How Beauty Companies Can Mitigate Risks Associated with AI Technology Use

From L’Oreal and Olay to Procter & Gamble and Shiseido, companies across the beauty industry are embracing AI technology with open arms. But what are the risks of incorporating AI technology into business practices, and how can beauty companies protect themselves? […]

For answers to these questions and a closer look at this rapidly growing segment of the beauty industry, CosmeticsDesign spoke to attorneys Kelly Bonner and Agatha Liu of Duane Morris LLP, for their insights and experience. Kelly Bonner’s practice focuses on litigation risk and regulatory issues affecting businesses in the cosmetics and personal care industries, as well as cross-jurisdictional and complex commercial disputes involving FDA-regulated and consumer-branded products, and Agatha Liu has assisted clients with AI-related legal needs.

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Balancing Innovation and AI Regulations in the Beauty Market

Duane Morris’ Agatha Liu and Kelly Bonner were interviewed by Personal Care Insights about the challenges and opportunities beauty companies face while using AI to appeal to younger consumer demographics. Below is an excerpt of the article.

How does the competitive landscape of the beauty industry impact businesses’ use of AI technologies, especially when it comes to targeting younger consumer segments?
Bonner
: The highly competitive nature of the beauty industry, with its desire to appeal to younger consumers, is certainly a key driver in beauty brands embracing AI tools to offer enhanced customer shopping experiences.

Can you provide some context about US AI regulations that the beauty industry should know? What do you expect is coming, especially considering the AI Act in the EU?

Liu: The EU AI Act imposes specific obligations on the providers and deployers of so-called high-risk AI systems, including testing, documentation, transparency and notification duties.

To read the full interview, please visit the Personal Care Insights page.

Beauty Is in the AI of the Beholder

Duane Morris partner Agatha Liu spoke with Personal Care Insights on potential risks, including personalization, appearance bias and regulatory compliance, as beauty companies integrate AI technologies.

What steps do you advise beauty companies to take to reduce the legal risks that could arise from implementing AI?
Liu: Very generally, companies should understand the technology they’re adopting and implementing and balance the benefits of the technology against potential legal pitfalls. That means liaising with outside counsel and privacy teams to obtain clarity and mitigate risks.  […]

Read the full interview on the Personal Care Insights website. 

2023 Regulatory Roundup: MoCRA

Updated deadlines, the announcement of a newly developed draft submission portal, and the release of several different draft guidance documents are just some of the developments that have occurred this year regarding MoCRA’s implementation of cosmetic safety regulations. As 2023 draws to a close, CosmeticsDesign spoke to attorney Kelly Bonner to review what’s happened so far with the Modernization of Cosmetics Regulation Act (MoCRA) and to understand what’s ahead.

To read the full text of this article, please  visit the CosmeticsDesign website.

U.S. House Reps Reintroduce Federal Bill Banning Intentionally Added PFAS in Cosmetics

On November 30, 23, U.S. Representatives Debbie Dingell (D-MI), Brian Fitzpatrick (R-PA) and Annie Kuster (D-NH) reintroduced H.R. 6519–the “No PFAS in Cosmetics Act“–which would require the Food and Drug Administration (FDA) to ban use of “intentionally added per- and polyfluoroalkyl substances” (PFAS) in cosmetics.

According to the Environmental Protection Agency, PFAS are a group of long lasting manufactured chemicals that have been widely used in industry and consumer products since the 1940s because of their useful properties. There are thousands of different PFAS, some of which have been more widely used and studied than others.

The “No PFAS in Cosmetics Act,” which was previously introduced in Congress in June 2021, and referred to the House Committee on Energy and Commerce on November 30, 2023, would amend the Food, Drug, and Cosmetic Act (FDCA) to require FDA to prohibit intentionally added PFAS in cosmetics within 270 days of the bill’s enactment.

Notably, the bill does not define PFAS beyond “intentionally added” perfluoroalkyl and polyfluoroalkyl substances. Nor does the bill differentiate which chemicals in the PFAS group–for example, Perfluorooctanoic Acid (PFOA) and Perfluorooctane Sulfonate (PFOS),  two of the most widely used and studied chemicals in the PFAS group–should be banned.

Last year’s Modernization of Cosmetics Regulation Act (MOCRA) requires FDA to publish a report within three years (i.e., by end of year 2025) assessing the use of PFAS in cosmetics and their safety, signaling the possibility of further legislation or regulation, if warranted.  Senate appropriators also have directed FDA “to develop a plan outlining research needed to inform regulatory decision-making, including potential development of a proposed rule to ban intentionally added PFAS substances in cosmetics.”

The proposed bill reflects the growing number of state legislatures that have enacted or are considering legislation banning the intentional use of PFAS in cosmetics, as well as other consumer products such as children’s products, menstrual products, cleaning ingredients, dental floss, and textiles. For example:

  • In 2021, Maine became the first state to require manufacturers of products with intentionally added PFAS to report to the Maine Department of Environmental Protection (DEP) documenting the purpose and amount of each PFAS compound used. The law aims to phase out the use of PFAS in cosmetics, among other new consumer products, by 2030.
  • Starting on January 1, 2025, California and Maryland will prohibit the manufacturing, sale, or delivery of cosmetic products containing certain intentionally added PFAS in cosmetics, including PFOA and PFOS, unless they contain technically unavoidable trace quantities of the substances stemming from impurities of natural or synthetic ingredients.
  • Starting January 1, 2025, Minnesota and Colorado will prohibit the sale or distribution of cosmetics (among other consumer products) that contain intentionally added PFAS.
  • Beginning January 1, 2025, Washington State will prohibit the manufacturing, knowing sale, or distribution of cosmetic products containing PFAS, defined as  “a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom.”
  • Oregon’s Toxic Free Cosmetics Act, which bans the sale or distribution of cosmetics that contain intentionally added PFAS (among other chemicals) is scheduled to take effect on January 1, 2027.

New York, which last year banned the use of intentionally added PFAS in apparel, effective January 1, 2025, is considering several bills that would prohibit the sale or distribution of cosmetics (among other consumer products) that contain intentionally added PFAS.

 

 

 

 

FDA Updates Instructions for Serious Adverse Event Reporting for Cosmetic Products under MoCRA

On December 14, 2023, FDA published updated instructions for reporting serious adverse events for cosmetic products, as mandated by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA), enforceable starting December 29, 2023.

FDA recommends that industry “responsible persons” as defined by MoCRA report serious adverse event reports for cosmetic products by using the current MedWatch Form 3500A , which is downloadable and fillable at MedWatch: The FDA Safety Information and Adverse Event Reporting Program – Mandatory (PDF).

FDA has updated the form’s instructions  to make it easier for the responsible person to complete the form , and requests that the completed form (along with any information to support the report) be submitted to FDA via email at: CosmeticAERS@fda.hhs.gov or by mail to:

FDA CDER Mail Center
Attn: Cosmetics MedWatch reports
White Oak Campus, Building 22, G0207
10903 New Hampshire Ave.
Silver Spring, MD 20993

FDA strongly encourages electronic submission of serious adverse event reports to facilitate efficiency and timeliness of data submission and management for the agency.

FDA is developing a process for submitting electronic mandatory adverse event reports for cosmetics, and will provide more information on the launch date for this process in the coming months.

As a reminder, MoCRA requires that a “responsible person” must report serious adverse events associated with the use of cosmetic products in the United States to FDA within 15 business days, and include a copy of the label on or within the retail packaging of such cosmetic product.

If the responsible person receives medical or other information about the adverse event within 1 year of the initial report to FDA, the responsible person must submit this new information to FDA within 15 business days.

MoCRA defines the “responsible person” as the manufacturer, packer, or distributor of a cosmetic product whose name appears on the label of such cosmetic product in accordance with section 609(a) of the Food, Drug, and Cosmetic Act or section 4(a) of the Fair Packaging and Labeling Act.

Additionally, MoCRA expands the definition of “serious adverse event” ” to include infections 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.”

Products will not be considered “injurious” if they cause minor or transient reactions to certain users.

This expanded definition still includes previously identified adverse events such as death; a life-threatening experience; in-patient hospitalization; a persistent or significant disability or incapacity; a congenital anomaly or birth defect; or medical or surgical intervention to prevent any of these outcomes.

New GAO Report Recommends FDA “Strengthen Efforts” to Implement MoCRA

On December 11, 2023, the United States Government Accountability Office (GAO) issued a report calling for FDA to strengthen its efforts to implement the Modernization of Cosmetics Regulation Act (MoCRA), and institute reforms necessary to exercise its new authorities under MoCRA.

The GAO’s report, entitled
“COSMETIC SAFETY: Better
Planning Would Enhance FDA Efforts to Implement New Law,” issues seven recommendations to the Office of the Chief Scientist to implement FDA’s new cosmetic oversight responsibilities:

  1. Develop an implementation plan for MoCRA — including a timeline with interim steps and interim deadlines — for completing all MoCRA requirements within the statutorily prescribed deadlines.
  2. Report on key milestones for all MoCRA requirements.
  3. Develop processes to collect needed data and evidence to measure FDA’s MoCRA implementation efforts against requirements identified in MoCRA.
  4. Assess the effects of implementing all MoCRA provisions on the current and future workforce.
  5. Develop a multiyear strategic workforce plan that identifies the needed personnel and capacity, including skills and competencies, to implement all MoCRA requirements.
  6. Develop a plan to strengthen diversity, equity, inclusion (DEI) and accessibility when recruiting and hiring additional staff to implement MoCRA.
  7. Adopt effective recruitment and hiring practices for MoCRA implementation, such as customized strategies to recruit highly specialized and hard-to-fill positions.

As previously reported on this blog and elsewhere, MoCRA represents the most significant statutory change to FDA’s ability to regulate cosmetics since the passage of the Federal Food, Drug, and Cosmetic Act (FDCA) in 1938. MoCRA significantly expands FDA’s rulemaking and enforcement authority over cosmetics and creates substantial new compliance obligations for manufacturers, packers, and distributors of cosmetics intended for sale in the United States.

The GAO’s report acknowledges that although FDA has taken important steps in implementing MoCRA, “FDA has not fully addressed leading practices that help ensure the success of agency reforms–in this case, the organizational changes necessary to implement the law.”

The GAO report acknowledges that FDA has undertaken significant organizational changes. In February 2023, FDA proposed moving the Office of Cosmetics and Colors out of its Center for Food Safety and Applied Nutrition (CFSAN) and into the Office of the Chief Scientist to better align the expertise of the agency’s cosmetics subject matter experts with those of the Chief Scientist, who is focused on research, science, and innovation.

However, the GAO noted that FDA has not developed an implementation plan for MoCRA, including interim steps or deadlines; not implemented processes for measuring the results of its efforts against MoCRA’s requirements; and has not developed a strategic workforce to ensure that FDA has the necessary personnel with the requisite skills and competences to exercise its new authorities,

FDA was provided an opportunity to review and comment on the GAO’s report, and generally agreed with its findings and recommendations.

According to FDA’s Chief Scientist,  FDA had not developed an implementation plan because FDA had been focused on meeting near-term MoCRA deadlines, such as additional requirements for adequate safety substantiation and adverse event reporting, which take effect December 29, 2023.

Additionally, FDA acknowledged that timely progress in implementing MoCRA and addressing GAO’s recommendations “hinges upon a significant increase in funding.”

Although MoCRA authorized FDA funding levels to increase sharply between 2023 to 2027, with authorized funding levels growing from $14.2 million in FY 2023 to $41.9 million in FY 2025 through 2027, no funding has been specifically set aside for MoCRA implementation. Accordingly, the FY 2024 President’s Budget request includes $5 million for MoCRA implementation, and in particular, hiring new staff. FDA also anticipates requesting funding for additional staff in subsequent fiscal years  in order to fully implement MoCRA.

The GAO’s report comes shortly after FDA announced last month that it intended to delay enforcement of MoCRA’s requirements for cosmetic product facility registration and product listing for an additional six months after the December 29, 2023, statutory deadline, or until July 1, 2024.

This delay is intended to provide the personal care products industry additional time to comply with these requirements, and comes in response to industry concerns about the need for  additional time to gather information required for facility registration and product listing.

FDA has advised that it will be ready to accept registration and listing information by the statutory deadline of December 29, 2023, and encourages companies to meet that deadline if they are able to do so.

 

 

 

 

Retailers’ Clean Beauty Claims Fuel Consumer Doubts and Lawsuits

In the beauty world, a “clean” product brings to mind one or more of the following features: sustainable, nontoxic, ethically made, cruelty-free, or even vegan.

Such broad associations speak to the appeal of “clean beauty” products: They can make consumers—especially climate-conscious Gen Z and millennials—feel like they’re making the better choice for themselves and the planet. The “clean beauty” market, which is forecast to expand to $15.3 billion by 2028, has grown from its roots in luxury and independent brands to take over shelves of products at mass-market retailers like Target.

But companies’ self-imposed definitions of what they consider to be “clean” has led to doubts about industry claims, fueling consumer-led class actions and raising the legal risk for companies trying to capitalize on product demand. While regulators are eyeing potentially misleading environmental advertising—and some beauty brands are even hoping they’ll clarify what’s “clean”—it’s the courts that will likely be the first to decide when use of the trendy term crosses into a type of greenwashing. […]

Still, the risk of regulatory enforcement for “clean” claims is fairly low, and it’s unlikely that the FTC will home in on the term for now, said Kelly Bonner, an attorney at Duane Morris who advises companies on consumer litigation and enforcement risks, including those in the beauty industry.

“I don’t think the FTC is going to focus so much on ideas of ‘clean’ or ‘natural’ given that it hasn’t defined these terms and it’s still unclear as to what these mean,” she said. “It’s more likely that it will get worked out in consumer protection suits and the courts.”

To read the full text of this article, please visit the Bloomberg Law website.

 

FDA Publishes Updated SPL Implementation Guide with Validation Procedures

Yesterday FDA published an updated  Structured Product Labeling (SPL) Implementation Guide with Validation Procedures, including updates to cosmetics product facility registrations and product listings that are now included within the SPL framework.

Yesterday’s release updates the SPL Implementation Guide published by FDA on October 13, 2023, which included facility registrations and product listings within the SPL framework, and described  the soon-to-be-released Cosmetics Direct electronic submission portal function as an SPL authoring tool intended to feature user friendly data entry forms, perform initial validations, create and save SPL submissions, and submit the SPL forms to FDA for internal processing.

Noteworthy changes to the required technical conformance criteria include:

    • Clarification of initial versus updated cosmetic product coding;
    • Clarification of coding requirements for human OTC drugs that are also cosmetic products;
    • Clarification between “leave-on” versus “rinse-off” product coding, unless the document type is a Cosmetic Facility Registration;
    • Clarification of cosmetic product category and cosmetic product facility codes;
    • Reclassification of “feminine deodorants” as “other personal cleanliness products”;
    • Clarification of market status coding as to discontinued or soon-to-be discontinued cosmetic products; and
    • Replacement of “Registrant” information with “Authorized Agent” information.

FDA has not yet announced when it expects the Cosmetics Direct portal to go live, but anticipates it being available for companies to register facilities and list products sometime before year end.

 

BREAKING NEWS – FDA Pushes Back Enforcement Deadline for MoCRA Facility Registration and Product Listing Requirements to July 1, 2024

Today, FDA announced updated guidance regarding its MoCRA rollout.

FDA  does not intend to enforce the requirements related to cosmetic product facility registration and cosmetic product listing for an additional six months after the December 29, 2023, statutory deadline, or until July 1, 2024, to provide regulated industry additional time to comply with these requirements.

In addition, FDA does not intend to enforce the registration requirement for owners or operators of facilities that first engaged in manufacturing or processing a cosmetic product after December 29, 2022, or the listing requirement for cosmetic products first marketed after December 29, 2022, until July 1, 2024.

FDA has advised that it will be ready to accept registration and listing information by the statutory deadline of December 29, 2023, and encourages companies to meet that deadline if they are able to do so.

FDA’s announcement comes in response to industry concerns about the need for  additional time, for example, to gather information required for facility registration and product listing, including obtaining facility registration numbers to associate with cosmetic product listings, obtaining  access to the electronic submissions database, and entering  and submitting  accurate registration and listing information.

FDA has not advised whether it intends to delay enforcement of professional product labeling requirements, which, under MoCRA, come into effect on December 29, 2023. Likewise, FDA has not advised whether delayed enforcement changes the December 29, 2023 effective date for companies to maintain records of adverse events, report serious adverse events to FDA, or maintain adequate safety substantiation records.

 

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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