Marketers Reach for Wrinkle Cream as Cosmetic Claims Face Scrutiny

Industry Players Have Long Refused to Smear Each Other, but Government and NAD Are Focusing on $60B Sector

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Cosmetics have for years taken a backseat to drugs, food and nutritional supplements when it comes to scrutiny from regulators and other watchdogs, but that is changing.

Lancome was recently brought before NAD regarding claims that their creams could refill wrinkles in an hour.
Lancome was recently brought before NAD regarding claims that their creams could refill wrinkles in an hour.
The Food and Drug Administration, Congress and the National Advertising Division of the Council of Better Business Bureaus are all focusing attention on what may be the fastest-growing regulatory frontier in marketing: cosmetics ingredients and claims.

The Obama administration's fiscal 2013 budget includes a proposal for nearly $19 million in user fees for the cosmetics industry to fund enhanced monitoring, which would include a switch to mandatory from voluntary registration of ingredients.

Justifying the moves, the FDA points to explosive growth in the U.S. cosmetics market, to $60 billion annually. That market is also increasingly global, with the number of imported cosmetic products nearly doubling between 2004 and 2010, to almost 2 million.

FDA director Michael Landa says tougher standards are needed due to rapidly changing tech.
FDA director Michael Landa says tougher standards are needed due to rapidly changing tech.
Tougher scrutiny is also needed to address rapidly changing technology and more-aggressive marketing claims for skin-care products, Michael Landa, director of the FDA's Center for Food Safety and Applied Nutrition, said in testimony last month before a House subcommittee.

Increased use of extremely small particles (often erroneously trumpeted as "nanotechnology") may result in products or ingredients that work far differently than their conventional forebears, Mr. Landa said. The FDA is researching, for example, whether metal oxides used in topical cosmetics may penetrate the skin and become toxic when users are exposed to sunlight.

"The industry often refers to these products as "cosmeceuticals,' " Mr. Landa said. Though that term "has no legal or regulatory definition in the U.S.," he said, it could lead to some anti-aging creams' crossing the line to be classified and regulated like drugs.

Anti-wrinkle component retinol wasn't registered with the FDA before 2005 but is now listed in 200 products, Mr. Landa said. And the skin-care industry has listed more than 95 new anti-aging peptide formulations in more than 1,200 product-ingredients statements in recent years.

In one sign of how relatively loose U.S. cosmetic regulations are, Rep. Jan Schakowsky, D.-Ill., said that only 10 cosmetic ingredients are banned in the U.S., compared with 1,200 in the European Union.

On the other hand, Rep. Joe Barton, R.-Texas, said social media could do a better job as watchdog than a bunch of new FDA inspectors armed with tougher regulations.

"Where's the fire that we have to have these new authorities and these user fees?" Mr. Barton asked. "All it takes is one Facebook or one Twitter message and that product is deader than a doornail."

NAD is also taking a much harder look at marketers of cosmetics and skin-care products.

"We always try to do about 25% of our case-load as monitoring cases, particularly with industries that aren't good at policing themselves," said NAD Director Andrea Levine,

Cosmetic and skin-care marketers have been reluctant to challenge one another's claims, for fear that one challenge may easily beget another. Seeing that reluctance, NAD has increased its monitoring case load for the industry, Ms. Levine said.

In the past year, the organization's focus has been not just on smaller players, which historically make some of the most aggressive direct-response claims, but on three heavyweights: Procter & Gamble, L'Oréal and Johnson & Johnson.

In two of the cases, NAD found L'Oréal's Lancôme and J&J's Neutrogena lacked substantiation for claims that their creams could, respectively, refill wrinkles in about an hour or eliminate them in a week. Both companies disagreed with the decisions, but both said they'd take them into account in future ads.

Though the Personal Care Products Council is not arguing against improved regulation, in congressional testimony it rejected the call for mandatory product and ingredient registrations or new user fees.

"While cosmetic products remain among the safest in commerce, the existing system for regulating our industry is overdue for a makeover," said PCPC President Lezlee Westine. The additional safeguards and processes her group proposes "will provide the added transparency that consumers are seeking," Ms. Westine said.

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