For decades, the U.S. cosmetics industry has operated under relatively lenient standards, leading to varied implementations of safety and compliance measures. The Modernization of Cosmetics Regulation Act (MoCRA)—a response to growing demands for enhanced product safety and transparency and more stringent regulatory oversight—seeks to remedy these inconsistencies by enforcing standardized safety protocols and enhancing accountability with respect to cosmetic products sold in the United States.
Log in to view the full article
For decades, the U.S. cosmetics industry has operated under relatively lenient standards, leading to varied implementations of safety and compliance measures. The Modernization of Cosmetics Regulation Act (MoCRA)—a response to growing demands for enhanced product safety and transparency and more stringent regulatory oversight—seeks to remedy these inconsistencies by enforcing standardized safety protocols and enhancing accountability with respect to cosmetic products sold in the United States.
Yet, despite MoCRA’s efforts to clarify and standardize regulations, and even though its requirements have only been in effect for a handful of months, cosmetics companies have already started to encounter specific pitfalls that threaten their compliance status and expose them to potential legal (and even litigation) risks.
MoCRA’s Requirements for the Beauty Industry
MoCRA introduces a series of new regulatory requirements. Among other things, it gives the U.S. Food and Drug Administration (FDA) the power to require facility and product registration, recall products, mandate adverse event reporting and recordkeeping, and establish good manufacturing practices.
For many in the industry, MoCRA is leading to big changes in company policies, processes, and procedures. Companies that manufacture, pack, distribute and sell cosmetics in the United States are reevaluating how they substantiate product safety and efficacy, document and respond to customer complaints, and track products through distribution and sales channels.
Those who rely on third-party suppliers and/or contract manufacturers are also revisiting their contracts to confirm that there are tools in place to ensure MoCRA compliance.
Two Early MoCRA Compliance Challenges
Many of MoCRA’s obligations are assigned to the “Responsible Person”—“the manufacturer, packer, or distributor of a cosmetic product whose name appears on the product label.” In other words, the person or entity that introduces the cosmetic product onto the market.
One obligation is to prominently display the contact details of the Responsible Person on the product label. Another is to report to the FDA all serious adverse health events associated with a cosmetic product within 15 business days of receipt.
Both of these requirements are in effect and apply to all cosmetics companies, regardless of size (there are no exceptions for small businesses).
Two early pitfalls for cosmetic companies involve (A) the designation of a Responsible Person on cosmetic product labels and (B) the establishment of an effective adverse event reporting system.
(A) The Absence of a Designated Responsible Person on Product Labels.
The Responsible Person serves as the primary point of contact for regulatory inquiries and consumer complaints related to a cosmetic product.
Although MoCRA does not require the FDA to issue a proposed rule on fragrance allergen labeling until June 29, 2024, many companies overlook that their product labels fail to prominently display the physical address, phone number, or electronic contact for the Responsible Person—a requirement that is in effect now.
The absence of this contact information can severely hinder consumers’ ability to report adverse health events. It can also complicate a company’s process for investigating the potential health risks associated with its products and impede timely resolution and response.
This, in turn, increases the likelihood of regulatory penalties, reputational harm and damaged public trust.
(B) Inadequate Adverse Event Reporting Systems.
Identifying and reporting serious adverse events to the FDA within the timeframe specified by MoCRA requires a robust system for documenting, tracking, and investigating customer feedback.
Critical to any such system is (1) clear, accessible contact information on product labels; (2) straightforward instructions and user-friendly mechanisms for consumers who want to report adverse events; and (3) adequate training for employees so that they can identify and assess these reports as they come in.
However, many companies are finding that their existing policies, processes, and procedures are ill-equipped to facilitate effective communication, quick resolution, and timely reporting to the FDA.
The product labeling and adverse event reporting requirements outlined by MoCRA are not suggestions. They are legal obligations that apply to all cosmetic companies, without exception for size.
And companies must work quickly to ensure that they bring their product labels into conformance (even as they wait for further guidance from the FDA) and that they establish and pressure-test their adverse event reporting systems.
Legal Ramifications of Failing to Avoid These Early Pitfalls
There are considerable consequences for failing to adhere to product labeling and adverse event reporting obligations.
- Product labels that do not contain the information required by MoCRA are considered “misbranded” under the Food, Drug & Cosmetic Act of 1938 (FD&C Act). The sale of misbranded cosmetic is a prohibited act under the FD&C Act and comes with criminal and/or civil penalties. Additionally, even if the FDA does not pursue an enforcement action against a company in violation of MoCRA’s labeling requirements, the company could still face a consumer-driven class action lawsuit alleging violations of the consumer protection statutes in certain states.
- How a cosmetic company handles its adverse event reporting obligations under MoCRA is likely to be a focus of any future litigation. Issues of timely reporting are fodder for plaintiffs in lawsuits involving products that are already subject to similar requirements. And courts in certain states (e.g., California) have recognized failure-to-warn claims premised upon a failure to timely report adverse events. Failing to thoroughly assess adverse event information before it is shared with the FDA also comes with risks. Information submitted to the FDA is not only discoverable in litigation; it is also publicly accessible through a request under the Freedom of Information Act. Even though MoCRA precludes plaintiffs from using the submission of adverse event reports as evidence that a particular cosmetic product in fact caused or contributed to the adverse event at issue, it does not preclude plaintiffs from using this information for other purposes, such as a company’s notice of a potential safety risk or a pattern of similar incidents involving a certain set (or subset) of cosmetic products.
Mitigating MoCRA Compliance Challenges
There are some important steps that companies can take to avoid these early compliance pitfalls:
✅ Label Reviews and Compliance. Companies should review all product labels and update them to include Responsible Person contact information. They should also take stock of any noncompliant inventory and assess the practicability (and cost) of relabeling those products.
✅Adverse Event Reporting. Companies should audit any existing policies and procedures for adverse event reporting and recordkeeping and make sure that they have a system in place that facilitates quick and comprehensive information collection, investigation and reporting to the FDA. All employees should be able to recognize, handle and direct a customer to report an adverse event. There should be a process for controlling any sensitive information obtained during the adverse event process, and any system must ensure quick action and response times to build in as much time as possible to assess the severity of the reported event within the 15-day period set out under MoCRA.
✅ Trusted Advice. Partnering with experienced counsel can significantly improve a company’s ability to successfully navigate the intricacies of MoCRA compliance and minimize the legal (and even litigation) risk that accompanies these new regulatory requirements.
About the Authors
Marcha Isabelle ChaudryCourtesy of the author
By focusing on areas such as adverse event reporting, label compliance, and safety assessments, EWC equips businesses with the tools and knowledge needed for seamless MoCRA compliance.
Rachel RaphaelCourtesy of the author
She also advises consumer products, personal care, and cosmetics companies on the many issues that arise over the product life cycle.
As a litigator and regulatory counselor, Rachel offers valuable insights on how to successfully mitigate the legal risks associated with MoCRA compliance.
Note from the authors: The opinions expressed are those of the authors and do not necessarily reflect the views of their firms or their clients. This article is for general information purposes and is not intended to be, and should not be taken as, legal advice.
