Amazon Under Scrutiny: FDA Highlights Unapproved Drug Sales, Third Strike in a Year

The U.S. Food and Drug Administration (FDA) slammed Amazon.Com, Inc AMZN for listing "unauthorized" drugs on its platform. 

In a letter to CEO Andy Jassy, the FDA highlighted the sale of medications to treat molluscum contagiosum, a skin lesion-causing condition. 

The FDA identified Amazon's distribution of four such products via third-party sellers despite no sanctioned over-the-counter treatments for this condition, the Financial Times reports.

Furthermore, the FDA raised issues about promoting these drugs for children. This incident is the third time the FDA has warned Amazon about unauthorized drug sales in a year. 

Amazon's past grievances include selling mole and skin tag removal solutions and dietary supplements with undisclosed anti-inflammatory drugs.

Amazon ventured into the U.S. healthcare sector with offerings like virtual doctor consultations and the acquisition of One Medical in 2023, eyeing the lucrative over-the-counter drug market. 

Over the years, the FDA has frequently warned third-party sellers on Amazon. 

JPMorgan highlighted the significant role of these third parties in boosting Amazon's U.S. e-commerce market share, indicating they grow faster than Amazon's direct sales. 

Meanwhile, the Financial Times discovered several TikTok users marketing products that breach the policies set by its parent company, ByteDance, such as weight loss teas and prescription medications.

Amazon is amid multiple initiatives, including designing custom microchips for AWS' generative AI training, enhancing Buy Now, Pay Later (BNPL) offerings, logistics and delivery mechanism restructuring, and a grocery business overhaul to drive shareholder value.

Price Action: AMZN shares traded higher by 0.04% at $134.98 premarket on the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.