New Legislation Could Have a Major Impact on Cosmetics Industry

What retailers and suppliers need to know about the Safe Cosmetics Act of 2011.

Written By:
John Gay
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On June 24, Representatives Jan Schakowsky (D-IL), Ed Markey (D-MA) and Tammy Baldwin (D-WI) introduced the Safe Cosmetics Act of 2011, H.R. 2359. This is the second time that this trio of legislators has introduced a bill by this name, and the bill could potentially have a major impact on the cosmetics industry.

Upon introduction, all three members of Congress expressed their concerns about the current regulation of cosmetic products. Rep. Schakowsky expressed her worries that “manufacturers are not required to disclose all their ingredients on labels and the FDA has no power to supervise the use of toxic chemicals in cosmetics.” Rep. Markey stated his belief that “the Safe Cosmetics Act will close a gaping hole in the federal law that allows potentially toxic chemicals to remain in the cosmetic products we use every day.” And, Rep. Baldwin noted her hope that the act will be “critical to ensuring that personal care products do not compromise the health of workers and consumers.”

Now that this legislation has been re-introduced this year, here’s what suppliers and retailers need to know.

Current FDA Oversight
The regulations governing the safety of cosmetics fall under the Federal Food, Drug and Cosmetic Act as well as the Fair Packaging and Labeling Act. Clearly, the industry is far from unregulated. Under these laws, cosmetic firms are responsible for ensuring that their products are safe and legal before they are sold. The Food and Drug Administration (FDA) Office of Cosmetics and Colors is responsible for evaluating the safety of these cosmetic products once they are on the market. That office does have some tools to ensure that cosmetics facilities as well as the products themselves are safe and legal.

FDA operates the Voluntary Cosmetic Registration Program (VCRP) and encourages cosmetic manufacturers to register their formulations with the VCRP, although the firms are not legally required to do so. In addition, FDA can take action against firms that the agency determines are selling adulterated or misbranded products through the Department of Justice in the federal court system. FDA can and does inspect cosmetics facilities to ensure proper practices and controls are in place. Finally, FDA does perform post-market testing to ensure that products are safe and correctly labeled.

What the New Law Would Do
The legislation enacts new requirements for cosmetics firms while giving additional enforcement tools to FDA. Some of the proposed provisions include mandatory registration for cosmetics manufacturers with annual sales receipts of cosmetic products that exceed $2 million as well as registration fees that would be levied on manufacturers with more than $10 million in gross receipts or sales of cosmetics. Manufacturers also would be subject to new labeling requirements that would entail listing the name of each ingredient, including contaminants, along with special rules for nanomaterials.

In terms of additional powers for FDA, the new bill would establish a list of prohibited chemicals, require mandatory reporting of adverse health effects and grant mandatory recall authority to FDA. In addition, the bill would direct the Secretary of Health and Human services to monitor developments in the use of nanomaterials in cosmetics. If the legislation is enacted, it would be the first change to the regulation of cosmetics since 1938.

From 2010 to 2011
While the intent and spirit of the legislation remain the same, there are some major changes in the current bill. One addition is the provision that would require the Secretary of Health and Human Services to establish good manufacturing practices (GMPs) for cosmetics and ingredients. In addition, the legislation changes the definition of a contaminant and whether a contaminant must be disclosed on the label.

Many of the changes in this bill show that legislators took into account some of the concerns that were expressed about last year’s version. The new legislation establishes a special category of manufacturer called a “microbusiness.” It is defined as a cosmetics manufacturer “that has annual sales receipts for cosmetic products that do not exceed $2 million.” These businesses are exempt from registration as well as the accompanying registration fees. Also, the threshold for incurring fees went from $1 million to $10 million in sales.

Potential Impact
As might be expected, advocates for the bill and those who oppose it disagree on the positives and negatives. Clearly, consumer safety should always be the first priority, and that is the primary intent behind the bill. The additional powers that would be given to FDA would no doubt promote consumer safety and safe products.

One cannot help but see many parallels between the Safe Cosmetics Act and the recent Food Safety Modernization Act; but, this also raises many of the same concerns. With a current proposal to reduce the FDA budget, it remains to be seen whether the agency will have adequate resources to utilize its new powers. While some may argue that the registration fees will defray the cost, it is unclear whether this will be the case.

Beyond funding, there are also concerns about the impact that these new requirements would have on business. The full disclosure of product information would be an incredibly onerous process for companies. In addition, it creates potentially serious intellectual property concerns. The bill explicitly states, “an ingredient required to be listed or labeled under this section shall not have protection as a trade secret.” Overall, the requirements will potentially increase costs for cosmetic companies. This could result in increased prices that will not only harm domestic consumers, but also reduce the global competitiveness of U.S. cosmetics companies.

NPA Activities
The Natural Products Association (NPA) has been actively engaging its membership in discussions about the potential impact of this bill. NPA is committed to ensuring that natural cosmetic makers are not unduly burdened by the legislation.

As always, NPA remains committed to the natural cosmetics industry through the NPA Standard and Certification for Personal Care Products. The seal program ensures that consumers know that products with the NPA Natural Seal have been deemed truly natural by a third-party audited system. Learn more at www.TheNaturalSeal.org.

John Gay is the executive director and CEO of the Natural Products Association (NPA).

Published in WholeFoods Magazine, September 2011