United States: An Oddity: Approval And Regulatory Authority Over Cosmetics

For various reasons, we are seeing a growth of lawsuits alleging injuries from use of overthe- counter cosmetics sprouting up across the country.1 Social media reflects the invasion of the "safe beauty products" movement. For example, we are urged to trash the face lotion sitting on our bathroom counters because it is "toxic" to our well-being and to replace it with the promoter's product because it is "better" for us. Cosmetic industry news is all the buzz regarding regulatory authority over cosmetics.2

DEFINING COSMETICS AND DRUGS

Fundamental to any discussion regarding cosmetics claims is the significant legal distinction between "cosmetics" and "drugs." In order to differentiate ownership of regulatory authority over cosmetic products, we must first recognize which products qualify as cosmetics and why they are not categorized as drugs. I am not sure about you, but when I see or hear the word "cosmetics," I think of makeup. I think of all of the products found on "that aisle" of my neighborhood supermarket. I do not think of "cosmetics" as drugs. This assumption is fairly accurate, and to the ordinary consumer it means little. But to those of us in the cosmetic or drug industry, the differences between cosmetics and drugs demand a multitude of considerations.

The Food and Drug Administration (FDA) provides that products intended to cleanse or beautify are generally regulated as cosmetics.3 "Articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body...for cleansing, beautifying, promoting attractiveness, or altering the appearance" are cosmetics.4 Such articles include many items that you would expect to be a cosmetic, like lipsticks, fingernail polishes, eye shadows, and blushes, but also include moisturizing lotions, perfumes, shampoos, hair coloring products, and deodorants, plus "any substance intended for use as a component of a cosmetic product."5

THE FOOD AND DRUG ADMINISTRATION PROVIDES THAT PRODUCTS INTENDED TO CLEANSE OR BEAUTIFY ARE GENERALLY REGULATED AS COSMETICS.

By contrast, products such as acne treatments, sunscreens, antiperspirants, and ointments, intended to treat or prevent disease, or affect the structure or function of the body, are drugs.6 Even if these products affected how you look, they are still considered drugs.7 Manufacturers likely prefer the less cumbersome regulations applicable to cosmetics and do not want their product to be construed as a drug. But cosmetic safety becomes an issue. If the safety of a cosmetic is not adequately substantiated, the product may be considered misbranded and may be subject to regulatory action, unless the label provides the following statement: Warning—The safety of this product has not been determined.8

This is where the confusion sets in. Cosmetics and drugs are two separate categories of products and must adhere to different laws and regulations. The difference is in how the law defines their intended use.9 Some products are both cosmetics and drugs.10 If this occurs, those products must meet the requirements for both cosmetics and drugs.11 Examples include antidandruff shampoos (which cleanse the hair and treat dandruff) and antiperspirant-deodorants, as well as moisturizers and makeup with SPF (sun protection factor) numbers.12

CATEGORIZATION OF A PRODUCT AFFECTS AUTHORITATIVE POWER

Intended use is the basis by which a product is defined as either a cosmetic or drug. But how is a product's intended use established? Claims stated on promotional materials (e.g. product labeling, advertising) may affect the categorization of a product13 (discussed in detail below). Even if a product is marketed as a cosmetic, certain marketing statements may otherwise characterize the product as a drug.14 For example, a daily facial moisturizer that promises to decrease the production of pigment in the skin, although marketed as a cosmetic, would be considered a drug.15

Consumer perception is another way that intended use is established.16 The product's reputation may play a role in classification. The reason the consumer is purchasing the product and the use for which it is purchased are factors to be considered.17 Probably the most relatable example of intended use is the functionality of the ingredients.18 If there is a well-known therapeutic use for the product, then it would be considered a drug. Examples include fluoride in toothpaste and aromatherapy (sleep aid) in essential oils.19

With this better understanding of why certain products are termed cosmetics, we turn to the regulatory implications associated with cosmetics that some love and others appear to hate.

Cosmetic products are regulated by the FDA pursuant to the Federal Food, Drug, and Cosmetic Act (FDCA), which is codified into Title 21 Chapter 9 of the United States Code. "FDA enforces laws enacted by Congress and issues regulations as authorized by Congress to implement its statutory authority. The regulations can create binding obligations and have the force of law."20 While the FDCA establishes that the FDA has authority over product safety, unlike most drugs, cosmetic products and their ingredients, with the exception of color additives, do not have to undergo premarket FDA review or approval.21

Good Manufacturing Practice (GMP) is a tool to help assure cosmetic products are neither adulterated nor misbranded, and manufacturers are responsible for compliance.22 While the FDA has provided recommendations for cosmetic GMP, there are no regulations setting forth particular GMP requirements for cosmetics.23 In contrast, strict adherence to GMP requirements for drugs is mandatory.24 Selling "adulterated" or "misbranded" cosmetics is prohibited by the FDCA. Penalties can be imposed for doing so.25 Cosmetics become "adulterated" if the product's composition is compromised with violations involving ingredients, contaminants, processing, packaging, or shipping and handling.26 Cosmetics are "misbranded" if the violations involve improper labeling or deceptively packaged products.27 If a cosmetic label is false or misleading or fails to provide required information, it is considered misbranded.28 Even if the label provides the required information, the label can become misbranded if it is improperly displayed.29

Registration is another procedure that brings about different legal and regulatory propositions in the cosmetic world. While drug makers are required to register their foreign and domestic establishments with the FDA,30 "[U]nder the law, manufacturers are not required to register their cosmetic establishments or file their product formulations with FDA, and no registration number is required to import cosmetics into the United States."31 However, the Voluntary Cosmetic Registration Program (VCRP) for cosmetic establishments and formulations32 is maintained by the FDA and participation is encouraged.33

WHILE THE FDCA ESTABLISHES THAT THE FDA HAS AUTHORITY OVER PRODUCT SAFETY, UNLIKE MOST DRUGS, COSMETIC PRODUCTS AND THEIR INGREDIENTS, WITH THE EXCEPTION OF COLOR ADDITIVES, DO NOT HAVE TO UNDERGO PRE-MARKET FDA REVIEW OR APPROVAL.

LABELING

Labeling and misbranding issues are the impetus for many cosmetics lawsuits. Let us dissect what labeling means before authoritative power is discussed. Any label or other written, printed, or graphic matter on or accompanying a product constitutes labeling.34 The principal display panel and information panel, which have their own informational requirements, are also considered parts of the label and accommodate label information.35

The cosmetics marketed and distributed in the United States, no matter where they are manufactured, must comply with the labeling regulations published by the FDA under the authority of the FDCA and the Fair Packaging and Labeling Act (FPLA).36 These laws and associated regulations are "intended to protect consumers from health hazards and deceptive practices and to help consumers make informed decisions regarding product purchase."37 For cosmetics marketed on a retail basis to consumers, FDA requires a declaration of ingredients on the product label.38 Under the FDCA, cosmetics that fail to comply with the FPLA are considered misbranded.39 Likewise, if the labeling is "false or misleading in any particular," then it is prohibited.40 However, the FDA does not have authority to approve cosmetic product labeling before it hits the market.

The authority of the Federal Trade Commission (FTC) also comes into play. Pursuant to the Federal Trade Commission Act (FTCA), the FTC is given the authority to prevent unfair or deceptive acts or practices in or affecting commerce. An "unfair or deceptive act or practice" under the FTCA includes "the dissemination or the causing to be disseminated of any false advertisement."41 Arguably, to the ordinary consumer it is easy to confuse the responsibilities and governance of the FTC and FDA, because labeling and advertising appear to fall under the same umbrella of "marketing." But authority over labeling and advertising is different, and it is apparent in the FTCA's definition of "false advertisement." A false advertisement is "an advertisement, other than labeling, which is misleading in a material respect."42 Although the FDA and FTC work to eliminate misleading elements associated with cosmetics, each has a specific authority – the FDA regulates labeling and the FTC regulates advertising. Courts have recognized this limitation of the FTCA's reach.43

A FALSE ADVERTISEMENT IS "AN ADVERTISEMENT, OTHER THAN LABELING, WHICH IS MISLEADING IN A MATERIAL RESPECT."

In addition, the FTC and FDA entered into a Memorandum of Understanding that makes clear that cosmetic labeling is excluded from the items that fall under the scope of the FTC's regulatory authority. The Memorandum provides that the FTC "has primary responsibility with respect to the regulation of the truth or falsity of all advertising (other than labeling) of foods, drugs, devices and cosmetics."44 This Memorandum remains in effect today, and it further establishes that cosmetics labeling is a matter for the FDA.

If the FDA does not and cannot pre-approve cosmetic product labeling, it is improper to label cosmetics "FDA Approved." Cosmetic labeling or advertising containing language that suggests that the FDA has approved the product is prohibited. Even if the product is on file with FDA's VCRP,45 the same restriction applies. As such, a false or misleading statement on labeling renders a cosmetic "misbranded."

SAFETY ASSURANCE WITH NO PRE-MARKET APPROVAL

We have established that cosmetics do not undergo pre-market FDA review or approval. The FDA does not approve cosmetic product labeling, so proper labeling lies in the hands of the cosmetic manufacturer's and/or distributor's hands. Cosmetic manufacturers or companies and individuals who market cosmetics are legally responsible for ensuring that their products are safe. Safety tests for the individual products and/or their ingredients are not required under the law or under FDA regulations.46

So, how does the FDA assist in assuring cosmetic safety to the consumer? Although the FDA does not require these companies to test their products' safety, it has consistently encouraged them to do so. Manufacturers and marketers run the risk of having their products deemed adulterated or misbranded if they are not marketed appropriately, which could in turn subject them to regulatory action.47

If the FDA has reliable information that a cosmetic is adulterated or misbranded, the FDA can file an action through the Department of Justice in federal court to have the cosmetic removed from the market.48 Likewise, to ensure that further shipments of that product do not continue, the FDA may request the issuance of a restraining order.49 Further, if the manufacturer or individual is violating the law, the government may seize the property or the FDA can initiate criminal action.50

Cosmetic manufacturing facilities are subject to inspections, and discovery of non-compliance with the FDCA and FPLA can occur through inspections. The FDA can and does inspect and even collects samples for examination and analysis to assure cosmetic safety.51 The FDA will also inspect in response to cosmetic adverse event complaints.52 While the FDA is not authorized to recall adulterated or misbranded cosmetics, it does have the ability to monitor companies that issue recalls on their own initiative. Either that, or the FDA can request a recall if the company is unwilling to remove the product at issue without the FDA's written request.53

Another measure of safety assurance implemented by the FDA involves overseeing imports. U.S. Customs and Border Protection works with the FDA to monitor imports. Imported cosmetics are subject to review by FDA at the time of entry through U.S. Customs under section 801(a) of the FDCA.54 If the products are noncompliant, it is possible they will not be permitted into the United States.55 If the products are not brought into compliance, they will either be destroyed or sent back.56 Even if the cosmetics are not inspected upon entry, every shipment of cosmetics that enters the United States is subject to the laws the FDA enforces.57

CONCLUSION

For cosmetic manufacturers, it appears at first blush that the less stringent legal and regulatory requirements qualifying a product as a cosmetic would be most appealing. However, as discussed above, there is a unique set of factors that a manufacturer must take into consideration if hoping to market a product as a cosmetic. Ensuring that the product does not cross the faint line that distinguishes it as a drug is of utmost importance. Misbranding of products remains of grave concern amongst the cosmetic and drug industries. The FDA is working within its regulatory authority over cosmetic product labeling, but the fact remains that its limited control in this arena is the talk (and worry) of the town. The "safe beauty product" movement that implicates regulatory and approval authority over cosmetics is the real deal, and it does not appear to be going away anytime soon.

Footnotes

1 See Morales v. Conopco, Inc., No. 2:13-2213 WBS EFB, 2016 WL 3688407 (E.D. Cal. July 12, 2016) (where Plaintiffs filed suit due to alleged misleading nature of certain hair care products being labeled "TRESemme Naturals" despite the products containing synthetic ingredients); see also Michael v. Honest Company, Inc., No. LACV1507059JAKAGRX, 2016 WL 8902574 (C.A. Cal. Dec. 6, 2016) (class-action lawsuit over claims that a number of defendant's "Natural Products" contain non-natural ingredients).

2 Laura Entis, That Moisturizer You're Slathering on Your Face Isn't Regulated, Fortune (June 27, 2017), http://fortune.com/2017/06/27/fda-cosmetics-regulations/; Jane Brody, For Cosmetics, Let the Buyer Beware, New York Times (Aug. 7, 2017), https://www.nytimes.com/2017/08/07/well/for-cosmetics-let-the-buyer-beware.html.

3 Cosmetics Safety Q&A: Personal Care Products, U.S. Food & Drug Administration (Feb. 22, 2018), https://www.fda.gov/cosmetics/resourcesforyou/consumers/ucm136560.htm.

4 21 U.S.C.A. § 321(i) (2012).

5 Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), U.S. Food & Drug Administration (Mar. 6, 2018), https://www.fda.gov/Cosmetics/GuidanceRegulation/LawsRegulations/ucm074201.htm.

6 Cosmetics Safety Q&A: Personal Care Products, supra note 3.

7 Id.

8 See 21 C.F.R. § 740.10 (2018).

9 Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), supra note 5.

10 The FDCA does not recognize any such category as "cosmeceuticals." See Id.

11 Id.

12 Id.

13 Id.

14 Id.

15 Id.

16 Id.

17 Id.

18 Id.

19 Id.

20 Guidance & Regulation, U.S. Food & Drug Administration (Nov. 3, 2017), https://www.fda.gov/Cosmetics/GuidanceRegulation/default.htm.

21 Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), supra note 5.

22 Id.

23 Id.

24 Id.

25 See 21 U.S.C. §§ 331(a), 361-62(a)-(d).

26 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, U.S. Food & Drug Administration (Nov. 3, 2017), https://www.fda.gov/cosmetics/guidanceregulation/lawsregulations/ucm074162.htm.

27 Id.

28 Id.

29 Id.

30 See 21 C.F.R. § 207 (2018).

31 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

32 See 21 C.F.R. §§ 710, 720 (2018).

33 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

34 21 U.S.C. § 321(m).

35 Labeling Regulations, U.S. Food & Drug Administration (Mar. 6, 2018), https://www.fda.gov/Cosmetics/Labeling/Regulations/default.htm.

36 Id.

37 Id.

38 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

39 See Id. (noting that cosmetics distributed solely for professional use, institutional use, or as free samples or hotel amenities are not included).

40 Id.

41 See 15 U.S.C. § 52.

42 15 U.S.C. § 55(a)(1).

43 See, e.g., F.T.C. v. Pantron I Corp., 33 F.3d 1088, 1095 (9th Cir. 1994) (recognizing that the FTCA defines "false advertisement" as an advertisement, other than labeling ...); see also Miles Labs., Inc. v. FTC, 50 F. Supp. 434, 437 (D.D.C. 1943) ("The dissemination of a 'false advertisement' by a corporation otherwise than on the labels carried by its products is an unfair or deceptive act or practice which is declared unlawful and which the Federal Trade Commission is empowered and directed to prevent.") (emphasis added), aff'd, 140 F.2d 683 (D.C. Cir. 1944).

44 Memorandum of Understanding Between Federal Trade Commission and the Food and Drug Administration, 36 Fed, Reg. 18539-02 (Sept. 16, 1971).

45 See 21 C.F.R. §§ 710.8, 720.9 (providing that participation in the VCRP to suggest official approval is prohibited).

46 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

47 See Estee Lauder, Inc. v. U.S. Food & Drug Admin., 727 F. Supp.1 (D.D.C. 1989) (regulatory letter written to cosmetic manufacturer about its anti-aging claims on skin cream labeling that allegedly presented to affect the structure or function of the body and warned that the administration was prepared to invoke sanctions such as seizures and injunctions pursuant to the FDCA); see also Mollicone v. Universal Handicraft, Inc. et al., No. 216CV07322CASMRWX, 2017 WL 440257, (C.D. Cal. Jan. 30, 2017) (where Plaintiff alleged violations of the FDCA based on allegations that the products are misbranded - products neither "halt the aging process" nor are they "proven to restore youthful appearance" - and are unlawfully sold as unapproved drugs). 48. FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

49 Id.

50 Id.

51 See United States v. Roux Labs., Inc., 456 F. Supp. 973 (M.D. Fla. 1978) (imposition of sanctions considered where defendant resisted compliance with warrant for FDA to inspect defendant laboratories and collect samples of materials used in hair dye products).

52 See Statement on FDA Investigation of WEN by Chaz Dean Cleansing Conditioners, U.S. Food & Drug Administration (Nov. 15. 2017), https://www.fda.gov/cosmetics/productsingredients/products/ucm511626.htm. (reporting that these conditioners resulted in hair loss, hair breakage, balding, itching and rash).

53 FDA Authority Over Cosmetics: How Cosmetics Are Not FDA-Approved, but Are FDA-Regulated, supra note 26.

54 Id.

55 Id.

56 Id.

57 Id.

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