Diminish fine lines.” “Regenerate your skin.” “Stimulate cell renewal.” These days, a number of cosmetic products claim to do more than just hide blemishes. Rather, they promise “age-defying” results with ingredients that influence and enhance the skin’s biological function. These products, aptly termed “cosmeceuticals,” are a hybrid between cosmetics and pharmaceuticals. For instance, while cosmeceuticals are applied topically as cosmetics, they also contain pharmaceutical ingredients such as alpha and beta-hydroxy acids, copper peptides, or retinoids. And accordingly, behind each active ingredient lies an even more active product claim.

With cosmeceutical performance claims becoming more daring, and with cosmeceutical sales soaring in the billions, federal legislation is making sure that cosmeceutical manufacturers and advertisers are putting their money where their mouth is.

FDA Regulation of Cosmeceutical Label Claims

Identity Crisis: Drug vs. Cosmetic

The Food & Drug Administration (the "FDA"), which generally oversees product labeling, does not consider “cosmeceuticals” to be a valid class of products. Therefore, FDA regulation of cosmeceutical performance claims depends on whether the product is deemed a cosmetic or a drug. Once deemed a drug, a cosmeceutical is subject to extensive regulation requirements relating not only to efficacy, but also to safety and composition.

Specifically, under Section 201 of the Food, Drug and Cosmetic Act of 1938 (the “FDCA”), drugs are articles “intended for the use in diagnosis, cure, mitigation, treatment, or prevention of disease…[or] intended to affect the structure or any function of the body of man,” while cosmetics are articles “intended to be rubbed, poured, sprinkled or sprayed on, introduced into, or otherwise applied to the human body…for promoting attractiveness, or altering the appearance.” [21 U.S.C.S. §321(g)(1), (i) (2008)]. Courts have elaborated on these definitions by focusing on the “intended use” of the product as revealed by its marketing and labeling claims, regardless of its actual physical effect [See United States v. An Article…Consisting of 216 Individually Cartoned Bottles, More or Less, of an Article Labeled in Part: Sudden Change, 409 F.2d 734, 739 (2d Cir. 1969), ["Sudden Change"]; See also United States v. An Article of Drug Consisting of 36 Boxes, More or Less, Each Containing One Bottle of an Article Labeled in Part Line Away Temporary Wrinkle Smoother, Coty, 415 F.2d 369 (3d Cir. 1969) ["Line Away"]]. For instance, in Sudden Change, the Second Circuit held that claims that the product would “lift out puffs” and give a “face lift without surgery” had physiological connotations that made the product a drug [409 F.2d at 741]. Similarly, in Line Away, the Third Circuit held that characterizing the lotion as “super-active” and “amazing,” creating a “tingling sensation” when at “work,” “tightening” the skin and “discouraging new wrinkles from forming” suggested therapeutic tendencies that made the product a drug [415 F.2d at 372]. Further, statements that the product was made in a “pharmaceutical laboratory” and packaged under “biologically asceptic conditions” implied pharmaceutical properties [Id. at 372].

However, a Maryland federal district court in United States v. An Article of Drug…47 Shipping Cartons, More or Less,…“Helene Curtis Magic Secret,” decided that, although a manufacturer made claims that the product was a “pure protein” that caused an “astringent sensation,” the product was not a drug since such claims were “less exaggerated” than those reported in the Second and Third Circuit cases mentioned above [331 F. Supp. 912, 917 (D.Md. 1971)]. By introducing a tenuous “exaggeration” standard, the court did not help clarify under which circumstances a product would be considered a cosmetic or drug. 

To its credit, the FDA has cautioned manufacturers about what it qualifies as drug claims through warning letters [for sample letters, visit: http://www.cfsan.fda.gov/~dms/coswarn2.html]. For instance, in 1987, the FDA issued such regulatory letters to more than twenty cosmetic companies indicating its objection to the label claims on anti-aging and anti-wrinkle creams. This warning procedure was outlined in Est’ee Lauder, Inc. v. United States Food & Drug Administration, where the defendant’s claims that its products would “accelerate the natural repair of cells” and had “changed the science of skin care to skin repair” were problematic because the labels presented them as affecting the structure or function of the body [727 F. Supp. 1, 5 (D.D.C. 1989)].Unfortunately, the case was dismissed for lack of ripeness, and there was no further clarification as to how cosmetic manufacturers could comply with the FDCA.

Whether a cosmeceutical is considered a drug or cosmetic is critical, and will impact its regulatory treatment by the FDA. If the product is a drug, it is highly regulated and subject to pre-market testing and extensive review, which may often take years to complete. Conversely, cosmetics are exempt from pre-market approval (with the exception of color additives), and therefore do not need to be tested, marketed, or labeled under FDA supervision. Rather, the FDA may pursue enforcement action against violative
(e.g., adulterated, misbranded) cosmeceuticals post market-entry. Therefore, any company marketing cosmeceuticals wishing to avoid a costly and burdensome FDA pre-approval process must position its cosmeceuticals carefully so that it does not trigger drug regulation procedures.

FTC Regulation of Cosmeceutical Advertisement Claims

Proof is in the Jar: Substantiate the Claim

If the cosmeceutical performance claim escapes FDA scrutiny, it may still be subject to review by the Federal Trade Commission (the "FTC"), the federal agency that regulates product advertisements and prohibits “unfair or deceptive acts and practices” under Section 5 of the Federal Trade Commission Act (the “FTCA”).Generally, an advertisement is considered deceptive if the advertiser lacks a “reasonable basis” to support the claims made in it. Further, the reasonable basis doctrine “requires that firms have substantiation before disseminating a claim” [FTC Policy Statement Regarding Advertising Substantiation, appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1984)].

Some advertisements contain statements concerning the amount of support the advertiser has for the product claim. For instance, if an ad claims “tests prove” or “studies show” that a specific botanical compound confers dermatological benefits, then the advertiser should be able to document those “tests” or “studies,” as well as gather evidence that those tests or studies are reliable. Be aware that an ad may imply more substantiation than it expressly claims; in such cases, the advertiser must possess the amount and type of substantiation the ad actually communicates to consumers. 

When an ad does not make an express or implied reference to a certain level of support and, in absence of other evidence indicating what consumer expectations would be, the advertiser must have a “reasonable basis” for making the claims. The FTC’s determination of what constitutes a “reasonable basis” depends on a number of factors: (i) the type of claim; (ii) the product; (iii) the consequences of a false claim; (iv) the benefits of a truthful claim; (v) the cost of developing substantiation for the claim; and (vi) the amount of substantiation experts in the field believe is reasonable.

Ordinarily, for product performance claims, adequate and well-controlled studies are required. For example, the court in In the Matter of Pfizer Inc. held that a product’s claim stating it "anesthesizes nerves in sensitive sunburned skin" was not properly substantiated due to testing flaws: preliminary injections did not predict topical application of the substance, and tests on guinea pigs rather than humans were inadequate [81 F.T.C. 23, 94-97 (1972)]. Further, the court indicated that a pre-existing protocol is usually essential to an adequate test, while use of a double-blind placebo would render it well-controlled. Of course, while testing protocol may vary widely within the cosmeceutical industry, a test that would pass muster would also likely involve publication, peer-review, independent facilities, random subjects, and statistically significant results. Moreover, the tests must be conducted prior to, and actually relied upon in connection with the marketing of the product. Therefore, any cosmeceutical performance claims should be substantiated and documented early in the product development process.

To summarize, cosmeceutical performance claims such as “diminish fine lines,” “regenerate your skin,” or “stimulate cell renewal” may end up causing more pain than beauty for the cosmeceutical manufacturer or advertiser if (i) the label claims subject the product to the FDA pre-approval process, or if (ii) the advertisement claims are not carefully reviewed and substantiated before entering the market.