On December 29, 2022, President Biden enacted the “Modernization of Cosmetic Regulation Act of 2022,”¹ a pivotal piece of legislation that mandates enhanced oversight by the Food and Drug Administration (FDA) regarding cosmetics and their ingredients. This GT Alert highlights the essential aspects of the law, including the timelines set for FDA actions and enforcement measures. The new regulations introduce requirements that could lead to an uptick in consumer litigation related to cosmetic safety and compliance. This alert offers a comprehensive summary of the Act’s provisions but does not serve as legal counsel. Many stipulations will require regulatory actions to be implemented by specified deadlines outlined in the Act.

Additionally, the new law encompasses amendments that alter existing FDA regulations. Notably, it addresses advancements in drug manufacturing practices and reauthorizes critical FDA programs, including the Humanitarian Device Exemption Incentive, the Best Pharmaceuticals for Children Program, and the Reauthorization of Orphan Drug Grants. Furthermore, there are significant changes pertaining to biologics and drugs, along with modifications to the amendments concerning the Save Medical Device regulations. For a deeper understanding of the potential litigation ramifications stemming from this new law, please refer to this GT Alert published by the Pharmaceutical, Medical Device & Health Care Litigation Practice.

Understanding the Modernization of Cosmetic Regulation Act of 2022 (MoCRA)

The MoCRA legislation introduces a structured process for cosmetic regulation, akin to that of other FDA-regulated items, ensuring that cosmetic manufacturers can provide proof of the safety of their products. This GT Alert serves as a resource for understanding these new stipulations, including effective dates for certain regulatory and compliance requirements. The Act delineates responsibilities for the “responsible person,” which encompasses manufacturers, packers, or distributors of cosmetics, as well as those whose names appear on product labels, thereby establishing clear accountability in the cosmetic supply chain.

MoCRA is specifically applicable to importers and entities engaged in the manufacturing or processing of cosmetic products. It does not extend to various entities unless they are involved in the importation, manufacturing, or processing of cosmetics. This includes beauty salons, cosmetic retail stores, distribution centers, pharmacies, hospitals, physicians’ offices, health care clinics, public health agencies, non-profit organizations, and entities that merely provide complimentary cosmetic products. Furthermore, trade shows and other venues offering free samples, as well as entities solely focused on research, are also excluded from this regulation.

Defining Key Terms in Cosmetic Regulations

Good Manufacturing Practices: The secretary of the Department of Health and Human Services (HHS), through the FDA, will draft and finalize regulations to establish Good Manufacturing Practices. These regulations are designed to ensure that cosmetic products are not adulterated and will empower the FDA to conduct inspections to verify compliance. The proposed rulemaking must occur no later than two years after the enactment date (December 29, 2022), with final regulations expected to be established within three years of that date.

Adverse Events: An adverse event is defined as any health-related incident linked to the usage of a cosmetic product.

Serious Adverse Event: This term refers to any occurrence resulting in death, life-threatening situations, hospitalization, significant disability, congenital anomalies, or infections that cause severe disfigurement. It also encompasses events that necessitate medical or surgical interventions to prevent outcomes described in the serious adverse event definition.

Process for Reporting Adverse Events: In accordance with regulations set forth by the HHS secretary, the responsible person must submit a report within 15 days of an adverse event and may provide supplemental information within one year. Reports related to serious adverse events are akin to other safety reports and may include public statements (excluding personal health details). The HHS secretary can exempt certain reports that do not represent significant public health concerns. Responsible parties are required to maintain records for six years, or three years for small businesses. Notably, the submission of any report should not be interpreted as an admission that the cosmetic product was responsible for the adverse event.

• Fragrance and Flavor Ingredients: If an ingredient has been implicated in a serious adverse event, the HHS secretary can request a list of such ingredients, which must be provided within 30 days of the request.

• Safety Substantiation: Manufacturers must maintain records that demonstrate adequate substantiation of the cosmetic product’s safety. Adequate substantiation entails tests, studies, or other forms of evidence that confirm a reasonable certainty of the product’s safety.

Inspection Protocols: The responsible entity is required to grant access to an officer or HHS employee, who is credentialed, for inspecting records, manufacturing processes, and other related issues.

Registration and Product Listing Requirements: Cosmetic manufacturers must complete their registration no later than ONE YEAR AFTER ENACTMENT (December 29, 2022). New facilities are required to register within 60 days of operation or by the specified deadline. Registrations must be renewed biennially, and any updates or changes should be reported within 60 days. The registration information must comply with the law’s outlined requirements, including listing all cosmetic products imported, manufactured, or processed, detailing product categories, ingredient lists (including fragrances, flavors, or colors), and any assigned product listing numbers. A degree of flexibility is provided for listing multiple products with identical formulations or variations in colors, fragrances, and flavors. Annual updates must also be submitted. The FDA will safeguard confidential information included in registration requests.

The HHS secretary has the authority to suspend a cosmetic entity’s registration if there is a reasonable probability that a product is causing serious adverse health effects or fatalities, particularly if there are concerns that related products may also pose risks. The secretary will provide notice of suspension and allow five days for corrective action, or a hearing may be conducted. The outcome may result in the suspension being upheld or the registrant being required to submit a corrective action plan to rectify the issues. This plan will be reviewed within 14 business days, or another mutually agreed timeline. If the suspension is lifted by the secretary, the FDA will restore the registration. If a facility is under suspension, no one is permitted to distribute or deliver cosmetic products from that facility in the United States. The secretary can delegate this authority only to the FDA Commissioner.

Labeling Standards for Cosmetic Products: Each cosmetic product must feature a label that includes a domestic address, a domestic phone number, or electronic contact information. The following labeling requirements must also be met:

• Fragrance Allergens Disclosure: The responsible party must clearly identify each fragrance allergen included on the product’s label. The HHS secretary is expected to propose a rule by June 29, 2024, which is 18 months after the enactment date, with a final rule to be established 180 days after the public comment period concludes. The secretary will take into account international, state, and local requirements regarding allergen disclosure and threshold levels.

• Professional Use Cosmetic Products: A professional is defined as an individual licensed by a state authority to practice in cosmetology, nail care, barbering, or esthetics.

• Professional Use Labeling Requirements: A cosmetic product intended solely for professional use and introduced into interstate commerce must bear a label containing a clear and prominent statement indicating that it is to be administered only by a licensed professional, complying with all relevant cosmetic labeling requirements.

Record-Keeping Obligations: Records must be made available to authorized personnel for examining products if there is reason to suspect that a cosmetic product is adulterated or contains harmful ingredients. Authorized personnel must provide written notice to access records at a reasonable time to ascertain whether the product poses a risk. However, the records reviewed do not include recipes or formulas for cosmetics, financial information, pricing data, personnel details (except qualifications), research data (other than safety substantiation), or sales data (except shipment data related to sales).

Mandatory Recall Authority for Unsafe Cosmetics: If the HHS secretary determines that there is a reasonable probability that a cosmetic product is adulterated or misbranded, leading to serious adverse health consequences or death, the secretary must provide the manufacturer with the opportunity to voluntarily cease distribution and recall the product. Should the entity refuse or fail to execute the recall within the specified timeframe, the secretary has the authority to prohibit further distribution of the product.

• Hearing Protocol for Recalls: A hearing may be conducted no later than 10 days following the issuance date. The law provides a resolution process to either mandate the recall of the product and halt distribution based on the evidence presented or allow the product to continue distribution. Notifications to affected individuals may be required in such situations.

• Public Notification Process for Recalls: In the event of a recall, a press release must be issued, alongside alerts and public notices as deemed appropriate. The materials must detail the cosmetic’s name, describe the associated risks, and, whenever feasible, provide consumers with information about similar cosmetics that are not impacted by the recall. Additionally, the FDA website must feature an image of the recalled cosmetic. Authority for this notification can only be delegated to the Commissioner of the FDA.

• Rule of Construction Regarding Recalls: This section does not interfere with the secretary’s authority to request or engage in a voluntary recall or to issue orders for cessation of distribution or recall under any other provisions of this chapter.

Small Business Exemptions in Cosmetic Regulations: Responsible persons and owners or operators of facilities whose gross annual sales of cosmetic products in the United States for the previous three years are less than $1,000,000 are classified as small businesses, exempting them from certain Good Manufacturing Practices, registration, and listing requirements.

• Specific Exemptions for Small Businesses: The small business exemptions do NOT apply to (1) cosmetic products that come into contact with the mucus membrane of the eye under normal usage conditions; (2) products that are injected; (3) products intended for internal use; or (4) products designed to alter appearance for more than 24 hours under customary usage conditions, where removal by the consumer is not part of those conditions.

Preemption of State Cosmetic Regulations: No state or political subdivision may establish laws, regulations, orders, or other requirements for cosmetics that differ regarding registration, product listing, good manufacturing practices, records, recalls, adverse event reporting, or safety substantiation. However, states are permitted to prohibit the use of certain ingredients in cosmetic products or maintain requirements that were in effect at the time of enactment.

• Savings Clause for State Actions: The amendments shall not be interpreted to modify, preempt, or displace any legal actions for damages or liabilities under state law, whether statutory or based on common law.

Regulations for Talc-Containing Cosmetics: The HHS secretary is mandated to propose regulations one year after December 29, 2022, and finalize the rules within 180 days post-comment period to establish testing protocols for detecting asbestos in talc products.

(1) Within one year following the enactment of this act, the secretary is required to develop proposed regulations that mandate standardized testing methods for detecting and identifying asbestos in talc-containing cosmetic products, and

(2) No later than 180 days after the public comment period on the proposed regulations concludes, the secretary must issue the final regulations.

Assessment of PFAS in Cosmetics: The HHS secretary will evaluate the utilization of perfluoroalkyl and polyfluoroalkyl substances (PFAS) in cosmetic products and the scientific evidence surrounding their safety, including associated risks. The secretary may collaborate with the National Center for Toxicological Research to gather comprehensive data. A report summarizing the assessment findings must be published no later than three years after enactment.

Congressional Stance on Animal Testing: Congress expresses the view that animal testing should not be employed for the safety testing of cosmetic products and should be phased out, allowing for limited exceptions where necessary.

Funding Allocations for Cosmetic Regulation: The new legislation designates $14,200,000 for 2023, $25,960,000 for 2024, and $41,890,000 for the years 2025 through 2027 for these regulatory activities. Notably, the law does not impose any industry user fees.

Important Footnotes on Cosmetic Regulation Changes

¹ This legislation was included in H.R. 2617, the “Consolidated Appropriations Act, 2023,” as part of a comprehensive year-end legislative package.