Gwen Hodges, PhD and Bill Hambridge, MD have just introduced into the US market a drug, NoDrip, already FDA-approved for allergies, available by prescription only, for which they have a new indication: for treating asthma (a breathing disorder characterized by a reduced inability to breath air into the lungs and fully exhale due to inflammation of bronchial cells). Both scientists had worked for a research-based pharmaceutical company for 30 years, know how to create, manufacture (in small batches), develop, and market pharmaceuticals. Over their 30 years, they became frustrated many times with the FDA regulatory process to get novel therapies to the market. They both left their pharmaceutical company 3 years ago to start their own company and develop this new asthma indication that Gwen had been working on independently and privately the last 10 years. They acquired NoDrip from an overseas company which was also frustrated with the overly burdensome FDA regulations. They decided the medicine was too important to go through all of the FDA regulatory hurdles, so they found like-minded scientists at universities do clinical trial and paid them greater than fair market value because Bill thought the physicians deserved it. The results showed the drug works to reduce the severity of asthma attacks. Bill fancies himself as a marketer and decided to be the commercial lead. Bill and Gwen are the only employees and they want it to be that way. Bill has friends who are pulmonologists (physicians who specialize in lung diseases and disorders). He advertised NoDrip in emails to pulmonologists, (e.g. "NoDrip improves asthma symptoms by 80%," but did not provide supporting data for the claim) and began selling their new medicine by having the pulmonologists prescribe it - the prescriptions are then emailed to Bill who then mails the medicine to the patient's home. The pulmonologists don't get the patient's permission to email the patient's prescription to Bill, nor do they tell the patients that Bill is not a health care provider. Bill's email server has no security software on it and has been hacked multiple times. The patient pays Bill by credit card - the price is affordable so that many patients don't require insurance assistance. Bill also tells pulmonologists that the medicine may be good for warts too and pays them $10 for each prescription he receives, regardless of indication. Many of the patients are elderly, covered by Medicare, and have sought reimbursement for NoDrip from Medicare. Further, many patients have experienced gnashing of teeth and have consulted a lawyer. Nothing in the NoDrip allergy package insert safety sections discusses gnashing of teeth. Calls from patients about gnashing of teeth have not been acted upon by Bill and Gwen.

You are a Department of Justice attorney. You just received a call from an FDA attorney regarding NoDrip. Please identify each issue you see in this fact pattern that both you and the FDA would be concerned about - spot the issue and explain what law, if any, Gwen and Bill may be or are breaking. Mention all possible penalties they may be subject to if they have violated any laws.