Congress Overhauls FDA Cosmetics Authority In Year-End Appropriations Bill – Life Sciences, Biotechnology & Nanotechnology

On December 23, 2022, Congress significantly expanded the
FDA’s regulatory authority over cosmetics as part of its
year-end Consolidated Appropriations Act of 2023, the first major
statutory change to the Food, Drug and Cosmetics Act (FDCA)
regarding the regulation of cosmetics since the FDCA’s
enactment in 1938.

Passed with bipartisan support and garnering industry approval, the
Modernization of Cosmetics Regulation Act (MCRA) amends Chapter VI
of the FDCA and contains a number of key provisions, requirements
and dates for compliance, as summarized below.

Expanded Agency Rulemaking Authority

The MCRA requires the FDA to develop and issue regulations
regarding:

• Good manufacturing practice regulations consistent with
  national and international standards by 2024, with a final rule no
  later than 2025;




• Identification of fragrance allergens that must be disclosed on
  cosmetics labels and the format for disclosure, in line with EU and
  other international requirements; and




• Standardized testing methods for detecting and identifying
  asbestos in talc-containing products in 2023, with a final rule no
  later than 180 days after the close of the public comment period
  for the proposed rule.

The MCRA further requires the FDA to publish a report no later
than 2025 assessing the use of per- and polyfluoroalkyl substances
(PFAS) in cosmetics and safety risks associated with such use.

Expanded FDA Enforcement Authority

The MCRA grants the FDA mandatory recall authority (FDCA Section
610) over cosmetics when the agency determines:

• There is a “reasonable probability” that a cosmetic
  is adulterated or misbranded under the FDCA;




• Use or exposure to the cosmetic will cause serious adverse
  health consequences or death; and




• The responsible individual or entity has refused to voluntarily
  recall the product or cease distribution.

The MCRA will allow the FDA to suspend facility registration if
the agency determines that a product manufactured at that facility
has a “reasonable probability” of causing serious adverse
health consequences and that other products manufactured by the
facility may be similarly affected (FDCA Section 607). Suspended
facilities will be entitled to notice and an opportunity for a
hearing to determine whether the suspension is necessary and, if
so, will be required to develop corrective action plans.

The MCRA also authorizes the FDA to access certain records
pertaining to product safety and request a list of ingredients in a
product’s fragrances or flavors if it has reason to believe
that a fragrance or flavor contributed to a serious adverse event
(FDCA Section 610).

Mandatory Requirements for Manufacturers, Packers and
Distributors

In addition to expanding the FDA’s regulatory and
enforcement authority, the MCRA imposes a number of significant new
requirements on a “responsible person,” defined as
cosmetics manufacturers, packers and distributors in accordance
with Section 609(a) of the FDCA or Section 4(a) of the Fair
Packaging and Labeling Act. These include:

• Facility registration for any facility that manufactures or
  processes cosmetic products intended for sale in the
  U.S.—irrespective of whether the facility is located in the
  U.S.—within one year of the MCRA’s enactment for existing
  facilities, and for new facilities, the later of 60 days after
  commencement of manufacture or 60 days after the deadline for
  existing facilities (FDCA Section 607);




• Product and ingredient listing, including location of
  manufacture, effective within one year of the MCRA’s enactment
  for existing products, and for new products, within 120 days of
  marketing (FDCA Section 607);




• Updated cosmetic labeling requirements, including
  identification of contact information for adverse events on product
  labels effective two years after the MCRA’s enactment;
  identification of fragrance allergens on product labels consistent
  with the FDA’s new regulations; and updated labeling
  requirements for products intended for professional use, including
  a notice that only a licensed professional may use the product,
  effective one year after the MCRA’s enactment (FDCA Section
  608);




• Maintenance of records “adequate[ly]
  substantiat[ing]” product safety (FDCA Section 608); and




• Maintenance of records documenting adverse events for six years
  (or three years for some small businesses) and reporting of
  “serious adverse events” to the FDA no later than 15 days
  after the date of learning of the incident, with the definition of
  “serious adverse event” expanded to include infection or
  “significant disfigurement (including serious and persistent
  rashes, second- or third-degree burns, significant hair loss, or
  persistent or significant alteration of appearance), other than as
  intended, under conditions of use that are customary or
  usual.” (FDCA Section 605)

Other Notable Provisions

Other notable provisions of the MCRA include the following:

Preemption

The MCRA preempts state and local requirements differing from
the updated federal framework relating to:

• Cosmetic product establishment registration and product
  listing;




• Good manufacturing practice;




• Recordkeeping;




• Recalls;




• Adverse event reporting; and




• Safety substantiation.

However, the MCRA does not block states from prohibiting or
limiting the amount of an ingredient in a cosmetic product or
continuing any state requirements regarding ingredient reporting
that are in effect at the time of the MCRA’s enactment, such as
California’s Proposition 65 (FDCA Section 614).

Cosmetics Containing Active Pharmaceutical Ingredients or
Making “Drug” Claims

The MCRA clarifies that for products considered both a drug and
a cosmetic under the FDCA (what as sometimes colloquially referred
to as “cosmeceuticals“), drug
requirements of Chapter V of the FDCA apply instead of the cosmetic
requirements of Chapter VI, except with regard to fragrance
allergen disclosure and professional use labeling requirements
discussed above. The MCRA does not alter the legal framework that
cosmetics that contain active pharmaceutical ingredients are drugs.
It also does not change the legal framework that cosmetics making
drug claims such as structure function claims will be deemed
drugs.

CBD or Other Hemp-Derived Products

The MCRA does not address or alter the existing regulatory
framework with respect to products containing CBD or other
hemp-derived products.

Animal Testing

The MCRA did not prohibit or otherwise restrict the use of
animal testing for cosmetics. However, the MCRA does state,
“It is the sense of the Congress that animal testing should
not be used for the purposes of safety testing on cosmetic products
and should be phased out with the exception of appropriate
allowances.”

Small Business Accommodations

The MCRA exempts small businesses, defined as owners and
operators whose average gross annual domestic sales for the
previous three years is less than $1 million, from the requirements
pertaining to good manufacturing practices and establishment
registration and product listing, with the exception of those that
manufacture the following products:

• Injectables;




• Cosmetics intended for internal use;




• Products that alter appearance for more than 24 hours under
  normal use; or




• Products that regularly come into contact with the mucus
  membrane of the eye.

Appropriations

Notably, the MCRA does not impose industry user fees. Instead,
Congress appropriated to FDA $14.2 million for fiscal year 2023,
$25.96 million for fiscal 2024 and $41.89 million for each of
fiscal years 2025 through 2027 for developing regulations and
performing the other activities under the MCRA.

Regulation of Advertising

The MCRA does not alter the relationship between the Federal
Trade Commission and the FDA regarding the regulation of the
advertising and promotion of cosmetics.

Conclusion

The MCRA significantly expands the FDA’s rulemaking and
enforcement authority over cosmetics and closes a number of gaps in
the existing regulatory framework.

The MCRA falls short of earlier legislative proposals, which
would have authorized the FDA to conduct annual investigations into
the safety of ingredients or, in certain cases, restrict or
outright prohibit the use of ingredients like PFAS or so-called
endocrine disrupters. Nor does the MCRA provide clarity with
respect to cosmetic labeling issues, such as whether products are
“clean,” “natural,” “nontoxic” or
“cruelty-free,” which have been the subject of numerous
class action complaints filed against cosmetics companies, or
address so-called greenwashing or environmental impact concerns,
which have been the focus of recent legislative attention in the EU
and UK. The MCRA will not provide any guidance for companies
seeking to avoid class action claims for alleged false claims and
labeling.

However, the passage of MCRA puts cosmetics manufacturers,
packers and distributors on notice that new rules and regulations
are coming over the next three years—and the FDA will have
authority to recall products and shut down facilities. Accordingly,
companies should assess their systems to comply with the new
requirements and be ready to implement changes to comply with new
FDA rules.

One change to definitely be ready for: the standard testing for
asbestos in talc-containing products. Companies should document
their suppliers of talc and what representations are made regarding
whether the talc is asbestos-free.

For More Information

If you have any questions about this Alert, please
contact Alyson Walker Lotman, Lindsay Ann Brown, Kelly A. Bonner, any of the attorneys in our Products Liability and Toxic Torts Group, attorneys in our Fashion, Retail and Consumer Branded Products
Industry Group, attorneys in our Life Sciences and Medical Technologies Industry
Group or the attorney in the firm with whom you are regularly
in contact.

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prepared and published for informational purposes only and is not
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