Landmark Cosmetic Law Adopted That Significantly Changes How Cosmetics Are Regulated By FDA – Product Liability & Safety

On Friday, December 23, 2022, Congress passed an approximately
$1.7 trillion omnibus spending bill for fiscal year 2023, which was
signed into law by President Biden on December 29, 2022. While the
unusual circumstances surrounding the 4,000+ page bill’s
passage (including the race to beat dual threats of government
shutdown and  an impending winter storm) have
dominated most news stories about the legislation, the bill also
ushers in numerous landmark reforms, including to the federal
regulation of cosmetics. 

In fact, the “Modernization of Cosmetics Regulation Act of
2022 (MOCRA)” (incorporated as Sections 3501-3508 of the
spending bill) marks the first major change to the US Food and Drug
Administration (FDA)’s authority over cosmetics since
1938—when the Federal Food, Drug, and Cosmetic Act (FDCA) was
signed into law. MOCRA’s provisions (detailed below), including
its addition of new Sections 604-614 to subchapter VI of the FDCA,
significantly expand the scope of FDA’s oversight and add
additional compliance requirements for businesses. Stakeholders in
the cosmetics industry should pay close attention to these new
developments and prepare for these changes to take effect starting
in December 2023, one year after MOCRA’s passage. 

New Reporting Requirements for Businesses

Under MOCRA, the cosmetics industry must now report additional
information about a cosmetic product’s manufacturing,
formulation, and use to FDA. Pursuant to these new reporting
requirements, the business deemed to be the “responsible
person” for any given cosmetic product—i.e., “the
manufacturer, packer, or distributor of a cosmetic product whose
name appears on the label”—must:

• Register each facility that manufactures a cosmetic
  product for US distribution (FDCA Section 607), and renew
  each registration every two years. Businesses have one year to
  register existing facilities, while new facilities must be
  registered either 60 days after they start manufacturing cosmetics
  or 60 days after the existing facility deadline—whichever
  falls later. Notably, MOCRA exempts facilities that merely label,
  package, hold, or distribute cosmetics products, facilities that
  manufacture ingredients but not final products, and facilities used
  solely for product research and evaluation purposes.




• Submit to FDA annual cosmetic product listings that
  disclose key product information (including ingredients and
  manufacturer information) (FDCA Section 607). The
  listing must also include any fragrances, flavors, or colors within
  the product. Businesses must submit product listings for all
  existing products by December 2023, and submit listings for new
  products within 120 days of commencing marketing.




• Track and report adverse events associated with its
  cosmetic products (FDCA Section 605). Similar to
  existing requirements for certain drugs and supplements, businesses
  must now maintain records for any adverse health event for six
  years (shortened to three for small businesses) and report serious
  adverse events to FDA within 15 days of learning about the issue.
  For the year following an initial report of a serious adverse
  event, businesses must also update FDA with any new and material
  information they learn. MOCRA takes an expansive view of
  “serious adverse effect” and covers infections,
  “significant disfigurement” (e.g. serious and/or
  persistent rashes and burns), significant hair loss, and other
  “persistent” or “significant” changes to the
  user’s appearance.

New Product Labeling Requirements for Businesses

With the addition of Section 609 to the FDCA, MOCRA adds three
additional product labeling requirements for responsible entities,
who now must: 

• Specify a point of contact for consumers (FDCA Section
  609(a)).  To facilitate the adverse event tracking
  and reporting discussed above, businesses must update cosmetic
  product labels within two years to include the contact information
  for consumers to report any adverse events. Businesses may choose
  to list a US address, US phone number, and/or electronic contact
  information or an interactive website as this point of
  contact.




• Disclose fragrance allergens (FDCA Section
  609(b)). Cosmetic product labels must now identify each
  and every fragrance allergen within the product. As discussed
  further below, FDA is to issue a regulation with a list identifying
  these allergens within 18 months of MOCRA’s passage.




• Distinguish products intended for professional use
  (FDCA Section 609(c)). Now, cosmetic products
  intended for use by licensed professionals (i.e., estheticians,
  cosmetologists, nail and hair salons, etc.) must be clearly labeled
  as such. Product labels for these professional products must also
  include the additional contact information, and fragrance allergen
  information discussed above.

New Substantiation Requirements for Businesses

While the cosmetics industry is already subject to a variety of
consumer protection and false advertising laws that, broadly
speaking, require substantiation for any product labeling or
advertising claim (including, in many cases the implied or explicit
claim that a cosmetic product is safe for use), MOCRA updates the
FDCA to specifically require responsible persons to:

• Maintain robust safety substantiation evidence (FDCA
  Section 608).  Businesses must maintain robust
  records, including tests, analyses, research, and other evidence
  sufficient to demonstrate to a “reasonable certainty”
  that a cosmetic product is safe. 

Forthcoming FDA Rulemaking Imposing Additional New
Requirements

In addition to the new requirements discussed above, MOCRA also
directs FDA to issue several regulations that will further increase
compliance requirements for the cosmetics industry. Specifically,
FDA must promulgate additional regulations establishing new:

• Good Manufacturing Practices (GMPs) (FDCA Section
  606). FDA is required under the new law to issue
  regulations establishing GMP requirements for facilities that
  manufacture cosmetics. The new GMP regulations also may authorize
  FDA to inspect records related to GMPs during inspections. Notably,
  MOCRA requires FDA to “consult” with key stakeholders in
  the cosmetics industry, including manufacturers, as part of the
  rulemaking process—providing businesses an opportunity to
  help shape the, likely significant, GMP rules before FDA’s
  December 2024, deadline to publish a proposed rule (i.e., two years
  from MOCRA’s passage) and the December 2025, deadline to
  issue the final version (i.e., three years from MOCRA’s
  passage).




• Requirements related to the fragrance allergen
  disclosure (FDCA Section 609(b)).  MOCRA directs FDA
  to issue a regulation that will enable businesses to comply with
  the fragrance allergen labeling requirement discussed above.
  Specifically, by the end of June 2024 (i.e. 18 months from the
  MOCRA’s passage), FDA must issue a proposed rule that includes
  a list of fragrance allergens, and then issue its final regulation
  no later than 180 days after the close of a public comment period.
  Notably, MOCRA specifically directs FDA to consider European Union
  (EU) and other international, state, and local allergen
  requirements in crafting this rule—perhaps providing some
  foreshadowing of FDA’s eventual course in advance of the formal
  rulemaking process.




• Requirements related to talc-containing cosmetics
  (MOCRA Section 3505). By December 2023, FDA must
  issue a proposed rule to establish and require standardized testing
  methods for detecting and identifying asbestos in talc-containing
  cosmetic products, and must finalize the rule 180 days
  thereafter.

MOCRA also identifies perfluoroalkyl and polyfluoroalkyl
substances (PFAS) and animal testing as two additional areas of
focus for FDA in the cosmetic arena. But importantly, MOCRA
confirms federal interest in but stops short of directing the
Agency to impose additional regulatory requirements for these
issues:

• PFAS in cosmetics (MOCRA Section 3506). 
  MOCRA requires FDA to publish a report within three years that
  assesses the use of PFAS in cosmetic products and the safety of
  PFAS used in cosmetic products.




• Animal testing (MOCRA Section 3507). Although
  the new law does not ban the use of animals in testing the safety
  of cosmetic products, it articulates Congress’ view
  discouraging the use of such activities and recommends they be
  phased out.

Newly Expanded FDA Authority

In addition to the increased compliance requirements it imposes
on the cosmetics industry, MOCRA also expands FDA’s oversight
into cosmetic products and provides the Agency with several
powerful new tools for effectuating its new authority.
Specifically, FDA gained the power to: 

• Issue mandatory recalls (FDCA Section 611).
  FDA may now issue mandatory recalls if it determines that a
  cosmetic is either adulterated under Section 602 or misbranded
  under Section 601 of the FDCA, and that a reasonable probability
  exists that the use and/or exposure to the product will cause
  serious adverse consequences or death.




• Access records (FDCA Section 610). FDA may now
  access a company’s records related to a cosmetic product if the
  Agency reasonably believes the product and/or its ingredients are
  adulterated such that they present a risk of serious adverse health
  consequences or death. The Agency also may now request a list of
  ingredients in a product’s fragrance or flavor if it believes
  these components contributed to a consumer’s serious adverse
  event, and access records as needed to enforce the GMP rules,
  adverse event reporting rules, and other new business compliance
  requirements detailed above. Notably, this new records access
  authority does not provide limitless discovery—records
  related to formulas/recipes, financial data (including pricing,
  sales, and employees), and research data unrelated to safety
  substantiation remain out of reach.




• Suspend facilities (FDCA Section 607). Under
  MOCRA’s new updates to the FDCA, FDA can suspend the
  registration of any facility that manufactures cosmetic products if
  the Agency determines that there is a reasonable probability that a
  product manufactured at that facility caused a serious adverse
  effect and that other products manufactured at that site may do the
  same. This suspension carries serious consequences for a business,
  as products from the impacted facility may not be introduced into
  the market until the facility’s registration is
  reinstated.

Other Important Provisions

MOCRA also includes a number of other important provisions that
will significantly impact businesses and the way the new provisions
are enforced:

• Preemption (FDCA Section 614). 
  Importantly, the new law provides for express preemption of any
  state or local laws that are not identical to
  any requirement discussed above regarding registration and product
  listing, GMPs, records, recalls, adverse event reporting, or safety
  substantiation.




• Key exemptions for products regulated as both drugs and
  cosmetics (FDCA Section 613). Specifically, a cosmetic
  product or facility that is subject to FDCA provisions for products
  regulated as drugs is exempt from the new MOCRA requirements
  relating to adverse event reporting, GMPs, facility registration
  and product ingredient listing, safety substantiation, and contact
  information labeling, as well as FDA’s new records access and
  mandatory recall authority. However, these products must still
  comply with the new fragrance allergen and professional use
  labeling requirements discussed above.




• Flexibility for small businesses (FDCA Sections
  612).  Businesses with average gross annual sales in
  the United States of cosmetic products for the previous 3-year
  period of less than $1,000,000 are considered small businesses and
  are exempt from the GMP regulations to be issued under Section 606
  and the registration and product listing requirements under Section
  607. Elsewhere within the Act, MOCRA also provides for enhanced
  regulatory compliance flexibility for smaller businesses when
  enforcing many of the new requirements.

Key Takeaways

Stakeholders in the cosmetics industry will need to devote
significant resources to ensure compliance with the new requirement
imposed in MOCRA. While many of these requirements will be
particularly impactful for entities who meet the “responsible
person” definition discussed above, the law will, in general,
significantly change the way cosmetics are regulated, and its
impact will be felt by everyone, from cosmetic ingredient suppliers
to retailers. Moving forward, stakeholders should keep a close
watch on FDA’s efforts to establish regulations to enforce
the various provisions of the new law, and also should be sure to
participate in those rulemakings when necessary. 

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

POPULAR ARTICLES ON: Consumer Protection from United States