Beauty Store Business magazine - December, 2019

Ramping Up Regulations: FDA Regulations in Beauty

Learn about the latest legislative pushes for increased FDA regulation of personal care products.

In October 2017, Beauty Store Business reported on two pieces of legislation: the Personal Care Products Safety Act, introduced in April 2015 by Sens. Dianne Feinstein (D-California) and Susan Collins (R-Maine), supported by the Environmental Working Group (EWG); and H.R. 575, the Cosmetic Modernization Amendments of 2017, introduced by Rep. Pete Sessions (R-Texas), supported by the Independent Cosmetic Manufacturers and Distributors Association (ICMAD). Both were designed to help ensure consumers’ safety by increasing U.S. Food and Drug Administration (FDA) oversight of the personal care products industry.

With Sessions having lost reelection, H.R. 575 proved to be a nonstarter, but a new bill is now being formulated in the House. “So far this year, only one bill has been introduced, the Feinstein-Collins Bill, S.726, the Personal Care Products Safety Act,” explains Sharon Blinkoff, New York-based senior counsel for the Locke Lord law firm. “Meanwhile, still in the drafting stage, the House Energy and Commerce staff has been working on a bill with the working title the ‘Cosmetic Safety Enhancement Act of 2019.’”

A BRIEF HISTORY

Los Angeles-based Ronie Schmelz, counsel for the Tucker Ellis law firm, notes that the Food, Drug and Cosmetic Act of 1938 led to federal regulations that still govern the cosmetics industry today. “The other legislation is the Fair Packaging and Labeling Act [passed in 1967], which deals with labeling,” Schmelz adds. “Those two were designed to comprehensively reexamine the extent to which cosmetics are regulated, increasing regulation for those companies.”

Fortunately, Blinkoff stresses, cosmetics have the best safety record of any class of products regulated by the FDA, including drugs and medical devices, which undergo rigorous FDA review, as well as foods and dietary supplements. “While the press has focused on the safety of cosmetic ingredients, most of the ingredients used in cosmetic products are also used in products that have been subject to safety review by the FDA, either based on use in drug products or other FDA programs that require FDA pre-market review,” Blinkoff says. “Both the Feinstein-Collins bill and the draft bill are modeled after the Food Safety Amendments, legislation to address significant health risks in the food industry created by foodborne illnesses, which struck some 48 million Americans, hospitalizing hundreds of thousands and killing hundreds of thousands.”

Blinkoff explains that the Food Safety Amendments provided the FDA with greatly enhanced oversight authority over the food industry, including dietary supplements. For example, all food facilities (including warehouses in the food distribution chain) were required to register with the FDA, which was also granted the authority to immediately stop distribution of food that was suspected to create an undue risk, without having to institute litigation. The FDA was given enhanced inspection rights, and the right to order recalls. The act also required food facilities to adopt stringent good manu- facturing practices (GMPs), along with import supplier verification. “While the Food Safety Amendments granted the FDA far greater oversight, health and safety issues in the food industry continue to be a problem,” Blinkoff laments. “If passed, both the Senate bill and the House draft would significantly enhance the FDA’s authority over cosmetics–and would wind up regulating cosmetics more stringently than most over-the-counter drugs.”

WHAT’S AT STAKE?

The EWG notes that, with the exception of color additives, the FDA “lacks the power and resources to review the safety of chemicals in cosmetics .... Under current law, cosmetic companies do not have to register with the FDA, submit cosmetic ingredient statements, adopt GMPs, provide access to safety records or report serious adverse events like hospitalization when they occur. The FDA also lacks the authority to quickly suspend production or recall contaminated products when a company fails to initiate a voluntary recall. By contrast, food, prescription drug, over-the-counter drug and medical device manufacturers are subject to almost all of these basic consumer protection rules.”

Therefore, the Personal Care Product Safety Act is designed to address those issues. EWG offers a summary of some key elements of the bill:

• Personal care product companies register facilities and cosmetic ingredients with the FDA. • Companies disclose the ingredients they use and attest that they have safety records for their products.
• Companies must report serious adverse events (such as infections that require medical treatment) to the FDA within 15 days from the time of occurrence, and an annual summary of all reported adverse events (including less serious reactions, such as rashes).
• Specific labeling and warnings may be required for some products that contain ingredients not suitable for the entire population, such as “for adult use only” or “for professional use only.”
• Websites selling cosmetics must include full labeling information, including ingredients and any warnings.
• The FDA will collect data and information on at least five ingredients per year and determine their levels of safety, including determining how much of the ingredient may be used, and if it should be restricted to only certain types of products (e.g., not for use in children’s products).
• The FDA may order a recall if a product is likely to cause serious harm and the company refuses to do a voluntary recall.
• The FDA will issue regulations that outline GMPs–how companies should safely manufacture personal care products.

The Personal Care Products Safety Act is supported by EWG and others: manufacturers like Beautycounter, Estée Lauder Essie and Elizabeth Arden, as well as organizations such as The Handcrafted Soap and Cosmetic Guild, March of Dimes and the American Academy of Pediatrics.

The House draft bill, introduced by Reps. Frank Pallone Jr. (D-New Jersey) and John Shimkus (R-Illinois), contains many similarities, according to Schmelz, but some key differences. “Both bills would require manufacturers and those processing cosmetic products to register those facilities with the FDA,” she reports. “One slight difference in the House draft is having facilities simply engaged in packaging and holding cosmetics to also register, whereas the Senate bill focuses on those manufacturing, processing and formulating cosmetic products.”

Schmelz also notes that, as both bills require the FDA to conduct safety reviews on particular cosmetic ingredients, five are identified in both: diazolidinyl urea, diethyl phthalate, methylene glycol/methanol formaldehyde, propylparaben and quaternium-15. “The FDA, during the fiscal year 2020, would look at and complete a safety review for these five ingredients, as well as nonfunctional constituents that have not previously been reviewed,” Schmelz explains. “It’s a base assessment by scientists that an ingredient is not harmful under recommended or safe suggested use–but also notes that the FDA can’t consider an ingredient or non- functional constituent harmful just because it causes minor adverse reactions, like transient allergic reactions or skin irritation in some users.”

Finally, both bills address animal testing. “The Senate bill says it’s the ‘sense of the Senate’ that animal testing should not be used, with exception of appropriate allowances,” Schmelz notes. “The House draft goes into more detail, encouraging use of alternative testing–and encouraging the FDA to issue guidance for scientific and reliable alternatives to animal testing.”

Photo by Giammarco Boscaro on Unsplash

STICKING POINTS

This proposed additional oversight by the FDA comes with a cost–to the tune of $20.6 million, expected to be paid by the beauty industry itself in the form of fees from manufacturers, in a tiered structure. “They’re looking to generate revenue from the industry, depending on gross annual sales,” Schmelz says. “So, if revenue is $2 to $3 billion, the fee is $610,000; between $20 million and $40 million, there’s a $12,000 fee–that’s in the Senate bill. The House bill has a slight variation: The top fee in the Senate bill is $1.35 million; in the House bill, it’s $1.1 million.”

Blinkoff supports some level of modernization, such as better reporting and GMPs, but is concerned about those fees negatively affecting smaller businesses–or, indeed, preventing them from ever coming to market at all. She wonders how those fees will be passed on to the con- sumer in terms of higher prices on the shelves. “The common position asserted to argue that the FDA has not been diligent and our cosmetic ingredients are not safe is that the EU has banned thousands of ingredients, and the FDA has banned only a few ingredients,” Blinkoff says. “But most of the EU banned ingredients (like rocket fuel) have never been used in cosmetic products.”

However, the EWG asserts that the FDA “will be required to provide technical assistance and additional flexibility for smaller companies to comply with the law. Domestic businesses selling under $500,000 in cosmetics products (or under $1 million if producing in a private residence) are exempt from registration, while domestic businesses between $500,000 (or between $1 million if producing in a private residence) and $2 million in sales have a simplified registration process.” Finally, the EWG notes, “business size is determined based on the previous three-year average, giving small businesses time to adjust as they grow.”

Meanwhile, ICMAD doesn’t support mandatory recall authority. “Their view is that the FDA can’t recall OTC drugs, so why can they in cosmetics?” Schmelz says. “Plus, ICMAD is concerned about fees–would they be a barrier to entry for a lot of companies? With fees and new registration requirements, would we never have the Murads and Perricones, who started small? Would it hinder them to establish themselves and get a foothold in the market? A lot of mom-and-pop businesses starting in their garage might not know the laws or realize they’re in violation.”

Finally, Blinkoff opines, any proposal should include strong federal preemption. “Simply put, federal preemption means that no state would be permitted to impose different ingredient or product safety requirements, product labeling requirements, or registration or manufacturing requirements, or levy registration fees on cosmetic products,” Blinkoff explains. “So there would be no more separate state legislation like California’s Prop 65, or like the state microbead legislation that sought to create different regulatory schemes for microbeads on a state- by-state basis, which led to the passage of one federal rule on banning microbeads.”

Schmelz agrees that ICMAD won’t support any bill without clear and strong preemptions, to prevent a patchwork of different laws in different states. “Personally, I think that’s unlikely to ever occur, but funding is an issue as well; are these fees the right number for smaller businesses?” she says. Still, there might be a silver lining: “You have to look at the practical realities, but the two bills aren’t so far apart,” Schmelz says. “It wouldn’t take much, working in conference, to align them. The real question is whether in this session they can get this through and get it signed by the president, with everything else going on in our country.”