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Amazon is being threatened with legal action from the US medicines watchdog over the sales of “unapproved” drugs on its online site, as the tech giant faces scrutiny while seeking to break further into the $4tn American healthcare industry.
The Food and Drug Administration wrote to Amazon chief executive Andy Jassy in a letter this month complaining that drugs that supposedly treated molluscum contagiosum, a skin condition that causes lesions on the body, were being sold on Amazon.com.
The FDA said Amazon had distributed four such products “directly to individual US consumers on behalf of third [party sellers],” despite there being no legal over-the-counter drugs for a condition it said should not be self-diagnosed or treated.
The regulator also expressed concern that the drugs were being marketed for use by children, adding that Amazon must address the agency’s concerns or risk “legal action.”
The letter is at least the third warning sent to Amazon in the past 12 months over the sale of what the FDA said were unapproved drugs. The company also received complaints from the regulator in relation to mole and skin tag remover products and dietary supplements that contained an anti-inflammatory drug that was not listed on the product labels.
Amazon has been pushing into the US healthcare industry by launching online services such as video calls with doctors, and earlier this year closing a $3.9bn deal to acquire One Medical, a subscription-based healthcare provider. The multibillion-dollar over-the-counter drugs market represents another potentially ripe sector for expansion.
“Amazon wants to be involved in healthcare in a consumer-facing way in areas where consumers have choice,” said George Hill, a healthcare technology analyst at Deutsche Bank.
The FDA has also sent numerous warning letters over the past several years to third parties that sell on Amazon.com, as well as Amazon “Associates” — individuals who earn commissions on the sale of items they promote online — about product sales that the regulator said violated its rules.
JPMorgan said in a note last week that third parties were a key “driver” of Amazon’s growing share of the US ecommerce market, expanding faster than sales at Amazon’s own online stores.
Amazon said it required “all products offered in our store to comply with applicable laws, regulations and Amazon policies, and we develop innovative tools to prevent unsafe products from being listed.”
The company added: “We continuously monitor our store, and if we discover a product was undetected by our automated checks, we address the issue immediately and refine our controls.”
Amazon is not the only sprawling marketplace having to police the potential problems caused by the millions of sellers that use its online platform.
The Financial Times this year identified numerous TikTok users selling products that violated the group’s parent company ByteDance’s guidelines, including weight loss tea and prescription drugs.
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