MoCRA Requires Federal Regulatory Overhaul

On December 23, 2022, Congress enacted the Modernization of Cosmetics Regulation Act (MoCRA)—the first major statutory change to the U.S. federal government’s ability to regulate cosmetics since 1938. Passed with bipartisan
and industry support, MoCRA expands the Food and Drug Administration’s authority over cosmetics, and creates substantial new obligations for manufacturers, packers and distributors of cosmetics intended for sale in
the United States. Here’s what beauty companies need to know.

To read the full text of this article by Duane Morris attorney Kelly Bonner, please visit the firm website,

Introducing Cosmetics Direct – FDA’s New Electronic Portal for Facility Registration and Product Listing of Cosmetic Product Facilities and Products Under MoCRA

Fashion Retail Blog

Continuing its implementation of the Modernization of Cosmetics Regulation Act’s (MoCRA), and following on the heels of FDA’s Draft Guidance on Facility Registration and Product Listing (previously discussed here), on September 15, 2023, FDA announced its newly developed draft electronic submission portal, Cosmetics Direct, to assist persons submitting cosmetic product facility registrations and product listings under newly added Section 607 of the federal Food, Drug and Cosmetic Act (FD&C Act).

Draft screenshots of the electronic system, including example submissions, are available for review and comments, along with an interim Federal Register Notice, announcing the new system.

What’s New

Cosmetics Direct includes the required registration and listing submission information in a standard electronic format to help users organize their registration and listing submissions to include the information needed for FDA. Cosmetics Direct also is intended to give users access to prior Cosmetic Direct registrations and listing submissions.

Cosmetics Direct can be accessed through the Welcome to FDA Direct webpage, which will provide short background information about Cosmetics Direct. New users will need to create an account.

Users who intend to submit information about cosmetics and drugs may create a functional joint account with Cosmetics Direct and CDER Direct, FDA’s portal for drug submissions, which is intended to streamline the submission process.

Notable system features include:

  • Users will be able to create initial submissions using blank forms, or importing an FDA-accepted SPL stored in a valid XML zip file. SPL (Structured Product Labeling) is a document markup standard approved by Health Level Seven (HL7) and adopted by FDA as a mechanism for exchanging product and facility information. Importing an existing Facility Registration or Cosmetic Product Listing SPL will be beneficial for bulk submission.
  • By selecting a country outside the U.S. as a facility location, users will be prompted to identify U.S. Agent contact information.
  • Users will be prompted to sign a confirmation statement, attesting to the veracity of the information submitted, as well as additional contact information for any authorized agents submitting the information.
  • Users will be promoted to save and validate any new submissions, be able to view the status of registrations and listings, and be notified if system detects any errors through a Validation Failure message. The system will provide a list of errors that require fixing before resubmitting.
  • Users may also upload and submit existing Facility Registration or Cosmetic Product Listing SPL, and have the option to clone successfully submitted SPLs as starting points.
  • Users will be able to view the status and details of all submissions on the Cosmetics Direct homepage.

FDA strongly encourages electronic submissions to facilitate efficiency and timeliness of data submission and management for the agency; however, those who wish to submit paper forms still have the option to do so via FDA Forms 5066 and 5067.

As of March 2023, FDA discontinued use of Forms FDA 2511, 2512, and 2512a, previously used for voluntary registration activities, and stopped accepting new submissions to the Voluntary Cosmetic Registration Program (VCRP).

Takeaways

FDA’s announcement of Cosmetics Direct comes on the heels of its recent draft guidance for facility registration and product listing, clarifying, among other things, who must register and list, when, and what must be submitted.

FDA has stated that it expects its new portal to begin accepting submissions sometime in October 2023, in advance of the December 29, 2023 statutory deadline for facility registration and product listing.

 

FDA Issues Long-Awaited Draft Guidance for Industry on Registration and Listing of Cosmetic Product Facilities and Products Under MoCRA

MoCRA’s long-awaited rollout continues as today FDA released draft guidance to assist persons submitting cosmetic product facility registrations and product listings under newly-added Section 607 of the federal Food, Drug, and Cosmetic Act (FD&C Act).

Background

Section 607(a) of the FD&C Act requires every person that owns or operates a facility that “engages in the manufacturing or processing of a cosmetic product for distribution in the United States” to register each facility with FDA, update content within 60 days of any changes, and renew their registration every two years.

As of March 27, 2023, FDA ended its voluntary cosmetics registration program (VCRP), and advised that information submitted to VCRP would not be transferred over to any new system.

Section 607(c) of the FD&C Act further requires that for each cosmetic product, the responsible person must submit to FDA annually “a cosmetic product listing,” including ingredients. 

MoCRA defines a “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 FD&C Act or section 4(a) of the Fair Packaging and Labeling Act (FPLA).

Key takeaways from Today’s FDA Draft Guidance:

Small Business Exemption: Small businesses, as defined by Section 612 of the FD&C Act (average gross annual sales in the U.S. of cosmetic products for the previous 3-year period is less than $1 million, adjusted for inflation, and who do not manufacture or process certain cosmetic products described in Section 612(b)), are not required to register facilities and list cosmetic product(s).

Electronic Submission Portal: FDA’s new electronic submission portal is expected to be available in October 2023, with FDA strongly encouraging electronic submissions. FDA is developing a paper form as an alternative submission tool.

Definitions: The Draft Guidance defines “contract manufacturer,” “cosmetic products,” “facility,” “manufacturing or processing,” “operator,” “owner,” “responsible person,” and “small business.”

Who Makes the Submissions: Every person that owns or operates a facility that engages in the manufacturing or processing of a cosmetic product for distribution in the United States to register each facility and submit a cosmetic product listing unless:

    • it is exempt as a “small business”; or
    • the cosmetic product is also a drug or device subject to the requirements of Chapter V of the FD&C Act.

What Information to Include (Registration):

    • the name of the owner and/or operator of the facility;
    • the facility’s name, physical address, email address, and telephone number;
    •  with respect to any foreign facility, the contact for the United States agent of the facility (name and phone number), and, if available, the electronic contact
      information (email);
    • the facility registration number, if any, previously assigned;
    • all brand names under which cosmetic products manufactured or processed in the facility are sold;
    • the product category or categories (listed in Appendix A of the Draft Guidance) and responsible person for each cosmetic product manufactured or processed at the facility; and
    • type of submission (initial, amended, biennial renewal, or abbreviated renewal)

FDA intends to use the FDA Establishment Identifier (FEI) as the required facility registration number. The e owner or operator of a facility will need to obtain an FEI number before submitting the facility registration.

FDA also requests that the following additional optional information be submitted:
• parent company name (if applicable);
• facility DUNS Number; and
• additional contact information for individuals associated with the registration.

What Information to Include (Product Listing):

    • the facility registration number of each facility where the cosmetic product is manufactured or processed;
    • the name and contact number of the responsible person and the name for the cosmetic product, as such name appears on the label;
    • the applicable cosmetic category or categories for the cosmetic product (listed in Appendix A of the Draft Guidance)
    • a list of ingredients in the cosmetic product, including any fragrances, flavors, or colors, with each ingredient identified by the name, as required under section 701.3 of title 21, Code of Federal Regulations (or any successor regulations), or by the common or usual name of the ingredient;
    • the product listing number, if any previously assigned; and type of submission (initial, update to content (annual), abbreviated renewal)

FDA also requests that the following additional optional information be submitted:

    • parent company name (if applicable);
    • type of business (as listed on the label), i.e., manufacturer, packer, or distributor;
    • image of the label;
    • product webpage link;
    • whether the cosmetic product is for professional use only;
    • Responsible person DUNS Number (Dun & Bradstreet number) for address listed on product label;
    • Unique Ingredient Identifiers (UNIIs); and
    • additional contact information for individuals associated with the listing.

Multiple Listings: Under Section 607(c)4()B), a single listing for a cosmetic product may include multiple cosmetic products with identical formulations, or formulations that differ only with respect to colors, fragrances or flavors, or quantity of contents

Attestation: FDA requests that individuals submitting registration and listing information to attest to the accuracy and veracity of the information submitted.

How/When to Submit: Stakeholders should plan to register and list in advance of the December 29, 2023 statutory deadline.

Fees: There is no fee to submit a registration or product listing to FDA under section 607 of the FD&C Act.

Public Disclosure: Under section 607 of the FD&C Act, FDA will not disclose information from a facility registration on the brand names under which cosmetic products manufactured or processed in the facility are sold, or from a product listing on the facility registration number of the facility where the cosmetic product is manufactured or processed, in response to a request under the Freedom of Information Act (FOIA) (5 U.S.C. 552).

All other information from cosmetic product facility registration and listing would be available for public disclosure consistent with the FOIA, FDA’s disclosure regulations under 21 CFR Part 20, and other applicable federal law.

Drugs AND Cosmetics?: Cosmetic products that are also drugs under Chapter V of the FD&C Act are not subject to listing requirements. Likewise, a facility that manufactures or processes cosmetic products that are also drugs is not subject to registration requirement  unless it also manufactures or processes cosmetic products that are not also drugs.

Enforceability: As a reminder,  FDA’s guidance documents do not establish legally enforceable responsibilities, but are intended to describe FDA’s current thinking and should be viewed as recommendations.

Conclusion

Today’s Draft Guidance provides much-needed clarity regarding MoCRA’s requirements and upcoming registration and listing deadlines. However, we expect further guidance in the upcoming months as to MoCRA’s additional December 2023 deadlines, and feedback with FDA regarding any flexibility in meeting these deadlines.

 

Post-MoCRA Regulatory Compliance Checklist for Beauty and Personal Care Products

MoCRA, Pub. L. No. 117-328, represents the first major statutory change to the authority of the Food and Drug Administration (FDA) to regulate cosmetics since the Food, Drug, and Cosmetics Act (FDCA), 21 U.S.C. § 361 et seq.,
in 1938 and the Fair Packaging and Labeling Act (FPLA), 21 C.F.R. § 701.3, in 1966.

This checklist outlines key regulatory compliance considerations that are specific to personal care products marketed in the United States following the enactment of the federal Modernization of Cosmetics Regulation Act (MoCRA) on December 23, 2022.

To read the full text of this Lexis Nexis Practical Guidance Checklist by Duane Morris attorneys Driscoll UgarteRick BallAlyson LotmanKelly Bonner and Coleen Hill, please visit the firm website.

What Spas Need to Know About Recent Sunscreen Regulations

Duane Morris attorney Kelly Bonner was published in the June 2023 issue of WellSpa 360 magazine, discussing what spas and aestheticians need to know about recent regulatory changes affecting sunscreen, as well as the in’s and outs of SPF, the difference between mineral and chemical sunscreens, benzene recalls and related litigation, and reef-safe claims (a little light beach reading for lawyers).

To read the full text of this article, please visit WellSpa 360’s June 2023 issue, available at – https://wellspa360.texterity.com/wellspa360/june_2023/MobilePagedArticle.action?articleId=1884775#articleId1884775 (subscription required)

Tokens of Appreciation

Non-Fungible Tokens (NFTs) have become an increasingly popular way for companies to promote their fashion products.  Non-Fungible Tokens are a relatively new Blockchain-based technology that is changing the way people buy and sell digital assets. They can be used for authentication, anticounterfeiting, and to protect intellectual property rights.  An NFT is a unique digital identifier that is recorded on a Blockchain so as to certify ownership and authenticity of the thing identified by the token. Because NFTs are each unique, they differ from cryptocurrencies which are fungible. Non-Fungible Tokens cannot be duplicated, switched, or divided-up. The ownership of an NFT is recorded in a Blockchain and can be transferred by the owner, allowing NFTs to be bought, sold, and traded. Non-Fungible Tokens can be created by anybody with access to a Blockchain ecosystem.  Non-Fungible Tokens often include references to digital artworks, photos, videos, audio or fashion. An NFT may confer licensing rights to use a digital asset. Non-Fungible Tokens can be linked to physical items to improve verification of authenticity and provide traceability. They can also be used for marketing and customer loyalty programs.

In fashion, LVMH (Louis Vuitton) and Nike were among the first brands to create NFTs to drive brand engagement and loyalty. These digital assets allow brands to build a virtual sneaker, or a 3D model of a handbag or other accessory. They can also be incorporated into video games or other digital mediums, i.e., a Metaverse, to drive virtual engagement with the product.  Non-Fungible Tokens also provide a new channel for artists to showcase their work without having to rely on traditional copyright laws for protection. Artists can use NFTs to release their art as a digital item and have the freedom to sell it under their own terms.

A Metaverse is a virtual world, often on the net, that is essentially independent of our physical reality. It comprises multiple emerging technologies that promise the next level of interaction in the virtual and physical worlds.  A multi-billion dollar industry, the Metaverse is a virtual environment that includes a digital economy. It’s a decentralized ecosystem that is supported by cryptocurrencies and NFTs.  Companies and brands are making an effort to leverage the Metaverse as an innovative platform for marketing and sales. Many have already launched NFT-based products, including clothing. The fashion industry has jumped on the Metaverse bandwagon to promote its brands and products to younger consumers. Some of the biggest names in the industry have partnered with popular NFT platforms to drive their branded content. Fashion houses and labels are using NFT’s to promote their brand in virtual fashion shows. These shows allow users to try on virtual clothing in an augmented reality setting.  These virtual fashion shows also serve as a platform to engage with buyers and generate interest in the brand. Moreover, it can be a great way to reach Gen-Z and Gen Alpha customers who are less likely to shop offline. Continue reading “Tokens of Appreciation”

Chips Dip into Fashion

 

The luxury goods industry has been a target for counterfeiting for many years. From Louis Vuitton clutches to Hermes handbags, counterfeits can cost brands billions of dollars. Thankfully, Blockchain technology is transforming how the luxury industry fights counterfeiting. It offers a tamper-proof, secure way for brands to identify products. A unique cryptographic token may be placed on one or more RFID chips that can be surreptitiously located on or in the product.  This technology allows tracing of a product’s life cycle, from raw materials through manufacturing to the point of sale and beyond to resale.

Radio-Frequency identification (RFID) chips rely upon radio-frequency fields to automatically identify and track tags that have been affixed to objects, e.g., a designer handbag. RFID systems utilize miniature radio transponders, a radio receiver, and transmitter. When a radio-frequency interrogation pulse from the transponder is sensed by the RFID chip, it transmits digital data, e.g., a cryptographic token, back to the radio receiver. In this way, the identity and origins of a RFID tagged physical item can be determined from the information encrypted in the token. This technology is currently in use throughout commerce for a variety of purposes including food, retail, healthcare, and physical security.

Combining cryptographic tokens with RFID technology is a fast-growing trend in the luxury industry. By tagging luxury goods with RFID chips that include a unique digital signature, the manufacturer is able to quickly and accurately identify a particular item as authentic and determine its origins.  A cryptographic token is an encrypted electronic file that may be used to authenticate the identity of a website, individual, organization, user, or assets. They can be thought of as the “Blocks” in a Blockchain.

In May 2019, LVMH and ConsenSys launched AURA, a Blockchain-based platform that allows consumers to verify the authenticity of their luxury items via an online certificate. The AURA protocol cryptographically connects all parties involved in the supply chain (design, raw materials, manufacturing, distribution) to ensure full transparency and prevent counterfeiting. LVMH is using Aura for its Louis Vuitton and Parfums Christian Dior brands. The brand is working with a number of third-party suppliers, including those who provide raw materials for its products. Continue reading “Chips Dip into Fashion”

Green Fashion Supply Chains

The most exciting green applications of Blockchain technology are those that trace the origins of luxury goods back to their raw materials. Many companies are still not quite ready to embrace Blockchain technologies. The question is whether they will be able to see the benefits of increased traceability without investing in the technology itself. LVMH, Prada and Richemont-owned Cartier have banded together behind a shared digital platform known as AURA which creates “product passports.” This Blockchain-based solution allows customers to see the supply chain history of their goods from raw materials through to second-hand sales. Each brand’s product is given a unique, cryptographically protected identifier that allows customers to trace a customized digital trail of the product’s journey from farm to fashion show.

Nativa™ is considering a green application of Blockchain technology through the issuance of a certificate of authenticity for luxury goods manufactured with traceable, ethically sourced raw materials from farms around the world. Nativa™ wool products are produced using a regenerative agriculture program. The program seeks to protect the land by improving soil quality, water quality, boosted CO2 capture, and healthy, well-kept animals. The application of Blockchain to this program offers brands a traceable and certified story, with each step of the production process awarded a certificate and a label tracing the raw material, e.g., wool, from farmers to garments. The regenerative practices that work with nature instead of against it help improve land, reduce water use and emissions, and protect soil and biodiversity. This program is the first regenerative wool program to be launched in the United States, in partnership with Shaniko Wool Company, an Oregon-based farm group managing nine farms across four states. Its wool is RWS-certified, which means it’s responsibly raised and produced with the best possible standards of animal welfare, land management, and sustainability.

This program is a great example of what happens when luxury companies are willing to get on the ground and help their supply chain partners become more transparent. It’s a win-win for the brand, the farmers, and the consumer.

However, this is not the only tracing technology being explored.  Sydney start-up FibreTrace has developed a way to make it easier for fashion brands to track regenerative cotton and wool from field to runway. Its luminescent tracking pigment is made from rare-earth minerals and can be incorporated into the fiber itself so that it can be scanned to verify its provenance.  Continue reading “Green Fashion Supply Chains”

Blockchains in Fashion: Authenticity + Sustainability = Profit

Loro Piana is harnessing the power of blockchain technology to digitally certify the authenticity and traceability of its products. Partnering with Aura Blockchain Consortium — the first global blockchain dedicated to the luxury industry — the brand will use Aura’s tech to unlock visibility and traceability for its hero fabric, The Gift of Kings® wool.

A “blockchain” is a digital ledger that contains a series of encrypted transactions between computer file addresses often called “wallets”. These addresses have a public key that allows them to be opened and used for transactions and a private key, which is used to control access to the information held in that wallet. It is this combination of public and private encryption keys that makes a blockchain system so secure. It means that if someone is attempting to access the data in a wallet, they must decrypt and change every block in every wallet in the chain – without knowing both the public and private encryption keys this process would take almost the age of the universe to complete. Blockchain technology can provide a secure audit trail that can be easily used to track the movement of raw materials used by the fashion industry while moving through the supply chain.

There is no central authority that can manipulate the data stored on a blockchain – the information having been recorded and verified by multiple computers around the world. These computers (often servers) are called nodes, and they are responsible for checking and approving the transactions that go on the system. Once a transaction is approved , it is then added by encryption to a list of blocks in multiple wallets in the blockchain. Each block contains a time stamp, digital signature, and other relevant identifying and authenticating information. This information is then transmitted across all the nodes on the system, and once a specific individual receives the private key for that block, they can complete a transaction. One of the most exciting aspects of this technology is that it is virtually impossible for hackers to corrupt the encrypted data held within the blocks of the chain.

Counterfeit goods have become a big problem for high-end designers around the world. According to some of the biggest luxury brands, counterfeits account for nearly $98 billion in lost sales each year. In response, several of the industry’s biggest names are using blockchain to track their production and ensure the sustainability of their products. Chloe Vertical uses a blockchain called EON to trace cotton from field to fashion show.  Likewise, Stella McCartney’s Spring 2023 collection features a Snog-a-Log graphic tee made of climate-positive verified cotton grown in Turkey by farmers who use regenerative practices that capture and store more carbon in the soil than they emit.  One of the most innovative uses of blockchain is that of Certificate of Authenticity, which gives consumers confidence in their purchase by tracing its origins and authenticity throughout the product lifecycle. However, this is only the tip of the iceberg. LVMH, Prada and Cartier appear to be developing a global blockchain that may become open to all luxury brands, bringing a whole new layer of security to their clients’ data. Continue reading “Blockchains in Fashion: Authenticity + Sustainability = Profit”

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

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