Here's a copy of a letter sent by the fda to a small business that carries herbal products. I copied it from one of the soap making forums that I am on, they were discussing the fda rules....

This is to advise you that the Food and Drug Administration (FDA)
has reviewed your web site at the Internet address:
http://www.brasseur.com and has determined that various products
being offered on this site are promoted for conditions that may
cause them to be drugs under section 201(g) of the Federal Food,
Drug, and Cosmetic Act (the Act) [21 USC 321(g)]. The products may
be considered drugs because the therapeutic claims as shown on your
web site establish their intended use as drugs.

Examples of some of the products and claims observed on your web
site include, in part:

Anti-Plague Syrup
"Plague," "helping the body's immune system fight off contagious
diseases, both viral and bacterial. Flu, bronchitis, pneumonia,
measles, chicken pox, mumps, etc."

Comfrey -Mullein-Garlic Syrup
"Asthmatic cough syrup...associated muscle spasm and tightness...sore
throats..."

Loquat Herbal Cough Syrup
"...coughs, colds, congestion, sore throat..."

Red Clover Combination
"chronic degenerative conditions"

VF Syrup
"Vermifuge formulated to kill and expel internal parasites."

Chickweed ointment
"Skin irritation and inflammation....itching symptoms of eczema,
psoriasis, hives, acne and insect bites...heat rash, burning genitals
and chicken pox."

Nose ointment
"...external antihistamine for nasal and sinus congestion."

Oil of Garlic
"Natural antibiotic for infections, earaches and sore throat. ...wart
removal."

Tel Fu essential oil
"Works faster than aspirin for headache pain, relieves pain..."

Seed-A-Sept Ear Drops
"All purpose ear cleanser...ear irritations...flus and colds, or
allergy, such conditions can cause extreme discomfort."

C-Licous
"...preventative for crib death or Sudden Infant Death Syndrome
(SIDS). ...treatment and prevention of the common cold."

MIDTRAC
"alternative to Prozac"

Furthermore, FDA has no information that your products are generally
recognized as safe and effective for the above referenced conditions
and therefore, they may also be Anew drugs@ under section 201 (p) of
the Act [21 USC 321(p)]. New drugs may not be legally marketed in
the U.S. without prior approval from FDA as described in section 505
(a) of the Act [21 USC 355(a)].

FDA approves new drugs on the basis of scientific data submitted by
a drug sponsor to demonstrate that the drug is safe and effective.
FDA is aware that Internet distributors may not know that the
products they offer are regulated as drugs or that these drugs are
not in compliance with the law. Many of these products may be
legally marketed as dietary supplements or as cosmetics if certain
therapeutic claims are removed from the promotional materials
and the products otherwise comply with all applicable provisions of
the Act and FDA regulations.

Under the Act, as amended by the Dietary Supplement Health and
Education Act (DSHEA), dietary supplements may be legally marketed
with claims that they are intended to affect the structure or
function of the body (structure/function claims) if certain
conditions are met. Claims that dietary supplements are
intended to prevent, diagnose, mitigate, treat, or cure disease
(disease claims) excepting health claims authorized for use by FDA,
may not be made as they cause the products to be drugs. The intended
use of a product may be established through product labels and
labeling, catalogs, brochures, audio and videotapes, Internet sites,
or other circumstances surrounding the distribution of the product.
FDA has published a Final Rule intended to clarify the distinction
between statements allowed as structure/function claims and those
that represent disease claims. This document is available on the
Internet at http://vm.cfsan.fda.gov/~lrd/fr000106.html.

In addition, only products that are intended for ingestion may be
lawfully marketed as dietary supplements. Topical products and
products intended to enter into the body directly through the skin
or mucosal tissues, such as transdermal or sublingual products, are
not dietary supplements. For these products, disease or
structure/function claims may cause them to be new drugs.

Additional information is available in Title 21, Code of Federal
Regulations, (21 CFR) Parts 310 and 330-358.
These parts include the Final Rules for various OTC ingredients or
products that may or may not be legally marketed without prior
approval.

This letter is not intended to be an all-inclusive review of your
web site and products your firm may market. It is your
responsibility to ensure that all products marketed by your firm are
in compliance with the Act and its implementing regulations.
If you need additional information or have questions concerning any
products distributed through your web site, please contact FDA.

You may reach FDA electronically (e-mail) at DAVISJ@CDER.FDA.GOV, or
you may respond in writing to Jan Davis, Compliance Officer, Food
and Drug Administration, HFD-314, 7520 Standish Place, Rockville, MD
20855 or by telephone at (301) 594-0070.

Sincerely yours,

/s/
David J. Horowitz, Esq.
Acting Director
Office of Compliance
Center for Drug Evaluation and Research
Food and Drug Administration