US FDA - No Longer "Not" Cosmetics?
The Personal Care Products Safety Act bill (PCPS), originally introduced in 2015, has been re-introduced with bipartisan support. Notwithstanding broad extraterritorial jurisdiction and the ongoing aggressive exportation of food, drug, and medical device regulations, the US regulatory system has a lighter hand on cosmetics. Increasing consumer interest in and awareness of what they are using for cosmetic purposes is driving a shift in attitude. The Food and Drug Administration (FDA) plays a role in cosmetics review and currently prohibits or restricts 11 substances (including mercury and chloroform) in cosmetics products. By contrast, the EU has banned over 1,300 chemicals and restricted a further 256. The PCPS could change this.
Under the PCPS, the FDA will be required to investigate at least five potentially dangerous ingredients each year. If an ingredient is found to pose health risks, the FDA could ban or restrict its use.
If the PCPS is adopted into law, the first five substances to be reviewed by the FDA would be:
- Diazolidinyl urea;
- Lead acetate;
- Methylene glycol and formaldehyde;
- Propyl paraben; and
All are currently allowed in the EU with the exception of lead acetate which is prohibited. Formaldehyde is subject to certain restrictions (namely it is not to be used in aerosol dispensers and any products containing >0.05% formaldehyde must have "contains formaldehyde" on the label).
Cosmetic companies would have to register with the FDA – a predicate to FDA inspections which have become increasingly aggressive over the years. The PCPS could result in the FDA issuing regulations governing Good Manufacturing Practices (GMP) for personal care products. Rigorous inspection of GMP could result in:
- Recalls of personal care products that threaten consumer safety (currently recalls are voluntary) with potential product liability;
- Warning labels for child use, and other limitations on use, and fair balance requirements for claims – does the product really rejuvenate or just hydrate? Complete label information, including ingredients and product warnings, would also be required to be posted online; and
- Contact information being required on labels to facilitate reporting of serious adverse events to the FDA within 15 days, including death, hospitalization and disfigurement which, in itself, would require the development of an internal complaint handling and quality system.
As with many playing field leveling laws, industry support has been gathered – increasing the likelihood of passage. Larger multi-national companies are already well-versed in operating in highly regulated markets such as the EU providing them with a competitive advantage. Will we see further consolidation in the cosmetics industry as has been the trend when FDA jurisdiction is extended internationally with the acquisition of specialty brands? Will consumer care companies that provide OTC drugs further extend into cosmetics? Will we see AsiaPac and EU countries piggybacking on FDA inspectional reports, factory closures, and import alerts?
Baker McKenzie provides the cross-border regulatory and merger and acquisition experience and expertise that may help you if this new environment becomes a reality.