United States: Will The Passage Of The Personal Care Products Safety Act Provide A Rich Foundation For Uniform Cosmetic Compliance Or Merely Draw Unwanted Attention?

Larger cosmetics companies are lining up in support of the Personal Care Products Safety Act ("the Act"), a draft bill that would create a mandatory compliance and reporting framework under the Food and Drug Administration (FDA). Why would these companies be willing to embrace more regulation (and the costs that come with it) from the FDA? The answer may be simple: larger players in the industry see benefits from an upfront national compliance regime. The logic is that not only would a new, uniform law help build consumer confidence in the industry, but it may protect the industry from the growing web of state regulatory efforts. Yet, on second blush, that logic might need a slight makeover.

The FDA defines a "cosmetic," as a product, including the raw materials used as ingredients, "intended to be applied to the human body for cleansing, beautifying, promoting attractiveness or altering the appearance without affecting the body's structure or functions." In the U.S., the cosmetics industry is growing, has significant participation by large multinational companies, and by some accounts, earns more than $56 billion in annual revenues.

Traditionally, the FDA has focused enforcement efforts on food and drugs, and more recently, dietary supplements. With the cosmetics industry, the FDA has taken a softer approach. The majority of FDA actions in cosmetics has consisted of sending warning letters when products marketed as cosmetics make drug-like claims (i.e., that the product can cure or prevent disease, or otherwise affect the structure or function of the body). The cosmetics most often cited by the FDA for allegedly making claims that cross over into the realm of drugs are anti-aging and wrinkle-reducing products.

The allure of the Act for large manufacturers would seemingly be that once the FDA determines that a cosmetic ingredient or nonfunctional constituent is safe, the manufacturer would be in the clear, and could thus avoid potentially more onerous state law requirements. Yet, when put under a magnifier, that notion probably conceals a deeper reality. Only those laws in areas directly addressed by the Act would be preempted; including the determination of safety, the requirements for registration, good manufacturing practices, mandatory recalls, and adverse event reporting. The Act does not preempt laws already in effect when the Act is passed.

The Act will not prevent a State AG or FTC investigation into deceptive practices, nor will it stop lawsuits from advocacy groups or the plaintiffs' contingency bar, as it expressly does not preempt lawsuits based in product liability, and a host of other common law legal doctrines. As we learned from the Supreme Court's decision in POM Wonderful, FDA regulatory primacy will not insulate cosmetics producers from actions brought by competitors under other federal statutes, including the Lanham Act. In addition, if the wave of class action food lawsuits in recent years is any lesson, the new law might, at least, in the short term, lead to increased scrutiny of cosmetics marketing practices and greater numbers of class action lawsuits.

State AGs continue to show increased interest in consumer products, including cosmetics, with recent investigations into dietary supplements, drug company practices, and bath products, among others. Similarly, State AGs are also taking a greater role in pushing legislation on consumer issues where the federal government is silent. The recent Vermont law on genetically engineered food labels is a good example of the power of an AG to propose and follow through on a legislative issue with a consumer focus.

For larger cosmetics businesses, the Act puts forth compliance requirements that are only minimally abrasive, easily addressed by in-house experts and outside counsel. For smaller producers, many of which oppose the bill, the effects of the Act could be more invasive. A closer analysis of the Act, however, might lead all cosmetic companies to question its benefits overall. Will an additional layer of regulation bring forth a healthier, more vibrant industry, or will it only draw unwanted regulatory attention?

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