On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023 (H.R. 2617), which by its name does not appear to have anything to do with cosmetics. However, buried in the approximately 1,650 pages of text are provisions that significantly reform the way the cosmetic industry in the U.S. is regulated. Recall that "cosmetics" are defined broadly as "articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance, and articles intended for use as a component of any such articles; except that such term shall not include soap."

Aptly titled the "Modernization of Cosmetics Regulation Act of 2022" (the "MCRA"), the MCRA adds 11 new sections to the cosmetics subtitle of the Federal Food, Drug, and Cosmetic Act ("FDCA"). Included in those eleven new sections are the following provisions:

• Facilities that manufacture or process cosmetics must register the facility with the FDA (note: a co-manufacturer is required to submit just one registration even if manufacturing or processing cosmetics on behalf of multiple companies).
• A "cosmetic product listing" must be submitted to Food and Drug Administration ("FDA") for each cosmetic product marketed in the U.S., which must contain information including but not limited to the facility registration number where the cosmetic product is manufactured or processed and a list of ingredients (not formulas) in the cosmetic product, including fragrances, flavors, or colors.
• The FDA must promulgate regulations to establish good manufacturing practices for the manufacturing and processing of cosmetics.
• A "responsible person" (generally defined as the manufacturer, packer, or distributor of a cosmetic product whose name appears on the label of such cosmetic product) must submit to FDA within a certain timeframe information about any reports of serious adverse events associated with cosmetic products manufactured, packed, or distributed by such person.
• A "responsible person" for a cosmetic product must ensure that there is adequate substantiation of the safety of the cosmetic product and must maintain records supporting that conclusion.
• Cosmetic products must include on the product label contact information for a "responsible person" and information about fragrance allergens, if any.
• The FDA now has mandatory recall authority and access to records if the FDA has a "reasonable belief that a cosmetic product, including an ingredient in such cosmetic product, and any other cosmetic product that the [FDA] reasonably believes is likely to be affected in a similar manner, is likely to be adulterated such that the use or exposure to such product presents a threat of serious adverse health consequences or death to humans."

Small businesses whose average gross annual sales of cosmetic products in the Unites States for a previous three-year period is less than $1,000,000, adjusted for inflation, are generally exempt from complying with the MCRA's good manufacturing provision and registration and product listing requirement; however, the exemption does not apply to any "responsible person" that manufactures or processes cosmetics products that (i) come into contact with mucus membrane of the eye under customary or usual use; (ii) are injected; (iii) are intended for internal use; and/or (iv) alter the appearance for more than 24 hours under customer or usual use. The MCRA does not prevent states from prohibiting the use or limiting the amount of an ingredient in a cosmetic product or from continuing in effect cosmetic product ingredient reporting to the state (e.g., cosmetic ingredient reporting requirement under California's Cosmetic Fragrance and Flavor Ingredient Right to Know Act of 2020.)

The MCRA also requires the FDA to assess the use of perfluoroalkyl and polyfluoroalkyl substances (referred to as PFOS and PFAS) in cosmetic products and to submit a report to Congress on its findings. Further, Congress used the MCRA to express its "sense … 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." No specific prohibitions or timelines were provided.

As next steps after reviewing this high-level overview of the MCRA, we recommend digging into the specific language to understand the potential obligations and how the MCRA may apply to your business. 

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