2023 — The Year “Modernization” Comes to the U.S. Cosmetics Industry

Is the cosmetic industry ready for 2023? While there have been years of considering the implications of a more comprehensively regulated industry, 2023 is the year that such regulation starts to become a reality. On December 23, 2022, Congress passed the Food and Drug Omnibus Reform Act of 2022 as part of the Consolidated Appropriations Act of 2023, which was signed into law by President Biden on December 29, 2022. Included in the Omnibus Reform package is the Modernization of Cosmetics Regulation Act of 2022 (MOCRA), which brings cosmetics more in line with other Food and Drug Administration (FDA)–regulated consumer products. It is now time for the cosmetics industry to ready itself for developing pharmacovigilance systems, facility registration and product listing, good manufacturing practices, and FDA’s new mandatory recall authority.

Pharmacovigilance

For the first time, cosmetic companies are required to report to FDA any “serious adverse event” associated with the use of a cosmetic product in the United States. Significantly, “serious adverse events” include:

• death,
• life-threatening experience,
• inpatient hospitalization,
• persistent or significant disability or incapacity,
• congenital anomaly or birth defect,
• infection, or
• significant disfigurement (including serious and persistent rashes, 2nd or 3rd degree burn, significant hair loss, or persistent or significant alterations of appearance) other than as intended, under conditions of use that are customary or usual; or

requires, based on reasonable medical judgment a medical or surgical intervention to prevent an outcome described above.

Such report must be made no later than 15 business days after the report is received by “the responsible person” (i.e., the manufacturer, packer or distributor whose name appears on the product label). Cosmetic companies are also required to submit to FDA “new and material medical information” related to a serious adverse event report received by the company within one year of the initial report. Product labels will be required to bear a domestic address, domestic telephone number, or electronic contact information through which consumers can report adverse events to the company.

As the over-the-counter (OTC) drug and dietary supplement industries know from the passage of the Dietary Supplement and Nonprescription Drug Consumer Protection Act of 2006, establishing a strong pharmacovigilance program takes time and resources, particularly where a company markets a substantial line of products across multiple channels. In particular, social media platforms can be an important forum through which companies become aware of alleged adverse events associated with their products, although obtaining comprehensive and reliable information from such platforms is challenging. Clear and comprehensive pharmacovigilance policies and procedures must to be established to implement these new requirements, as will a robust training program for employees and, potentially, agents of the company. The good news is that the OTC and dietary supplement industries were required to implement similar requirements in 2006, so there are good roadmaps to lean on. The new law also provides for the maintenance of adverse event records and gives FDA inspection authority over such records. Consequently, it is important to train employees on managing FDA pharmacovigilance inspections.

Good Manufacturing Practice

MOCRA requires that FDA establish good manufacturing practices (GMPs) for cosmetic products. Of note, the law mandates that prior to issuing such regulations, the Secretary of Health and Human Services must “consult with cosmetic manufacturers, including smaller businesses, consumer organizations, and other experts.” FDA has three years from enactment of this law to develop GMPs applicable to the industry, including considerations based on the size and scope of businesses manufacturing cosmetics and flexibility in addressing different sizes and types of facilities. While FDA issued a draft GMP guidance document in June 2013 providing its view on manufacturing practices that cosmetic companies should consider, the new regulations will likely add rigor, as the concerns for product safety underpinned the cosmetic provisions in MOCRA. It is imperative that cosmetic companies engage with FDA before and during the GMP rulemaking to ensure that FDA’s regulations are necessary and meaningful to manufacturing a safe, nonadulterated cosmetic without being unduly burdensome.

Historically, cosmetic manufacturers have not been subject to GMPs. As dietary supplement companies learned when supplement GMPs were first implemented in 2008, establishment of GMP practices and procedures is often more challenging and time-consuming than anticipated. Thus it is important for cosmetic manufacturers to start preparing now for GMP regulations, using the 2013 draft guidance as a starting point. This can include procedures, training, and third-party assessments to identify potential gaps.

Facility Registration and Product List

MOCRA mandates registration of facilities that manufacture or process cosmetics for distribution in the United States. Similarly, cosmetic products must be listed with FDA. Products marketed on the date of MOCRA enactment have one year to list their products with FDA. Products first marketed after enactment must be listed within 120 days of marketing. Product listing must include, among other things, a list of all product ingredients, including fragrances, flavors, and colors, and updates are required annually.

While registration and listing may seem purely administrative, FDA has the authority to inspect all registered facilities; the law provides FDA with the ability to suspend facility registrations in certain limited situations. As with the mandatory drug listing of OTC drugs, the cosmetic product listing will afford FDA easy access to a list of marketed cosmetic products with detailed information about those products. Interestingly, FDA has sought this authority from Congress for dietary supplements for years, to no avail, so the cosmetic industry will now be providing more information to FDA about its topically applied products than the dietary supplement industry currently does for its ingested products.

Other Issues

While the industry gained a preemption provision in MOCRA, with some carveouts for state laws such as California Prop 65, MOCRA also includes a number of specific new regulatory obligations, including requirements for the maintenance of safety substantiation files and the labeling of fragrance allergens included in a cosmetic product. In connection with the safety substantiation provisions, Congress has defined the types of studies necessary and provided a definition of a “safe” cosmetic. Establishing a safety substantiation policy to address these new requirements before FDA requests documents under these provisions will be essential to avoid compliance issues with the agency. Last, it is worth noting that MOCRA states “[i]t is the sense of the Congress that animal testing should not be used for the purposes of safety testing on cosmetic products” and that such testing should be phased out “with the exception of appropriate allowances.” It remains to be seen how FDA interprets this provision and how the use of animal testing evolves over time.

The MOCRA provisions cover a broad sweep of new obligations. Sidley’s Food, Drug and Medical Device practice group is available to assist our cosmetic clients with the development of the policies, procedures, and training to implement these and other important MOCRA obligations.