Final answer:
A product's drug strength, quality, or purity differing from the label is described as misbranded or adulterated. This can impact the market due to asymmetric information where the buyer or seller has more information about the product than the other party.
Step-by-step explanation:
If a product's drug strength, quality, or purity of drug differs from that on the label, it is described as misbranded or adulterated. In terms of regulatory language used by the FDA, this constitutes a serious issue as it may lead to safety concerns or misinformation about the product.
When it comes to new drugs, they are under extensive scrutiny by the FDA, which includes evaluating their strength, quality, and purity, ensuring that drugs are "safe and effective when used as directed." For generic drugs, the FDA requires evidence that they are interchangeable with or therapeutically equivalent to the brand-name drug through an ANDA.
Adulteration or misbranding can occur due to various reasons, such as errors in manufacturing, violation of FDA regulations, or inconsistencies in labeling. These occurrences can lead to a lack of confidence in the market, which is often described as a situation of asymmetric information where sellers or buyers have more information than others about the product's quality.