Preemption Argument In Drug/Cosmetic Dispute Likely Falls Short Of Supreme Court

Federal law does not preempt Allergan's suit alleging Athena Cosmetics' RevitaLash competes unfairly against the drug firm's Latisse treatment in California, according to a Supreme Court brief filed by Solicitor General Donald Verrilli. Athena argues the absence of FDA action against its eyelash enhancers signals that its cosmetic positioning is lawful.

Lack of FDA enforcement does not mean the agency considers drug-like products marketed as cosmetics to be compliant or shield manufacturers from state laws, suggests Solicitor General Donald Verrilli in an amicus curiae brief to the Supreme Court.

The solicitor general's opinion submitted May 26 could signal an end to [Athena Cosmetics Inc.]’s appeal of lower courts’ rulingsinlitigation brought byAllergan Inc.thateffectively barred Athena from selling its Revitalash Advanced Eyelash Conditioner in California, where the dispute has its basis.

"There is no split of authority on whether suits under state law to restrain the sale of unapproved drugs are preempted" by the Food, Drug and Cosmetics Act, Verrilli said. Further review is unwarranted, he added.

The Ventura, Calif., cosmetics company petitioned the Supreme Court to review the U.S. Court of Appeals for the Federal Circuit’s decision that said its products are unapproved drugs that compete unfairly against Allergan's Latisse treatment for "inadequate" eyelashes.

Maintaining that FDA should determine whether cosmetics overstep regulatory boundaries defined by the FD&C Act, Athena says the absence of enforcement action against Revitalash signals that the agency considers the product a lawfully marketed cosmetic (Also see "Supreme Court Asked To Consider Pre-emption In Drug Vs. Cosmetic Litigation" - Pink Sheet, 5 Jan, 2015.).

"Who should decide … whether products in interstate commerce are drugs or cosmetics – FDA, or judges and juries acting under state law?” Athena queried in its request for a writ of certiorari, which would refer the lower court record to the Supreme Court for review.

"The case is already being cited by class-action attorneys in California for their ability to sue manufacturers of products that they think cross the line between cosmetics and drugs. They think this opens the door for more class actions over cosmetic products." – Arnold & Porter attorney Trent Norris

In determining whether to hear the case, the Supreme Court asked for the solicitor general’s opinion. Amicus curiae briefs from the solicitor general, filed when the federal government has an interest in an issue, can heavily influence the high court's decision to grant a review (Also see "Industry Roundup: Nutrilite, No-GMO Similac, Supreme Court, Herbalife VPs" - Pink Sheet, 27 May, 2015.).

And Athena Cosmetics’ case does not appear likely to reach the Supreme Court, said Trent Norris, a partner in Arnold & Porter's San Francisco office.

"Without the Solicitor General’s recommendation, chances that the Supreme Court will take up this [Allergan v. Athena] case approach zero," he said.

With defendants in a growing number of lawsuits, including numerous consumer class actions, citing FDA's primary jurisdiction in matters of cosmetics law, the Supreme Court decision on Athena's petition could have significant implications for industry as a whole.

Prostaglandin Use Flags Products As Drugs

Athena is one of the rare cosmetics firms that continue marketing eyelash enhancement products with prostaglandin analogs to promote eyelash growth.

Revitalash products have not contained one of those ingredients, bimatoprost – the active ingredient in Allergan's Latisse drug – since their earliest iterations. However, Athena has incorporated other prostaglandin analogs in subsequent generations of products, staying ahead of FDA action against the hormone-like substances by jumping from one to the next, as noted in Verrilli's brief.

FDA enforcement measures included a 2007 seizure of products marketed by [Jan Marini Skin Research Inc.] due to bimatoprost use, as well as a 2011 warning letter to [Lifetech Resources LLC] for use of a related ingredient (Also see "FDA’s Warning To Lash-Growth Firm Shows Risks In Third-Party Claims" - HBW Insight, 2 May, 2011.).

In its warning to Lifetech, FDA noted the isopropyl cloprostenate in the company's RapidLash, NeuLash and NeuveauBrow products at that time belonged to a class of prostaglandin analogs that "are well known to have an effect on the structure or function of the body."

Over the years, Athena swapped out the targeted prostaglandin analogs with variants and managed to steer clear of FDA while revising its product claims to deemphasize eyelash growth or stimulation, instead casting its offerings as conditioners that "enhance the look of luxurious eyelashes," among other promises couched in fairly typical cosmetics language to designate their intended use as beautification.

Athena might have eluded FDA with the maneuvering, but not Allergan. The drug firm is active in enforcing its patents and protecting its competitive interests, arguing in suits against Athena and other cosmetics firms that cosmetic eyelash enhancers containing prostaglandin analogs are in reality unapproved drugs.

Those offerings compete unfairly against Athena's Latisse treatment because they do not require prescriptions for use and the marketers do not incur the costs of drug approval, Allergan says.

Litigation Deemed Supplemental To FDA Enforcement

Lower courts largely have sided with the drug firm in the Athena case, determining that Athena's marketing claims "invariably link eyelash appearance to physical changes caused by the products at issue" and identifying its RevitaLash products as drugs.

Decisions have cited a 1989 FDA rule specifying that OTC "hair growers" or hair-loss-prevention drug products for external use are not generally recognized as safe and effective and are misbranded without a new drug approval.

California food and drug law incorporates that classification of hair-growth products, prohibiting the sale or delivery of those and other new drugs that have not been approved by FDA, the courts maintain.

Athena's primary jurisdiction and preemption arguments, based on its contention that FDA should be responsible for enforcing the FDCA, have largely fallen on deaf ears.

"The implication is that suits like Allergan’s are a useful supplement to FDA's regulatory scrutiny." Coats and Bennett associate James Lawrence blog post

In the brief, the solicitor general similarly rejects the argument that lower court decisions have posed a conflict with federal law by enforcing the FD&C Act differently from FDA's stance on Athena's products.

“No conflict with a supposed FDA position on RevitaLash can be inferred from the absence of FDA enforcement or other regulatory action against petitioner or its products. Such inaction does not equate to an affirmative FDA decision that RevitaLash is not a new drug,” Verrilli says.

He generally agrees with the appellate court's position that Allergan's claims and the lower court rulings do not "intrude upon FDA's discretionary authority to enforce the” FD&CA, “and that the California Health and Safety Code "is not an obstacle to realizing federal objectives," but rather "parallel[s] the FDCA, such that the statutes have consistent goals."

Arnold & Porter's Norris offered perspective: “What the solicitor general endorses is a system where FDA sets rules of the road but these rules can be enforced by other entities under state law. Just because FDA hasn't gone after Athena doesn't mean FDA thinks it's okay.”

Verrilli notes that federal courts have recognized that FDA has limited resources to monitor the myriad approved drugs on the market, let alone "the vast marketplace of consumer products that have never been submitted to FDA for pre-market review."

In his brief, he cites a 2011 FDA guidance Marketed Unapproved Drugs - Compliance Policy Guide which discusses how the agency deals with the estimated several thousand drug products marketed illegally without FDA approval, largely due to historical rulemaking reasons.

The agency notes that it has taken a risk-based approach in this dimension, prioritizing enforcement "according to potential public health concerns or other impacts on the public health."

In a June 2 blog post, Coats and Bennett PLLC associate James Lawrence interprets the solicitor general's brief along the same lines. "The implication is that suits like Allergan’s are a useful supplement to FDA's regulatory scrutiny," he says.

Case Could Set Industry Precedent

The Supreme Court will decide officially whether to grant or deny Athena's petition at an upcoming conference. The case's uptake depends on four of nine Justices voting in favor of its acceptance.

If the court follows Verrilli's recommendation, which it usually does, the lower court’s decision stands and Athena will be enjoined from selling RevitaLash products in California due to violation of the state's Unfair Competition Law.

Athena's website notes the product is not available in California, which has been the status quo since early 2014 (Also see "In Brief: Coty Eyes OPI Growth; RevitaLash Is Back; Garnier Pulled From China" - HBW Insight, 13 Jan, 2014.).

For the rest of industry, “the bigger picture is that cosmetics manufacturers have to deal with state laws," Norris said. "It's just the latest example of why you have to pay attention to what's going on at the state level and can't count on preemption.”

Norris suggested similar litigations will continue in other circuits, and this case may serve as precedent.

“The case is already being cited by class-action attorneys in California for their ability to sue manufacturers of products that they think cross the line between cosmetics and drugs. They think this opens the door for more class actions over cosmetic products."

(This article also was published in “The Rose Sheet”.)