@Zues:
I would say the FDA's argument has more holes than Swiss Cheese... :-)
That being said, being the FDA, they have a lot of authority and their opinion carries a lot of weight in a court of law so this case isn't a "slam dunk" by any means. Hopefully however the courts will see the "Swiss Cheese" holes in their arguments/positions.
I have a background in medicine and science (even went to medical school for a while). I also have almost 10 years of drug research experience (with a few scientific publications under my belt). IMHO the FDA is over-stretching their bounds by calling it a "drug".
Again, we're dealing with the FDA however so who knows.