The U.S. Department of Health and Human Services (HHS) will not take action against licensed pharmacists who dispense certain unapproved peptides to consumers, according to a new policy published Oct. 28 in the Federal Register.  

Peptides are short chains of amino acids that people inject into their bodies. HHS Secretary Robert F. Kennedy Jr. has said in the past that he is a “big fan” of the unapproved drugs, whose benefits are largely scientifically unproven. 

The U.S. Food and Drug Administration (FDA) essentially banned peptides in 2023 because of safety concerns. But an FDA committee met in July to review the evidence on peptides and recommend whether or not to take the highly unusual step of allowing pharmacies to dispense them absent scientific review. The committee was made up of new appointees who consulted with or were employed by companies that were interested in promoting or dispensing peptides; it recommended allowing specialty pharmacies to dispense six peptides, despite FDA staff advising against the move. 

The new policy—which was signed by Kennedy—says that after the July meetings, HHS believed there was “significant interest” in the use of obtaining these peptides from compounding pharmacies. “Therefore, to expand and improve patient access, HHS does not intend to take enforcement action against a State-licensed pharmacy, Federal facility, or licensed physician compounding a drug product using a peptide bulk drug substance found in Appendix A,” the notice said. The policy said that it was going to be published in the Federal Register on Oct. 30. The peptides listed in Appendix A were BPC-157, Epitalon, KPV, MOTS-c, Semax, and TB-500—the same ones the committee recommended allowing this summer.

A separate document posted on the HHS website says that after reviewing the recommendations of the committee that met in July, “the Secretary has determined that the policy advances patient choice and freedom while appropriately protecting patient safety.” 

The decision to allow the compounding of peptides is a boon for companies like Hims & Hers, which had reportedly been preparing to offer peptides in 2026. Analysts have said the market for peptides could be as high as $3.3 billion. Hims stock shot up 5% after the Oct. 28 announcement.

The move “represents a vital step toward eliminating the unsafe gray and black markets, restoring safe patient access through legitimate, physician-supervised care,” said Lee Rosebush, chair of the American Academy of Peptide Medicine, a new advocacy group, in a statement. 

Other public-health professionals raised alarm about the decision, which they say allows compounding pharmacies to dispense these medications absent scientific evidence. “American consumers should not be treated like guinea pigs,” said Fred Mills, chief policy officer for Americans for Safe and Effective Medicines, in a statement. “It is possible to advance both patient safety and access to legitimate medicines, but this is not it.”  

At the July hearings, consumer advocacy groups including the Center for Science in the Public Interest had argued that allowing peptides to skip a rigorous evidence-based FDA approval process would be unprecedented and dangerous to consumers.

Many physicians have spoken up against allowing peptides to be compounded. “The peptides under consideration here are untested and poorly characterized experimental drugs that should not be allowed in compounded products,” said Dr. Adriane Fugh-Berman, a professor of pharmacology and physiology at Georgetown University Medical Center, at the public comment portion of the July meeting, reminding the committee that two women had required emergency treatment after receiving peptides at a Las Vegas festival. 

Critics also expressed concern that people were turning to compounding pharmacies for untested drugs. Compounding pharmacies are often used to fill specific prescriptions from a doctor, but in recent years, they have mass-produced drugs like GLP-1s for patients looking to save money. The peptide boom will put even more pressure on compounding pharmacies to quickly make drugs for telehealth sites, said Annie Lambert, a pharmacist and clinical program manager for compliance solutions at Wolters Kluwer Health.

"Compounding can and should play a legitimate clinical role, from hospitals to home infusion to filling gaps during drug shortages. But it is not a substitute for FDA-approved manufacturing, and that distinction is where a lot of today's risk sits,” she said in a statement. “My concern is that pharmacies rushing into this space will move to make a dollar faster rather than make sure they meet every requirement, from ingredient sourcing and facilities to staff training and sterility testing.”

Shortly after the new notice was published, a number of telehealth websites were already marketing the six peptides, each for a price of anywhere from $199 to $249 a month. 

Amber Kostka, who owns The Stockpot restaurant in Hampton Roads, Va., says she has tried to do right by her employees by offering them health insurance, alongside good wages and a 401k. 

But as costs have risen—premiums have roughly tripled since the company first started offering health insurance in 2018—her employees are increasingly telling her they can’t afford health insurance. That’s even though she splits the cost of premiums with employees, which are roughly $400 a month. 

Instead, employees are dropping out of the plan and going uninsured, she says. About 35% of her eligible employees now buy the employer-sponsored health insurance, she says, down from 50% prior to COVID. She wants to warn them about the risks of going without insurance, she says, but also knows their finances are extremely tight. “It’s just a cost thing, at the end of the day,” she says. “You can’t stop paying for groceries.” 

Her employees aren’t alone. The share of working-age U.S. adults without health insurance rose to 11.2% in 2026, up from 8.9% in 2024, according to new research from the Commonwealth Fund. People don’t have health insurance because the costs of everything—including gasoline, housing, and food—are rising, and they’re deciding they can’t afford to pay for even employer-sponsored plans like Kostka’s. “The whole system just seems like a complete gamble with people’s lives,” she says. 

Some people are looking at the price of plans on the Affordable Care Act marketplace and deciding they can’t afford health insurance. Premiums on the ACA marketplaces increased by an average of 58% in 2026 after Congress decided last year not to renew expiring subsidies. 

Ironically, these uninsured Americans may be helping drive the cost of health care even higher, fueling a cycle in which health insurance gets more expensive, forcing more people to drop coverage. As hospitals field more uninsured patients, they have to pass the costs of uncompensated care onto someone. “When providers have to provide a lot of uncompensated care, how do they make themselves whole? They raise prices,” says Beth Umland, director of employer research for Marsh, the health benefits consultant company formerly known as Mercer.

Of course, having more uninsured Americans isn’t the only reason costs are rising. A Marsh survey of employers recently found that they expected total health benefit costs per employee to rise 8.2% in 2027, the highest increase since 2003. One reason was that the consolidation of health systems was leading to higher prices, as some systems had monopolies in certain markets. Another was that lower government spending for public health programs was leading to higher costs for private sector plans.

“This is starting to feel—’unsustainable’ is the word you hear,” she says.

Many of the reasons why health care costs are rising may seem minimal until you start adding them up, Umland says. For example, more doctors are using AI scribes in care, which are helping them bill for more services, making care more expensive, she says. A clause of the No Surprises Act, which was passed by Congress in 2020 to protect patients from surprise medical bills but which allows disputes to be settled by arbitration, has also added billions to costs, she says. 

There are also increasingly more treatments available for patients, and those treatments are more expensive than the ones they’re replacing, she says. One example: GLP-1s, which may save insurers money in the long run on health costs but which are expensive upfront. “That’s just a whole new category of expense that didn’t exist before,” she says. 

In its survey, Marsh found that many employers were planning to pass costs onto employees after years of trying not to do so. 

Overall, workers are paying on average about $7,471 annually towards premiums for employer-sponsored family health benefits this year, up 9% from 2025, according to a new employer health benefits survey from KFF. Workers at small firms with less than 200 employees—like Kostka’s—are especially hard hit, paying about $9,687 towards family coverage: $2,847 more than workers in larger firms. 

And even as they pay more for health care, the plans available to them are getting costlier to use. The average deductible for employer sponsored plans has increased 34% over the last 10 years, according to KFF. 

What employers are doing

Kostka says there have recently been fewer health insurers in her area to choose from. Two years ago, she switched from just buying insurance outright for her employees, which many small businesses do, to self-funding the plan. She was able to do this because her employees are relatively young and healthy, she says, making her risk of incurring big medical costs for cancer or a catastrophic illness relatively low. 

But she knows she’s just a major diagnosis away from being dropped from the self-funded plan, she says. “It’s a little bit of a gamble right now,” she says. 

There are some things employers can do to push back against high health care costs, says Jim Winkler, chief strategy of the Business Group on Health, which published its own recent survey of employers which projected health care costs to rise 9% in 2027, the highest forecast the group has ever recorded.

Some employers are dropping coverage for GLP-1s for weight loss to save money, he says. Others are trying to drive employees toward what are called Centers of Excellence—essentially hospitals or medical practices with high ratings that may save money in the long-term since employees won’t need to return again and again for care. Some employers are also telling employees to try to find cheap, legitimate medications where they can—from sites like GoodRx, for example—and reimbursing them, rather than getting medications from a pharmacy benefit manager.

“We’re just painting a really challenging picture for health care costs,” he says, “which leads employers down the path of needing to find things to do to take action to mitigate them.”

A small number of employers are deciding not to offer health care at all and are instead offering employees cash to buy their own plans through the ACA marketplace. This option, called an ICHRA (Individual Coverage Health Reimbursement Arrangement) is pushed by Republicans, Winkler says, and was introduced during the first Trump Administration. 

Small employers, though, often can only choose from available plans, and if there aren’t many, they don’t have much room to negotiate. 

It’s a problem facing Mas Torito, owner of Kokoro restaurant in Denver. He spent close to $150,000 in premium payments for his employees in 2025 and is on track to spend $200,000 in 2026. That’s about 2.7% of revenues; most restaurants only have margins of 2-3%. 

“Really since COVID, every single year feels like there are these extra pressures on us,” he says.

Kokoro has been in business for 40 years, and some of Torito’s employees have been working at the restaurant the whole time. He suspects that having an older pool of employees is part of what’s driving his health care costs up every year. 

“I think they see the number of claims and costs every year going up,” he says, “and that translates into higher premiums.”

Like Kostka, Torito is committed to offering health insurance for his employees, even as his own costs rise. And like Kostka, he’s hearing from more employees that they can’t afford it. Now, only about 40% of his employees buy the insurance, he says. 

“I get it,” he says. “The deductible keeps going up every year, the insurance keeps going up. It’s enough where people are really thinking, ‘Hey, do I want insurance or not?’”