Why do medications have expiration dates?

Over time, the chemicals in medications oxidize or otherwise break down. In a few medications, this can happen very rapidly and they usually need to be refrigerated. They don't become toxic, but they do work less effectively.

However, in the vast majority of drugs, the break down is so slow that "expired" medications are perfectly good, although slightly less potent. In fact, sometimes such drugs are donated overseas in large batches. I hate to say it, but expiration dates mostly just ensure that drug companies sell more drugs. Remember when ink jet printer cartridges started having expiration dates? Same principle.