The MCRA significantly expands the FDA’s rulemaking and enforcement authority over cosmetics and closes a number of gaps in the existing regulatory framework.

On December 23, 2022, Congress significantly expanded the FDA’s regulatory authority over cosmetics as part of its year-end Consolidated Appropriations Act of 2023, the first major statutory change to the Food, Drug and Cosmetics Act (FDCA) regarding the regulation of cosmetics since the FDCA’s enactment in 1938.

Passed with bipartisan support and garnering industry approval, the Modernization of Cosmetics Regulation Act (MCRA) amends Chapter VI of the FDCA and contains a number of key provisions, requirements and dates for compliance, as summarized below.

Expanded Agency Rulemaking Authority

The MCRA requires the FDA to develop and issue regulations regarding:

• Good manufacturing practice regulations consistent with national and international standards by 2024, with a final rule no later than 2025;
• Identification of fragrance allergens that must be disclosed on cosmetics labels and the format for disclosure, in line with EU and other international requirements; and
• Standardized testing methods for detecting and identifying asbestos in talc-containing products in 2023, with a final rule no later than 180 days after the close of the public comment period for the proposed rule.

The MCRA further requires the FDA to publish a report no later than 2025 assessing the use of per- and polyfluoroalkyl substances (PFAS) in cosmetics and safety risks associated with such use.

Expanded FDA Enforcement Authority

The MCRA grants the FDA mandatory recall authority (FDCA Section 610) over cosmetics when the agency determines:

• There is a “reasonable probability” that a cosmetic is adulterated or misbranded under the FDCA;
• Use or exposure to the cosmetic will cause serious adverse health consequences or death; and
• The responsible individual or entity has refused to voluntarily recall the product or cease distribution.

The MCRA will allow the FDA to suspend facility registration if the agency determines that a product manufactured at that facility has a “reasonable probability” of causing serious adverse health consequences and that other products manufactured by the facility may be similarly affected (FDCA Section 607). Suspended facilities will be entitled to notice and an opportunity for a hearing to determine whether the suspension is necessary and, if so, will be required to develop corrective action plans.

The MCRA also authorizes the FDA to access certain records pertaining to product safety and request a list of ingredients in a product’s fragrances or flavors if it has reason to believe that a fragrance or flavor contributed to a serious adverse event (FDCA Section 610).

Mandatory Requirements for Manufacturers, Packers and Distributors

In addition to expanding the FDA’s regulatory and enforcement authority, the MCRA imposes a number of significant new requirements on a “responsible person,” defined as cosmetics manufacturers, packers and distributors in accordance with Section 609(a) of the FDCA or Section 4(a) of the Fair Packaging and Labeling Act. These include:

• Facility registration for any facility that manufactures or processes cosmetic products intended for sale in the U.S.—irrespective of whether the facility is located in the U.S.—within one year of the MCRA’s enactment for existing facilities, and for new facilities, the later of 60 days after commencement of manufacture or 60 days after the deadline for existing facilities (FDCA Section 607);
• Product and ingredient listing, including location of manufacture, effective within one year of the MCRA’s enactment for existing products, and for new products, within 120 days of marketing (FDCA Section 607);
• Updated cosmetic labeling requirements, including identification of contact information for adverse events on product labels effective two years after the MCRA’s enactment; identification of fragrance allergens on product labels consistent with the FDA’s new regulations; and updated labeling requirements for products intended for professional use, including a notice that only a licensed professional may use the product, effective one year after the MCRA’s enactment (FDCA Section 608);
• Maintenance of records “adequate[ly] substantiat[ing]” product safety (FDCA Section 608); and
• Maintenance of records documenting adverse events for six years (or three years for some small businesses) and reporting of “serious adverse events” to the FDA no later than 15 days after the date of learning of the incident, with the definition of “serious adverse event” expanded to include infection or “significant disfigurement (including serious and persistent rashes, second- or third-degree burns, significant hair loss, or persistent or significant alteration of appearance), other than as intended, under conditions of use that are customary or usual.” (FDCA Section 605)

Other Notable Provisions

Other notable provisions of the MCRA include the following:

Preemption

The MCRA preempts state and local requirements differing from the updated federal framework relating to:

• Cosmetic product establishment registration and product listing;
• Good manufacturing practice;
• Recordkeeping;
• Recalls;
• Adverse event reporting; and
• Safety substantiation.

However, the MCRA does not block states from prohibiting or limiting the amount of an ingredient in a cosmetic product or continuing any state requirements regarding ingredient reporting that are in effect at the time of the MCRA’s enactment, such as California’s Proposition 65 (FDCA Section 614).

Cosmetics Containing Active Pharmaceutical Ingredients or Making “Drug” Claims

The MCRA clarifies that for products considered both a drug and a cosmetic under the FDCA (what as sometimes colloquially referred to as “cosmeceuticals”), drug requirements of Chapter V of the FDCA apply instead of the cosmetic requirements of Chapter VI, except with regard to fragrance allergen disclosure and professional use labeling requirements discussed above. The MCRA does not alter the legal framework that cosmetics that contain active pharmaceutical ingredients are drugs. It also does not change the legal framework that cosmetics making drug claims such as structure function claims will be deemed drugs. 

CBD or Other Hemp-Derived Products

The MCRA does not address or alter the existing regulatory framework with respect to products containing CBD or other hemp-derived products.

Animal Testing

The MCRA did not prohibit or otherwise restrict the use of animal testing for cosmetics. However, the MCRA does state, “It is the sense of the Congress that animal testing should not be used for the purposes of safety testing on cosmetic products and should be phased out with the exception of appropriate allowances.”

Small Business Accommodations

The MCRA exempts small businesses, defined as owners and operators whose average gross annual domestic sales for the previous three years is less than $1 million, from the requirements pertaining to good manufacturing practices and establishment registration and product listing, with the exception of those that manufacture the following products:

• Injectables;
• Cosmetics intended for internal use;
• Products that alter appearance for more than 24 hours under normal use; or
• Products that regularly come into contact with the mucus membrane of the eye.

Appropriations

Notably, the MCRA does not impose industry user fees. Instead, Congress appropriated to FDA $14.2 million for fiscal year 2023, $25.96 million for fiscal 2024 and $41.89 million for each of fiscal years 2025 through 2027 for developing regulations and performing the other activities under the MCRA.

Regulation of Advertising

The MCRA does not alter the relationship between the Federal Trade Commission and the FDA regarding the regulation of the advertising and promotion of cosmetics.

Conclusion

The MCRA significantly expands the FDA’s rulemaking and enforcement authority over cosmetics and closes a number of gaps in the existing regulatory framework.

The MCRA falls short of earlier legislative proposals, which would have authorized the FDA to conduct annual investigations into the safety of ingredients or, in certain cases, restrict or outright prohibit the use of ingredients like PFAS or so-called endocrine disrupters. Nor does the MCRA provide clarity with respect to cosmetic labeling issues, such as whether products are “clean,” “natural,” “nontoxic” or “cruelty-free,” which have been the subject of numerous class action complaints filed against cosmetics companies, or address so-called greenwashing or environmental impact concerns, which have been the focus of recent legislative attention in the EU and UK. The MCRA will not provide any guidance for companies seeking to avoid class action claims for alleged false claims and labeling.

However, the passage of MCRA puts cosmetics manufacturers, packers and distributors on notice that new rules and regulations are coming over the next three years—and the FDA will have authority to recall products and shut down facilities. Accordingly, companies should assess their systems to comply with the new requirements and be ready to implement changes to comply with new FDA rules.

One change to definitely be ready for: the standard testing for asbestos in talc-containing products. Companies should document their suppliers of talc and what representations are made regarding whether the talc is asbestos-free.

For More Information

If you have any questions about this Alert, please contact Alyson Walker Lotman, Lindsay Ann Brown, Kelly A. Bonner, any of the attorneys in our Products Liability and Toxic Torts Group, attorneys in our Fashion, Retail and Consumer Branded Products Industry Group, attorneys in our Life Sciences and Medical Technologies Industry Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.