurity concerns, and lack of documented historical use in compounding.

For physician-owners, this means that the legal supply chain for these peptides has been severed at the source. If a licensed 503A pharmacy cannot legally compound them, any clinic obtaining these substances is almost certainly sourcing from research-chemical suppliers, overseas manufacturers, or other channels that carry substantial regulatory and liability exposure.

B. The End of the GLP-1 Shortage Shield

Throughout 2023 and much of 2024, the FDA’s declared shortages of semaglutide and tirzepatide provided a legal safe harbor for 503A and 503B pharmacies to compound “essentially a copy” of these commercially available drugs. With the FDA formally resolving these shortages, that shield has been removed. Any compounded GLP-1 prescription written after the shortage resolution must now document a specific, individualized medical necessity—such as a documented allergy to an inactive ingredient in the commercial formulation—not merely a desire for lower cost or dosing flexibility.

The FDA is actively referring mass-marketing compounders to the Department of Justice as of early 2026, and more than 40 state attorneys general co-signed a formal letter to the FDA demanding federal crackdowns on counterfeit, compounded, and research-grade GLP-1s entering the market through unregulated channels.

C. State Attorneys General Fill the Enforcement Gap

Perhaps the most significant development for physician-owners is the emergence of state attorneys general as primary enforcers. Historically, clinics worried about FDA warning letters and state medical board actions. Today, state AGs are deploying consumer protection law—unfair and deceptive trade practices statutes—to pursue clinics, medspas, and online distributors. These actions carry civil penalties, asset freezes, and injunctive relief that can shut down an entire practice overnight.

II. State-by-State Enforcement Landscape

The following table summarizes the major enforcement actions and legal theories deployed across key states between 2025 and early 2026. Physician-owners in any state should study these patterns, as the legal theories are portable across jurisdictions.

State	Key Enforcement Actions	Legal Theories	Risk Signals for Physician-Owners
CT	AG issued C&D letters to lay-owned medspas; secured $300K settlement against online distributor Triggered Brand.	CUTPA (Unfair Trade Practices); Deceptive advertising; Unlicensed operation.	Marketing compounded drugs as “generic” or “FDA-approved”; associating with lay-owned entities without proper medical structure.
AL	AG obtained TRO freezing assets and shutting down Aurora IV & Wellness for injecting “research-grade” peptides.	Deceptive Trade Practice; Consumer protection (mismatch between RUO labels and clinical use).	Purchasing/administering materials labeled “not for human use”; tying your license to research-grade protocols.
MS	AG issued formal public warnings; state regulators instructed providers to cease compounded GLP-1 prescribing for weight loss.	Medical Board directives; Misbranding.	Dispensing compounded weight-loss drugs contrary to board directives; prescribing outside narrow clinical-necessity guidelines.
TX	Strict Medical Board oversight; NAD challenged TX telehealth companies over misleading GLP-1 claims; scrutiny post-HB 3749.	CPOM violations; DTPA; Inadequate delegation and supervision.	Non-physician ownership without MSO; advertising compounded drugs as equivalent to branded products; “medical director” in name only.
CA	Co-signed 40+ state AG letter; Board of Pharmacy expanding aggressive oversight of medspas and IV clinics.	False advertising; Unlawful compounding; Unlicensed pharmacy practice.	On-site mixing/dispensing of bulk APIs without pharmacy license; lax oversight of staff administering compounded injections.
NY	Prominent supporter of multi-state AG coalition demanding federal crackdowns on counterfeit and research-grade GLP-1s.	Consumer Fraud; Deceptive Business Practices; Misbranding.	Offering “bootleg” or imported APIs; failing to disclose unapproved status; mass telehealth prescriptions without established relationships.
OH	Board of Pharmacy issued summary suspensions and settlements against clinics dispensing AOD-9604, BPC-157, and Ipamorelin.	Drug distribution/storage/supply-chain authorities; “Unprofessional conduct.”	Presence of research-labeled vials in clinic refrigerator—regardless of whether patient harm occurred—used as basis for license suspension.

III. The Two Pathways of Exposure: Dispensing vs. Administering

Physician-owners face distinct but overlapping risk profiles depending on whether they dispense peptide products for patient self-administration or administer them directly in-clinic. Both pathways carry serious legal exposure, but the mechanisms differ.

A. Dispensing from the Clinic (“Sale” Model)

When a physician-owned clinic purchases peptide vials or preparations and sells them directly to patients—whether as “take-home” kits or through an in-office dispensary—the clinic steps into the role of a drug distributor. This triggers a cascade of regulatory requirements and potential violations.

Federal exposure: Distributing an unapproved new drug violates the FD&C Act. If the peptide is Category 2, it cannot be legally compounded, meaning any product the clinic dispenses is, by definition, either sourced from a non-compliant compounder or from a research-chemical supplier. Either way, the product is legally classified as adulterated and misbranded.

State exposure: Most states require clinics that dispense medications to hold a dispensing license or pharmacy permit. Operating without one constitutes unlicensed pharmacy practice. Additionally, state consumer-protection laws apply when the clinic’s marketing implies that a research-grade peptide is a safe, tested, or FDA-sanctioned treatment.

Malpractice and insurance exposure: Standard medical malpractice insurance policies typically contain exclusions for the administration or dispensing of unapproved drugs. A clinic dispensing Category 2 peptides may discover—only after a claim is filed—that their insurer denies coverage, leaving the physician-owner personally liable.

B. In-Clinic Administration (“Injection” Model)

When a physician or their supervised staff administers peptide injections on-site, the risk shifts toward direct clinical liability and standard-of-care violations.

Standard of care: Injecting a patient with a substance that the FDA has formally designated as presenting “significant safety concerns” and that cannot be legally compounded sets a nearly indefensible standard-of-care floor. In any malpractice action, the plaintiff’s attorney need only point to the FDA’s Category 2 designation to establish that the physician deviated from accepted practice.

Adverse event liability: Research-grade peptides lack the quality assurance, purity testing, and batch consistency of pharmaceutical-grade products. Adverse events—whether from contamination, incorrect potency, or immunogenic reactions—create direct causation chains from the physician’s needle to the patient’s harm.

Staff liability: Physician-owners who delegate peptide injections to nurses, medical assistants, or other mid-level providers expose those employees to personal liability and expose the practice to vicarious liability claims. In states with strict delegation and supervision laws (notably Texas), inadequate oversight of staff administering unapproved substances compounds the legal risk.

C. The “Recommend, Don’t Dispense” Fallacy

Some physician-owners attempt to create legal distance by recommending that patients obtain peptides independently from online “research” suppliers rather than dispensing directly. This strategy provides no meaningful legal protection. Courts and regulators have consistently held that recommending a patient use an unapproved substance from an unregulated source constitutes a severe breach of the medical standard of care. From an enforcement perspective, it may also constitute aiding and abetting the distribution of unapproved drugs.

IV. The “Research Use Only” Label: A Legal Fiction

The proliferation of peptide suppliers marketing products with “Research Use Only” (RUO) or “Not for Human Consumption” disclaimers has created a dangerous illusion of legal cover. The FDA has been unambiguous in its position: these disclaimers are legally meaningless when the surrounding circumstances demonstrate that the products are intended for human use.

The FDA has pursued enforcement actions against sellers of research-labeled peptides by examining the totality of the marketing context. When products are sold alongside bacteriostatic water, syringes, and dosing guides—or when the seller’s website contains testimonials referencing clinical outcomes—the “research only” disclaimer is treated as a transparent attempt to evade regulatory requirements. The Alabama attorney general’s action against Aurora IV & Wellness specifically targeted the mismatch between “research only” product labeling and the clinic’s overt marketing of those same products for therapeutic injection.

For physician-owners, the lesson is straightforward: if a product is labeled “not for human use,” administering it to a human patient is an indefensible practice. No disclaimer on a supplier’s website transfers liability away from the treating physician.

V. Compliance Framework for Physician-Owners

Despite the challenging regulatory environment, physician-owners are not without options. The following framework provides a structured approach to maintaining a compliant practice while continuing to serve patients who seek peptide-related therapies.

Step 1: Audit Your Current Peptide Inventory and Sourcing

Conduct an immediate physical audit of every peptide product in your clinic. Identify the regulatory status of each substance (FDA-approved, Category 1, Category 2, or no FDA classification). Verify that every product comes from a licensed 503A or 503B pharmacy with a valid Certificate of Analysis from an FDA-registered API manufacturer. Any product sourced from a research-chemical supplier, an overseas manufacturer, or a supplier not registered with the FDA should be removed from clinical use immediately.

Critical: The Ohio Board of Pharmacy has suspended licenses based solely on the presence of research-labeled vials in a clinic’s refrigerator—even absent any evidence of patient harm. Possession alone creates enforcement risk.

Step 2: Verify Compounding Legality for Each Substance

Not all peptides carry the same regulatory status. A small number of peptides remain legally compoundable because they are FDA-approved in other forms, have USP monographs, or are on the Category 1 list. Examples include NAD+ and sermorelin. For GLP-1 agonists, compounding is only legally permissible where a specific, documented clinical necessity exists (such as an allergy to an inactive ingredient in the commercial product) and the substance is sourced from a compliant pharmacy.

Maintain a regulatory status reference document for every peptide your practice uses, and update it quarterly. The FDA’s Pharmacy Compounding Advisory Committee (PCAC) continues to evaluate nominations, and peptide classifications may change in either direction.

Step 3: Separate Clinical Operations from Business Operations

In states with Corporate Practice of Medicine (CPOM) laws—including Texas, California, and New York—the physician-owner must maintain clear separation between clinical decision-making and business operations. If your practice uses a Management Services Organization (MSO) structure, ensure that procurement decisions for pharmaceutical products remain under the physician’s direct control, not the MSO’s. Clinical protocols, formulary decisions, and prescribing patterns must be documented as originating from the physician’s independent medical judgment.

Step 4: Overhaul Your Marketing and Patient Communications

Review every marketing asset—website copy, social media posts, patient brochures, email campaigns—for claims that could trigger enforcement action. The following language patterns are high-risk and should be eliminated immediately:

High-Risk Language	Compliant Alternative
“Generic Ozempic” or “Generic Wegovy”	Do not reference brand names in connection with compounded products.
“FDA-approved peptide therapy”	“Physician-supervised peptide consultation” (only if the specific peptide is legally prescribable).
“Clinically proven to heal/regenerate/reverse aging”	Reference published research with appropriate qualifiers; avoid definitive therapeutic claims.
“Safe and natural alternative”	Avoid characterizing unapproved substances as “safe” without FDA-recognized evidence.

Step 5: Document Medical Necessity Rigorously

For any compounded peptide that remains legally prescribable, the patient’s medical record must contain thorough documentation of individualized medical necessity. Generic notations such as “patient desires weight loss” or “patient interested in peptide therapy” are insufficient. The record should demonstrate the physician’s clinical reasoning for why a compounded formulation is medically necessary for this specific patient, why the commercially available alternative is contraindicated or inadequate, what informed consent was obtained (including disclosure of unapproved status where applicable), and the monitoring plan for efficacy and adverse effects.

Step 6: Secure Appropriate Insurance Coverage

Contact your malpractice carrier and request a written confirmation of whether your policy covers claims arising from the administration or dispensing of compounded peptides and off-label treatments. If your carrier excludes these activities—as many standard policies do—you are self-insuring against potentially catastrophic claims. Explore supplemental or specialty coverage designed for integrative, functional, or regenerative medicine practices.

Step 7: Establish a Compliance Review Cadence

Regulatory change in this space is rapid and often unannounced. Establish a quarterly compliance review that includes monitoring FDA PCAC proceedings for peptide reclassification, reviewing state medical board bulletins and attorney general press releases, updating your formulary and sourcing documentation, re-training staff on updated protocols, and consulting with your healthcare regulatory attorney on new developments.

VI. The Integrative Medicine Physician’s Perspective

As integrative medicine physicians, we occupy a unique position in this landscape. Our patients seek therapies that fall outside conventional pharmaceutical channels, and many of the peptides now restricted by the FDA have been part of integrative and functional medicine protocols for years. The regulatory crackdown feels, to many in our community, like an overreach that prioritizes pharmaceutical industry interests over patient access to individualized care.

That perspective has merit, and legal challenges to the FDA’s peptide restrictions are underway on multiple fronts—procedural, statutory, and constitutional. However, a legal challenge being underway does not protect your license today. The enforcement landscape as it exists in February 2026 demands that physician-owners make compliance decisions based on the law as it is, not as we believe it should be.

The most prudent path forward for physician-owners is to maintain strict compliance with current regulations, support and participate in the legal and legislative efforts to restore access to these therapies through proper channels, educate patients honestly about the regulatory status of peptide therapies, and continue offering the many evidence-based integrative treatments that remain unaffected by these regulatory changes.

VII. Conclusion: Protecting Your Practice, Your Patients, and Your License

The 2025–2026 enforcement wave targeting peptide clinics is not a temporary fluctuation—it represents a structural realignment of how regulators view these substances. Physician-owners who continue to dispense or administer Category 2 peptides or research-grade substances without adapting to this new reality face an accumulation of risks: FDA referral to the DOJ, state attorney general asset freezes, medical board disciplinary action, malpractice exposure without insurance coverage, and reputational harm that can end a career.

The compliance framework outlined in this article is not about abandoning your patients or your clinical philosophy. It is about ensuring that your practice survives this regulatory transition so that you can continue to serve your patients with integrity for decades to come.

As I often say: Luck favors the prepared bold. Being bold in integrative medicine means pushing boundaries in clinical thinking—not in regulatory compliance. Prepare meticulously, practice boldly within the law, and your patients and your license will be well served.

DISCLAIMER: I am not a lawyer. This is not legal advice. Please consult with your health care attorney for legal advice.

About the Author

Yoon Hang “John” Kim, MD, MPH, is a board-certified integrative medicine physician with over 20 years of clinical experience. He completed his integrative medicine fellowship at the University of Arizona under Dr. Andrew Weil and operates Direct Integrative Care, a membership-based telemedicine practice. Dr. Kim is the author of three books and over 20 articles on Low-Dose Naltrexone therapy and leads an LDN Support Group with over 7,000 members. He specializes in complex conditions including autoimmune disorders, chronic pain, and mold toxicity.

Learn more: www.directintegrativecare.com

References

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