The snake-oil part is solved by prohibiting scientifically unproven claims. Laudanum was sold as a cure-all; obviously as a society we don't want to allow opiates to be marketed for everything from allopecia to zika.

Mexico's pharma industry works like this to some extent. You can walk into a .mx pharmacy and get yourself antibiotics, boner pills, a CPAP machine, hormonal birth control, and much much more without a doctor's note. Purity doesn't seem to be a big problem; you generally don't have to worry that it might be 10% opium or whatever. International travelers can bring up to 3 months' personal supply back to the U.S., which would be tricky if border officials' drug-sniffing dogs routinely flagged contaminant drugs of concern in medication inspections.