It's due to a bill signed by that great believer in freedom, George W. Bush, in 2006. Many state governments, including Indiana's, followed suit with their own laws. The government's stated goal is to prevent people from buying "too much" pseudoephedrine and using it to create methamphetamine. But, as with most things government does, the government focuses on one goal and shows little concern for all of the other unintended, but totally predictable, consequences. Indeed, the best examples of negative externalities are those due to government regulation. The example of the Indiana woman is one.
I had always thought that when I used my driver's license to purchase Sudafed, the pharmacist would warn me and refuse to sell if I hit my limit. Wrong! That applies only if I buy at the same pharmacy each time or if I buy only from pharmacies that have linked data bases.
The government is pretty nasty about this. (Pardon the redundancy in that last sentence.) It turns out that you are responsible for keeping track of how much you buy and making sure it doesn't exceed the limits that the government, as our protector, has set.