Self-Regulation in the cosmetic industry: a necessary reality or a cosmetic illusion?



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Self-Regulation IN THE COSMETIC INDUSTRY:

A NECESSARY REALITY OR A COSMETIC ILLUSION?

Casey Mee Lee Daum

Class of 2006

May 2006

Food & Drug Law:

This paper is submitted in satisfaction of the

course requirement and the third year written work requirement.

ABSTRACT
The 1938 Food, Drug, and Cosmetic Act brought the cosmetic industry under the regulatory jurisdiction of the FDA. However, the confluence of federal administrative budgetary constraints, historical conditions of the cosmetic industry’s development, and pragmatic policy considerations has fostered a unique regulatory regime. The FDA has come to rely heavily on the cosmetic industry to regulate itself in order to ensure consumer safety. Recent criticisms allege that this system of self-regulation is ineffective, inefficient, and/or inappropriate. This paper will situate these criticisms within their various contexts – the historical, social, and administrative realities which define and constrain potential regulatory approaches – in order to assess the propriety of the current schema of cosmetic industry self-regulation.

I. INTRODUCTION

“But our desire for beauty is likely to outlast its object because, as Kant once observed, unlike all other pleasures, the pleasure we take in beauty is inexhaustible.”1


The pursuit of beauty as achieved through cosmetics is a virtually timeless and universally enduring endeavor. For centuries women have utilized cosmetics to enhance or alter physical appearance, negotiate conceptions of femininity, combat external manifestations of aging, challenge societal gender norms, assert social status, and so on. For, “the urge to decorate ourselves is one of the most fundamental instincts in human nature,” and the act of acceding to such an urge can entail profound symbolic messages and societal consequences according to social context.2 The long history of cosmetics usage can be demonstrated by the fact that earliest archaelogical indications of cosmetics date back to 10,000 B.C.3 Now, centuries later, we inhabit a societal context which has fostered and maintained the ascendency of the cosmetic industry – a context of increasing globalization, rampant consumerism, technological sophistication, lengthened life expectancy, and societal preoccupation with aesthetics and youthful image. The president of the Cosmetic, Toiletry, and Fragrance Association (CTFA) notes the wide reach of the industry and its potential for seemingly limitless expansion: “In an era of globalization, we are truly one of the world’s most global industries. Our products and our innovation know no boundaries. Whether it’s Bangkok or Beijing, Baton Rouge or Bagdad, the products that we make are the products that women and families use every single day.”4 The cosmetic industry today is a $29 billion business whose aggressive marketing and advertising efforts have forged a powerful trajectory of continued growth.5

While the 1938 Food, Drug, and Cosmetic Act provisions granted the FDA de jure regulatory authority in the cosmetic arena, industry developments and FDA budgetary limitations since the 1960s or so have resulted in a de facto regulatory regime of fairly minimal FDA regulation of the cosmetic industry and extensive industry efforts at voluntary self-regulation. This regime of voluntary self-regulation has recently been criticized by groups such as the Environmental Working Group as ineffective and inadequate for the protection of consumer safety. This paper will examine the current framework of limited FDA regulation and extensive efforts at industry self-regulation in order to determine whether such framework is a necessary and effective reality or only an illusory form of regulation in need of replacement or change. This debate must be contextualized in order to be properly addressed, taking into account: the societal context of cosmetic usage, industry realities, pragmatic limitations on regulatory possibilities, and theoretical bases for administrative regimes.



II. STATUTORY FRAMEWORK: FDA REGULATION OF COSMETICS
“In regulating cosmetics, the agency functions like a highway patrolman…. FDA regulation of cosmetics is entirely ex post.”6
Most citizens likely believe, probably vaguely but with conviction, that the FDA engages in expansive direct regulation of the detailed workings of the cosmetic industry. In fact, the first Food and Drug Act in 1906 did not even include cosmetics within its purview – it was not until the 1938 Act that cosmetics came under FDA regulatory authority. Contrary to popular belief, FDA regulation under the 1938 Act has primarily been limited to regulation of cosmetic products after their release into the marketplace; in other words, despite popular understanding of “the mighty FDA [as] a powerful organisation,” “neither products or ingredients are reviewed or approved before they are sold to the public.”7 This ex post regulation of cosmetics involves a process by which the FDA “functions like a highway patrolman” – “its inspectors look out for products that are dangerous to health, about which it can, like a highway patrol man, do something…. manufacturers routinely do [pre-market] testing, but that is not because FDA demands it.”8 In place of extensive pre-marketplace regulation, the FDA has a long history of reliance on the cosmetic industry’s engagement in voluntary self-regulation.

The Federal Food and Drugs Act of 1906

The Federal Food and Drugs Act of 1906, “the progenitor of today’s regulatory system,” did not include cosmetics within its regulatory scope. This exclusion created a federal regulatory gap in the area of cosmetics; this gap was at the time filled by the U.S. Post Office’s enforcement of the postal fraud statutes and the Federal Trade Commission’s enforcement of the Federal Trade Commission Act.9 The exclusion of cosmetics from the 1906 Act likely occurred because of politics: “in 1906 the beauty industry was considered so inconsequential that its inclusion would have lowered the tone of the legislation. Also, the beauty industry affected only women. And women couldn’t vote.”10 In fact, as a general matter, “because ‘only’ women used beauty aids, cosmetics and their impact on the economy have been almost wholly ignored in historical analyses about consumption.”11 While the undeniable reality of women’s political impotence in 1906 surely constituted a major factor in the exclusion of cosmetics from the 1906Act, the mere fact of market size also played a role. For, “according to manufacturing census data on toilet items, with which cosmetics were included… sales of cosmetics in 1900 stood at about $100,000.”12 However, beginning around 1900, the cosmetic industry emerged and rapidly expanded, as “women’s growing interest in beauty products coincided with their new sense of identity as consumers.”13 By around the mid-1920s, retail cosmetics sales were estimated at about $125,000,000 per year14 and about $150,000,000 in 1940.15

The federal regulatory gap created by the 1906 Act’s exclusion of cosmetics grew in significance as the industry grew in size during the early 20 century. This gap was quickly felt by “the very agency charged with enforcement” of the Act, the Bureau of Chemistry: “In annual reports as early as 1918, the bureau bemoaned both a lack of funding and a lack of true protection for consumers. Many consumers assumed protection where none existed, unconsciously expanding the power of the law and the enforcement ability of the bureau to protect them.”th The disparity between consumers’ assumptions and regulatory reality became dangerous when cosmetic products began harming consumers, and “by the 1930s, the industry was getting away with murder”:

A fifty-two-year-old woman was fatally poisoned by Lash-Lure, a mascara substitute. Koremlu, a depilatory made with rat poison, crippled scores of women. Cuticle removers removed fingernails and fingertips along with cuticles. Acetone, carbolic acid, coal-tar dyes, formaldehyde, and mercury were common ingredients…. In 1933, the FDA put together its ‘Chamber of Horrors,’ an exhibit intended to pump up support for the Tugwell Bill, an amendment to the 1906 act that would have given FDA jurisdiction over the beauty industry…. The shock tactics got publicity, but didn’t get the bill passed…. The beauty industry had lobbied aggressively against the bill, arguing that factory inspection would reveal trade secrets and ingredient names would only confuse women…16


Many point out that a historical pattern of tragedy and its attendant publicity provided the political impetus and momentum for legislative change in the form of increased federal regulation of cosmetic products. For example, one writer argues that “some well-publicized incidents caused by unregulated products, particularly cosmetics, spurred consumer activism in the years from 1900 to 1945.... It was grassroots political activism, combined with the power of personal tragic stories, I argue, that ultimately challenged, and changed, national law culminating in the 1938 Food, Drug, and Cosmetic Act.”17 A notable player in this consumer activism was M.C. Phillips and her 1934 report Skin Deep – an “expose of the beauty industry that did much to whip up the demand for cosmetics regulation”; through this expose, Phillips “denounced the ‘cosmetics racket’ for selling illusions, and she claimed women’s right, as voters and taxpayers, to safe, honest cosmetics.”18

The 1938 Food, Drug, and Cosmetic Act
The 1938 Food, Drug, and Cosmetic Act provided the first authority for the FDA to regulate the cosmetic industry. In fact, a major purpose of this Act was the regulation of cosmetics in response to some early twentieth century tragedies involving unsafe cosmetic products.19 The major provisions of the 1938 Act regarding FDA regulation of cosmetics involve adulteration and misbranding of cosmetics. These provisions are as follows:

§ 361.  Adulterated cosmetics. A cosmetic shall be deemed to be adulterated--


(a) If it bears or contains any poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling thereof, or under such conditions of use as are customary or usual, except that this provision shall not apply to coal-tar hair dye, the label of which bears the following legend conspicuously displayed thereon: "Caution--This product contains ingredients which may cause skin irritation on certain individuals and a preliminary test according to accompanying directions should first be made. This product must not be used for dyeing the eyelashes or eyebrows; to do so may cause blindness", and the labeling of which bears adequate directions for such preliminary testing. For the purposes of this paragraph and paragraph (e) the term "hair dye" shall not include eyelash dyes or eyebrow dyes.
(b) If it consists in whole or in part of any filthy, putrid, or decomposed substance.
(c) If it has been prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.
(d) If its container is composed in whole or in part, of any poisonous or deleterious substance which may render the contents injurious to health.
(e) If it is not a hair dye and it is, or it bears or contains, a color additive which is unsafe within the meaning of section 721(a).20
§ 362.  Misbranded cosmetics. A cosmetic shall be deemed to be misbranded--
(a) If its labeling is false or misleading in any particular.
(b) If in package form unless it bears a label containing (1) the name and place of business of the manufacturer, packer, or distributor; and (2) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count: Provided, That under clause (2) of this paragraph reasonable variations shall be permitted, and exemptions as to small packages shall be established, by regulations prescribed by the Secretary.
(c) If any word, statement, or other information required by or under authority of this Act to appear on the label or labeling is not prominently placed thereon with such conspicuousness (as compared with other words, statements, designs, or devices, in the labeling) and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use.
(d) If its container is so made, formed, or filled as to be misleading.
(e) If it is a color additive, unless its packaging and labeling are in conformity with such packaging and labeling requirements, applicable to such color additive, as may be contained in regulations issued under section 721. This paragraph shall not apply to packages of color additives which, with respect to their use for cosmetics, are marketed and intended for use only in or on hair dyes (as defined in the last sentence of section 601(a).
(f) If its packaging or labeling is in violation of an applicable regulation issued pursuant to section 3 or 4 of the Poison Prevention Packaging Act of 1970.21
§ 363.  Regulations making exemptions. The Secretary shall promulgate regulations exempting from any labeling requirement of this Act cosmetics which are, in accordance with the practice of the trade, to be processed, labeled, or repacked in substantial quantities at establishments other than those where originally processed or packed, on condition that such cosmetics are not adulterated or misbranded under the provisions of this Act upon removal from such processing, labeling, or repacking establishment.22
Cosmetic products are also considered misbranded under the 1938 Act if they fail to comply with the ingredient declaration provisions of the Fair Packaging and Labeling Act, for “the ingredient list on a cosmetic container is the only place where a consumer can readily find out the truth about what he or she is buying.”23 Thus, retail sale cosmetic labeling must contain a conspicuous ingredient declaration which lists ingredients in descending order of predominance, according to 21 CFR 701.3. The FDA has promulgated specific regulations regarding adulteration, misbranding, and voluntary registration. The legislative history for the 1938 Act does not indicate any legislative intent to require “premarket testing, premarket notification, premarket approval, or any other form of listing or registration” for cosmetic ingredients or final products.24

History of FDA Reliance on Industry Self-Regulation
The early years of 1938 Act enforcement manifested a spirit of collaboration among the FDA and various industry organizations which would endure and come to characterize the current regulatory framework: “What emerged in the first years of enforcement was a loose collaboration between physicians, manufacturers, and the FDA…. problems continued to crop up, but the FDA and manufacturers responded much more quickly than previously…. The cooperation of the [Toilet Goods Association] and other food, drug, and cosmetic associations was, some felt, indicative of the broad support the new law enjoyed.”25 In fact, despite earlier (and possibly more recent or enduring) indications of potential industry aversion to regulation, it seemed that at least some major cosmetic industry players and organizations were in support of the 1938 Act at its time of enactment; although this support perhaps was based upon the Act’s minimal pre-market safety regulation requirements. The early regulatory regime in a way bifurcated industry attitudes towards cooperation with the FDA: in general, more prominent cosmetic empires with more established reputations were more cooperative as compared to smaller, less reputable operations. FDA Chief Walter Campbell wrote in January 1940:

‘Really, the big cosmetic houses aren’t sorry that the regulation has come…. One spokesman for the industry said that they realized for some time that they were being driven too far by the ‘lunatic fringe.’ When some fly-by-night put out a paste and promised that one application would make a hag into a candidate for the front row of the chorus, more reputable houses felt pushed into making some assertions or suggestions which were on the inflated side.’26


The 1938 Act, and particularly the early era of its enforcement, was aimed at improving consumer safety across the industry by limiting the assertions and actions of both larger and smaller cosmetic firms. In these early years of regulation, the pervasive spirit of collaboration between the FDA and the industry also encompassed consumers and their physicians: “The FDA… relied in no small measure on the American public and physicians to alert the agency about possible problem products.” Theodore Klumpp, Chief of the FDA Drug Division, addressed consumers and physicians in 1940: “‘Congress had not provided us with facilities nor the personnel to make clinical tests of drugs, devices or cosmetics, ourselves…. We are dependent upon the reports of your experiences.’”27 This early history of across-the-board and comprehensive collaboration paved the way for the modern regime of voluntary industry self-regulation and cooperation with the FDA.

The 1938 Act does not grant the FDA authorization to require registration of cosmetic manufacturers, ingredient listing submission, or submission of pre-market information or safety substantiation for cosmetic products. The FDA website explicitly defines the limits of FDA authority over cosmetics and affirms the important role of the industry in assuming responsibility for safety in the face of these limitations. The website section entitled “FDA Authority Over Cosmetics” prominently features two subsections which plainly declare the respective roles of the FDA and the industry:

Does FDA approve cosmetics before they go on the market? FDA’s legal authority over cosmetics is different from other products regulated by the agency…. Cosmetic products and ingredients are not subject to FDA premarket approval authority, with the exception of color additives. However, FDA may pursue enforcement action against violative products, or against firms or individuals who violate the law.
Who is Responsible for substantiating the safety of cosmetics? Cosmetic firms are responsible for substantiating the safety of their products and ingredients before marketing. Failure to adequately substantiate the safety of a cosmetic product or its ingredients prior to marketing causes the product to be misbranded unless the following warning statement appears…28
The FDA’s establishment in 1971 and 1972 via regulations of a three-part voluntary program for the submission by manufacturers of establishment and ingredient information occurred at the request of the CTFA. This voluntary program initially included: 1) registration of cosmetic establishments (21 C.F.R. Part 710), 2) voluntary filing of cosmetic product ingredient statements (21 C.F.R. Part 720), and 3) voluntary filing of adverse reaction reports (21 C.F.R. Part 730). The third part of the program was withdrawn in 1997. Shortly after the voluntary program began, former FDA Commissioner Alexander Schmidt commented on the industry’s successful participation: “‘I know of no other industry which has a better record of voluntary accomplishment.’”29 When in 1998 the FDA suspended the establishment registration and ingredient listing programs because of severe budgetary constraints, the CTFA helped to rescue the programs by successfully lobbying Congress to “restore adequate funds for a credible cosmetic regulatory program.”30

The FDA website provides information and instructions about the voluntary program in a straightforward style which signals to the industry both the “do it yourself” nature of the regulatory regime and the mutually beneficial (to both FDA and the industry) importance of industry participation in the program:

The Voluntary Cosmetic Registration Program is an FDA post-market reporting system for use by manufacturers, packers, and distributors of cosmetic products that are in commercial distribution in the United States…. The VCRP helps FDA in its mission to protect consumers, while also helping cosmetic manufacturers and distributors make informed decisions. The greater the participation by the cosmetic industry, the better this program works.31
The “How to Participate” section of the webpage employs clear and accessible, non-legal, non-statutory style of language to delineate the two simple voluntary steps for cosmetic manufacturers:

1) Registering cosmetic manufacturing establishments. Cosmetic manufacturers or packers whose products are in commercial distribution in the United States should register their establishments, using a separate Form FDA 2511 for each manufacturing location. Only manufacturers and packers should register, not distributors. FDA assigns a registration number to each manufacturing establishment registered and sends you a receipt.


2) Filing Cosmetic Product Ingredient Statements (CPIS). A cosmetic manufacturer, packer, or distributor should file a statement for each product the firm has entered into commercial distribution in the United States. With the distributor’s permission, a private labeler or packer also may file these forms. Use a separate Form FDA 2512 for each formulation.32
The website then goes on to explicitly point out the benefits to all – industry participants, FDA, and consumers – of industry participation in the program: VCRP participation enables FDA to easily and quickly provide manufacturers with important information about cosmetic ingredients, and the VCRP program enables safety evaluation of cosmetic ingredients by the CIR.33 FDA utilizes this website to emphasize the voluntary nature of this program, the need for ensuring consumer safety, and the cosmetic industry’s important responsibility to self-regulate and self-police in the face of minimal FDA regulatory authority and capacity: “The VCRP is not a cosmetic approval program. Cosmetics are not subject to FDA premarket approval or mandatory establishment registration or ingredient reporting. It is the firm’s responsibility to assure that its cosmetic products and ingredients are safe and properly labeled, in full compliance with the law.”34 The VCRP provides a nexus for informational flow between the FDA and the industry, and thus its effectiveness depends upon the percentage of industry participation. Currently only about 35% of eligible companies in the industry participate in the program; the FDA would prefer a higher participation rate.35

A recurring safety issue in cosmetic regulation history is the distinction between drugs

and cosmetics. The Drug Amendments of 1962 strengthened the new drug provisions of the 1938 Act, making the distinction between a drug and a cosmetic very important.36 The diverse outcomes of 1960s cases regarding “wrinkle remover” products claims established what would be an enduring difficulty in differentiating between drug and cosmetic claims in cosmetic labeling.37 Further difficulties in this area arose in the 1980s with the emergence of new, more technologically advanced skin care products. FDA regulatory letters alleging that the advanced claims made by these skin care products were in fact illegal new drugs were ultimately resolved through industry adjustments of marketing claims. The blurry distinction between cosmetics and drugs resurfaced in the 1990s with the popularity of alpha hydroxy acids products.38 Thus, it appears that inevitably “this will remain an area of contention for years to come.”39

The Color Additive Amendments of 1960 constitute the only legislative amendments to the cosmetic provisions of the 1938 Act. Congressional consideration of additional legislation has never resulted in new legislative authority for cosmetic regulation, as “there has been no credible evidence that existing cosmetic ingredients and products pose a significant health hazard to consumers.”40 For example, 1988 House hearings conducted by Representative Ron Wyden regarding the safety of cosmetic ingredients and products did not result in additional legislation; the proposed legislation included a pre-market testing requirement, increased FDA access to industry data regarding safety, mandatory registration of establishments, products, and ingredients, and mandatory ingredient listing for professional products. CTFA’s vigorous defense of the industry’s safety record constituted a critical focal point of these hearings. CTFA responded to allegations of toxic chemicals in cosmetics by the National Institute of Occupational Safety and Health with a statement that these chemicals are not in fact toxic as used in cosmetics and in fact are commonly used in various other consumer products.41 Overall, CTFA’s response to criticisms made of the industry during the hearings focused on “three major points: (1) cosmetics are safe; (2) the industry's voluntary programs work; and (3) FDA has existing and adequate authority to act if deemed necessary.”42 The strong defense of the industry by CTFA in these hearings is emblematic of the prevailing regulatory regime founded upon industry safety assurance via voluntary self-regulation. This regime will likely endure, for “as long as the combined efforts of FDA and CTFA do in fact protect consumers from significant health hazards and assure the public of adequate information about cosmetic products in the marketplace, there will be no justification for new cosmetic legislation in the future.”43




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