The news: The FDA is asking for expanded authority over direct-to-consumer (D2C) drug advertising in its 2027 budget proposal, including expanding the definition of misbranded drugs and more directly targeting compounded drugs under the Food, Drug, and Cosmetic (FD&C) Act.

• The proposal would classify drug ads as misbranded if they lack fair balance (meaning the risks and benefits of a drug are equally presented), misrepresent FDA approval, or overstate a drug’s efficacy.
• Compounded drug ads would have to clearly state they are not FDA-approved nor evaluated for safety, effectiveness, or quality. They also could not claim safety or effectiveness without proof, mislead in comparisons, or use data from approved drugs.

Why it matters: While current regulations already prohibit false or misleading advertising, the proposal would codify specific violations into the FD&C Act. By defining a drug as misbranded if an ad lacks fair balance, misleads on FDA approval, or overstates benefits and efficacy, the FDA would have a clearer, faster path to enforcement. The expanded compounded drug rules would also add more defined standards beyond the current broad prohibition on false or misleading claims.

Both moves follow the FDA’s crackdown on D2C advertising last September, including actions against compounders—especially GLP-1 weight loss sellers and telehealth companies—and a broader increase in enforcement of both pharma and telehealth promotions.

Implications for pharma and telehealth marketers: The FDA typically must build a legal case that ads violate the FD&C Act—gathering evidence and parsing ad claims—before issuing untitled or warning letters. The new proposal would make some commonly cited violations explicit, speeding enforcement and increasing the risk of warnings or other FDA actions. At the same time, the FDA is now using AI and other tech-enabled tools to monitor and review D2C ads, increasing the volume of scrutiny.

The large outlay of the more than $33 billion the industry spends on advertising will have to be more closely audited.