The US FDA (food and drug administration) has a long and somewhat checkered history. This bureau evolved out of efforts to protect the public from manufacturing processes in the food, drug, pesticide, etc industries that were clear and present dangers.
For example, in 1937, sulfanilimide (one of the earliest antibiotics) was sold in a form where an extremely toxic (and tasty) solvent was used - diethylene glycol (an antifreeze analogue). Over 100 persons died from this. Most of us read Upton Sinclair's rather graphic novel The Jungle that described truly atrocious slaughterhouse conditions. (Lest we forget, Mr. Sinclair was not only a notorious muckraker, he was also a proponent of free love and other rather radical social proposals. But I do believe that many of the conditions he described did in fact exist). Home remedies and patent medicines abounded, some with well known and effective botanical ingredients (Lydia Pinkham's formula actually did include cohosh, chasteberry, and other herbs still used for 'women's conditions) but were usually also laced with a substantial quantity of alcohol ( especially during prohibition!) and/or various poppy seedpod extractives. Laudanum, paregoric, elixir of terpin hydrate with codeine, cheracol codeine - all were readily available at one time. Elixir of coca leaves was also not too hard to find. It wasn't until 1914 that prescriptions were required for narcotics (and then not for all narcotics).
(From the FDA's official history)
FDR signed the Food, Drug, and Cosmetic Act on 25 June 1938.
The new law brought cosmetics and medical devices under control, and it required that drugs be labeled with adequate directions for safe use. Moreover, it mandated pre-market approval of all new drugs, such that a manufacturer would have to prove to FDA that a drug were safe before it could be sold. It irrefutably prohibited false therapeutic claims for drugs, although a separate law granted the Federal Trade Commission jurisdiction over drug advertising. The act also corrected abuses in food packaging and quality, and it mandated legally enforceable food standards. Tolerances for certain poisonous substances were addressed. The law formally authorized factory inspections, and it added injunctions to the enforcement tools at the agency's disposal.
Note that the 1938 law did not retroactively assess for safety or efficacy. Also, and it wasn't until 1951 that there was a strict definition of non-narcotic drugs that were risky enough to require a prescription before dispensing.
There has always been a dynamic tension between the FDA and the industry it regulates. There is also the pressure upon both groups, from the medication consuming public and from the legislators that attempt to meet the needs both of that public and of the well-financed pharmaceutical manufacturers. It generally takes some kind of public health disaster to change that balance of power.
One such disaster, widely recognized as pivotal, was the Thalidomide story . Dr. Frances Kelsey has acquired almost mythological stature as the person who, single handedly, kept Thalidomide from being approved for sale in the USA. She exceeded her authority, and actually was ultimately successful through using a variety of stalling techniques until the evidence from Europe and Japan was overwhelming that this drug caused serious and permanent birth defects in babies whose moms took it between the 34th day (after the last menstruation) and day 49. Here was a drug whose side effects were visible, critical, and horrifying. Horrified, the US Congress passed a law, one that is still in effect and still controversial. According to the FDA's official history
1962 The KEFAUVER-HARRIS DRUG AMENDMENTS passed to ensure drug efficacy and greater drug safety. For the first time, drug manufacturers are required to prove to FDA the effectiveness of their products before marketing them.