Over-the-counter (OTC) companies may already be bracing for a significant legal storm as regulatory scrutiny intensifies and the market landscape shifts dramatically. Recent developments suggest that these companies face mounting challenges from regulatory agencies, legal disputes, and enforcement actions that could reshape how OTC products are marketed, sold, and regulated.
One major factor contributing to this brewing storm is the U.S. Food and Drug Administration’s (FDA) recent aggressive enforcement actions targeting pharmaceutical advertising and product marketing. In September 2025, the FDA’s Office of Prescription Drug Promotion issued an unprecedented number of untitled and warning letters—over 120 in just a few weeks—primarily aimed at compounding pharmacies and telehealth companies. These letters focused on misleading claims about compounded drugs and products lacking FDA approval, signaling a shift toward stricter oversight of direct-to-consumer advertising and marketing practices. This crackdown extends to human cell and tissue products and even artificial intelligence platforms used in promotional activities, indicating a broad and deep regulatory focus that could impact OTC companies relying on innovative marketing or product claims.
Legal disputes around drug pricing and distribution also add to the pressure. The 340B Drug Pricing Program, which allows certain hospitals and clinics to purchase outpatient drugs at discounted prices, has been a source of ongoing litigation. Manufacturers have challenged the program’s requirements, particularly regarding contract pharmacies, leading to court rulings that permit manufacturers to restrict drug distribution channels. Meanwhile, many states have enacted laws to protect contract pharmacies’ access to discounted drugs, creating a complex and sometimes conflicting legal environment. OTC companies involved in drug distribution or partnerships with healthcare providers must navigate this evolving regulatory and legal maze carefully.
Counterfeiting and online marketplace enforcement present another layer of risk. Reports have highlighted the presence of counterfeit OTC drugs on popular online platforms, undermining consumer safety and brand integrity. Some marketplaces have taken steps to delist counterfeit products, but enforcement remains inconsistent, and counterfeiters continue to exploit gaps in oversight. This ongoing issue exposes OTC companies to reputational damage, potential liability, and the need for enhanced anti-counterfeiting measures.
On the financial and compliance side, OTC companies face challenges related to securities regulation and market access. The patchwork of state Blue Sky laws governing secondary trading of OTC securities complicates compliance efforts. While progress has been made toward broader recognition of exemptions in many states, the lack of a unified federal standard creates regulatory friction and increases costs for OTC-traded companies. Calls for federal preemption to streamline complianc
