On July 27, 2012, the California Department of Toxic Substances Control (DTSC) issued the fourth iteration of its Safer Consumer Products draft regulations. These stringent regulations, implementing California’s Green Chemistry program, have a broad reach and impact across the industrial spectrum. Although concern is widespread across industries that make consumer products sold in California, the pharmaceutical industry is largely missing from the dialog. On first blush, the regulations, like the federal Toxic Substance Control Act (TSCA), appear to exempt drug, devices and food—products regulated by the United States Food and Drug Administration (FDA). However, the regulations only exempt “dangerous drugs,” a term defined to include prescription (Rx) drugs, but not over-the-counter (OTC) drugs.1 Therefore, the entire gamut of OTC drug products and their packaging—from aspirin to sunscreen—is susceptible to regulation. Although the pharmaceutical industry has a strong argument that the Safer Consumer Product regulations, as they apply to OTC drugs, are preempted by FDA regulations, it should act quickly to raise these concerns by October 11, 2012, the close of the public comment period.

The Requirements of the Safer Consumer Products Draft Regulations

California’s Safer Consumer Products regulations address all consumer products sold in California that contain a “Chemical of Concern.” There are currently over a thousand “Chemicals of Concern” on the California list, and an initial review of the list includes more than 25 chemicals used in OTC drugs. Additional chemicals may be added at any time by DTSC, including through a citizen petition process. The “Chemicals of Concern” list is problematic for OTC drug manufacturers if these chemicals are present in an OTC drug in a concentration greater than the “alternative analysis threshold” specified by DTSC for that “Chemical of Concern.” DTSC intends to set this threshold on a case-by-case basis for each product in the future, but it is likely to be below 0.01 percent and perhaps as low as the minimum concentration detectable by available laboratory equipment. For comparison, the widely accepted global standard today for triggering chemical regulatory requirements is 0.10 percent. This threshold is of great concern for the pharmaceutical industry, as a concentration over 0.01 percent of a chemical is often necessary for the efficacy of an OTC drug. For example, aspirin, a chemical included on the initial “Chemicals of Concern” list, is available in a 325mg tablet, at a concentration of 85.98 percent.

The regulations require DTSC to evaluate and prioritize products containing a “Chemical of Concern” based on vague criteria concerning “safety” and “exposure” and develop a list of “Priority Products” for which the responsible party (usually the manufacturer) must conduct a life-cycle-based “Alternative Assessment” (AA) to determine how to design the product without using the “Chemical of Concern.” The cost of conducting an AA could range from $500,000 to $6 million to obtain information from a global supply chain and to conduct the analysis (and potential fees paid to DTSC to conduct review). Based upon DTSC and public review of the AA, a manufacturer could be subject to a California government-mandated redesign of the product to replace the “Chemical of Concern” with what DTSC considers to be a “safer” chemical. Designing an OTC drug without a “Chemical of Concern” will be impossible for products where—as in the case of aspirin—the “Chemical of Concern” is the active pharmaceutical ingredient (API).

In addition to the AA and redesign requirements, manufacturers of products sold in California may be required, at the sole discretion of DTSC, to provide to that agency, for public review, data on the “toxicity” characteristics of the product. This data will be based on newly created California “hazard traits,” many of which are not considered to be “hazards” anywhere else, have no known test methods to measure “hazards” and are inconsistent with recognized global hazard trait standards. DTSC may use this data to expand both the list of “Chemicals of Concern” and the list of “Priority Products.” The cost of this toxicity review could cost from $5,000 to $100,000 (depending upon availability and cost of the test method) to test for 40-plus hazard traits for chemical ingredients, retool lab equipment to meet a 0.01 percent threshold and to hire third-party labs. As a result of this analysis, DTSC may implement labeling requirements, such as requiring that a product be labeled as “hazardous.” Although FDA strictly regulates the labeling of OTC drugs, DTSC will have the authority, under the Safer Consumer Product regulations, to impose an additional labeling requirement on OTC drug products. A label of “hazardous” on an OTC drug will drive consumers away from the drug and damage the reputation of the drug manufacturer.

The FDA Regulatory Scheme

FDA regulation of OTC drugs entails consideration of human health effects and environmental impacts. There are two regulatory pathways that ensure the safety of the chemicals used in an OTC drug. OTC drugs are either approved through a new drug application (NDA)2 or must conform to a drug monograph issued by FDA. Through the NDA process, FDA approves a drug if and only if it is shown to be safe and effective. FDA permits an Rx-to-OTC switch if there is a long history of safe use, a prescription is no longer necessary to ensure safe use and it is in the public interest to increase access at a lower cost. Yet, as discussed above, California’s Safer Consumer Products regulations can tack additional cost and regulatory burdens onto the OTC product, which would increase costs and may decrease availability. Similarly, drug monographs outline detailed conditions to which the OTC drug product must conform in order to be legally marketed. The use of active ingredients is specified in the monograph by dosage strength and dosage form. The active ingredient in a drug monograph has been extensively assessed by FDA for human health effects, for purposes of both safety and efficacy. Through this assessment, FDA has determined what level of chemical is not hazardous and acceptable for use—i.e. conditions under which an OTC ingredient is Generally Recognized As Safe and Effective (GRASE). The monographs contain specific requirements regarding permissible active ingredients, dosage, strength directions for use, claims, warnings and precautions. The entire OTC monograph development and assessment process is conducted by FDA through public, notice-and-comment rulemaking, based upon recommendations by expert advisory panels.

Federal Preemption of the Safer Consumer Products Regulation as to OTC Drugs

The Safer Consumer Products regulations are largely duplicative of FDA’s regulation of OTC drugs. Although the Safer Consumer Products regulations do permit DTSC to grant a regulatory exemption from a requirement if it is in conflict with a federal regulatory program, such that the responsible entity could not reasonably be expected to comply with both, there is no guarantee that DTSC would do so for OTC drug products. Moreover, the burden should not be on industry to resolve conflicts and overlap between regulatory regimes. To obviate the need for a DTSC regulatory exemption, the pharmaceutical industry needs to take an active role during the notice and comment period and demonstrate to DTSC that its proposed regulation of OTC drugs is preempted by the federal Food, Drug and Cosmetic Act (FDCA) and FDA regulation of OTC drugs.

The FDCA, the FDA’s NDA process and drug monograph requirements likely preempt the Safer Consumer Product regulations as they relate to OTC drug products. Section 751 of the FDCA expressly preempts states from imposing additional regulation on OTC drugs:

no State may establish . . . any requirement (1) that relates to the regulation of a [nonprescription] drug . . . ; and (2) that is different from or in addition to, or that is otherwise not identical with, a requirement under this chapter . . . .3

In this regard, the statute dictates that “a requirement that relates to the regulation of a drug shall be deemed to include any requirement relating to public information or any other form of public communication relating to a warning of any kind for a drug.”4 Courts have held that federal laws preempt conflicting state laws when it is the “clear and manifest purpose of Congress to do so.”5 An express preemption provision, such as Section 751, is direct evidence of congressional intent to preempt state law.6 The Safer Consumer Product regulations, as they relate to OTC drugs, are different from, and in addition to, the FDA regulations of OTC drugs. Therefore, they would be preempted by the FDCA.7

It is important to note that California courts have recognized the preemptive effect of the FDCA, the NDA process and the OTC monograph requirements with respect to the labeling of OTC drug products. In Kanter v. Warner-Lambert Co.,8 a California Court of Appeals held that the FDA’s NDA process relating to product labeling is a preemptive federal requirement. That regulation is specific because it requires that proposed labeling be submitted to the FDA, that the labeling complies with FDA regulations and that the labeled drug is safe and effective.9 Kanter also held that the FDA’s OTC drug monograph system relating to product labeling can be a preemptive federal requirement, even though it does not require each manufacturer to submit its label to the FDA.10 Monographs set forth explicit and detailed requirements for labeling and thus preempt state law claims that would impose different or contradictory labeling.11 If DTSC were to require an OTC drug product to be labeled as “hazardous,” this requirement would likely be preempted by the applicable NDA labeling review process and/or the labeling regulations in the drug monograph. Such a “hazardous” label would also be preempted as a “requirement relating to public information or any other form of public communication relating to a warning of any kind for a drug.”12

Additionally, FDA can require an environmental assessment for any OTC drug, unless the drug is categorically exempt. Categorical exclusions ordinarily only exist for classes of actions that do not significantly affect the quality of the human environment.13 Environmental assessments are part of the FDA’s implementation of the National Environmental Policy Act (NEPA), which “ensure[s] responsible stewardship of the environment for present and future generations.”14 An environmental assessment enables the FDA to determine “whether the proposed action may significantly affect the quality of the human environment.”15 An environmental assessment focuses on the use and disposal from use of FDA-regulated articles16 and includes environmentally preferable alternatives to an action with adverse environmental impacts.17 The FDA uses an environmental assessment to determine whether to prepare an environmental impact statement (EIS).18 An EIS describes “(1) The environmental impacts of a proposed action; (2) Any adverse effects that cannot be avoided if the action is implemented; (3) Alternatives to the action; (4) The relationship between local short-term uses of the environment and the maintenance and enhancement of long-term productivity; and (5) Any irreversible and irretrievable commitments of resources that would be involved in the proposed action should it be implemented.”19 Like the AA requirements of the Safer Consumer Products regulations, both an environmental assessment and an EIS involve an alternative assessment of a drug product. However, all three alternative assessment requirements are different. The requirement to conduct an AA would be a requirement different from, or in addition to, any FDA requirement to conduct an EA or EIS with respect to an OTC drug product and, thus, likely preempted under the FDCA.20


In sum, California’s Safer Consumer Products regulations could impose significant financial costs and other related regulatory burdens on OTC drug manufacturers, and may bar the sale of OTC drug products in the California market. Yet, there is a strong argument that the DTSC requirements conflict with and are preempted by FDA laws and regulations. However, manufacturers cannot hide behind the hope of a judicial review of the preemption issue after implementation of state regulations. By then, industry may also have to contend with product liability claims. They must take action now. Manufacturers must aggressively advocate for an exemption for all drug products—not only Rx drugs—during the notice and comment period. Otherwise, drug manufacturers will be left with the costly choices of complying with the Safer Consumer Products regulations (and possible removal of their products from the California market) or challenging them through a lawsuit.