A practicing physician asks, and answers, the question:
The answer to this question begins with a little history. Our current regulation of drugs was established in 3 major pieces of legislation.[2,3] The Food, Drug & Cosmetic Act of 1938 required that the Food and Drug Administration approve all drugs used on humans. The legislation was concerned principally with making sure that drugs were safe and were accurately labeled. At the time, the distinction between OTC and prescription drugs was largely in the hands of the states. This changed in 1951 when the Durham-Humphrey amendments created federal criteria to distinguish OTC and prescription drugs. Prescription drugs were limited to those that were habit-forming and to those whose use required supervision by a licensed health practitioner. In 1962, the Kefauver-Harris amendments required that all drugs be not only safe, but also effective.
Thus, an OTC drug must satisfy 3 criteria: (1) it must be safe, (2) it must be effective, and (3) it must be for a condition that the patient can manage without supervision by a licensed health professional.