Navigating 2024: State actions pose challenges for cosmetics, food and supplements

This is the final installment of our three-part series highlighting legal issues and bottom-line challenges that impact consumer-facing products — including dietary supplements, food and cosmetics — with key takeaways and strategies to help you get ahead of potential problems as we continue through 2024.

Part 3: Staying ahead of regulatory and legal challenges

Although we are speeding toward the second half of the year, there is still plenty of time to prepare for possible regulatory and legal challenges that will shape business in 2024 and the years to follow. States are taking the lead in regulating consumer products and their ingredients — requiring increased monitoring — and the U.S. Food and Drug Administration is prioritizing its own list to review. The agency also has its hands full with MoCRA (Modernization of Cosmetics Regulation Act of 2022) compliance; and nearly 13 years after its first draft guidance, FDA appears poised to issue a series of NDI (new dietary ingredient)-focused guidance documents, with one already issued. Over at the Federal Trade Commission, its focus on transparency continues, which will affect a wide range of industries.

States take lead, FDA follows (sometimes)

It started with California enacting The California Food Safety Act (AB 418) on Oct. 7, 2023, which will prohibit the manufacture, sale and distribution of food products containing certain substances, including potassium bromate, Red Dye 3, propylparaben and brominated vegetable oil beginning Jan. 1, 2027. Titanium dioxide was initially included, but the bill was amended prior to enactment. A day later, California’s governor signed AB 496 into law, prohibiting the manufacture or sale of any cosmetic product that contains a specific list of intentionally added chemicals, including formaldehyde and certain PFAS (perfluoroalkyl and polyfluoroalkyl substances), beginning Jan. 1, 2025.

And where California goes, other states tend to follow. Several states kicked off their 2024 legislative sessions with similar bills aimed at restricting substances added to foods (including dietary supplements) and cosmetics. We don’t see this trend going away, so if you haven’t already done so, reviewing product inventory and determining whether reformulation is required — or even possible — is a must, especially if you plan to sell or distribute products in California. Not surprisingly, California is also leading the way with laws around packaging. With so many pending bills around the country, check back for a future column highlighting this topic.

Notably, FDA is undertaking its own assessment of food ingredients, which the agency announced in July 2023. Last month, FDA updated its list of select food ingredients, food contact substances and contaminants under review as of March 4, 2024, providing more information and reassessments in response to petitions. Arsenic, PFAS, lead, Red Dye 3 and titanium dioxide are among those listed, and FDA anticipates updating the list regularly to promote transparency.

Perhaps the most stunning state action in recent months was the passage of legislation in New York restricting the sale of certain OTC drugs and dietary supplements promoted for weight loss or muscle building to those 18 and older. The first-of-its-kind bill, signed into law last October, also extends to online and mail orders and requires age verification upon delivery. While the law excludes some protein products, those containing creatine, green tea extract, raspberry ketones, garcinia cambogia and green coffee bean extract may be included, depending on the labeling, marketing and other factors. While legal challenges to the law have been filed in court by dietary supplement trade associations, given the effective date of April 22, 2024, many in the industry are scrambling to come up with a compliance plan. Another significant challenge is that some of the bill’s key provisions are ambiguous, leaving even the most well-versed industry lawyers perplexed about how to advise clients on compliance. Will enforcement be enjoined at some point? Hard to tell, but what’s more concerning is other states may follow New York’s lead — and unlike federal legislation, state legislation can move quickly, sometimes in a matter of weeks. If you don’t already have an eye on state activity, now is the time to prepare, and this might include reformulation or updating label claims to adjust for these future changes.

MoCRA compliance deadlines for cosmetics are creeping up

While ingredient and product restrictions haven’t been as high of a priority for FDA, the agency’s plate is certainly filled with other issues. MoCRA implementation is fully underway, with the deadline to register cosmetic manufacturing facilities and list cosmetic products (including their ingredients) approaching on July 1, 2024. MoCRA’s serious adverse event reporting and safety substantiation requirements are already in effect. Exactly how and when FDA will enforce these requirements remains to be seen, but we expect retailers may be asking questions about compliance, so companies should be prepared.

On the topic of product listing, Sen. Dick Durbin of Illinois plans to reintroduce legislation to establish mandatory product listing for dietary supplements, referred to as MPL. Of course, MPL is controversial in the industry, but once the cosmetic listing is up and running, it may be more difficult to argue against the same requirement for dietary supplements.

NDI guidance(s) on the way

Another controversial topic in the supplement space is NDIs, specifically, which ingredients require a notification to FDA. Although the number of NDINs the agency has acknowledged has increased in recent years, the industry and FDA remain divided on a number of key issues. FDA is moving ahead and announced that a series of final NDI guidance documents is on the way. The first, issued on March 5, was the final guidance document for section V of its 2016 revised draft guidance, followed about a month later by draft guidance on NDIN master files, which expands upon and replaces the recommendations related to master files in the 2016 guidance. Although these documents don’t address the more controversial issues from the 2016 guidance, their publication does signal the agency’s interest in NDI compliance. Whether there will be an uptick in FDA enforcement is still unknown even as these guidance documents roll out (guidance merely represents the agency’s “thinking” on the topic of NDINs). At a minimum, companies should inventory their dietary ingredients to determine their regulatory status and be prepared to justify why potential NDIs have not been notified to FDA.

FTC’s focus on transparency

For good reason, FTC’s Health Products Compliance Guidance has gotten most of the attention, but companies should also be mindful of other initiatives on the commission’s agenda. FTC has been busy on a number of fronts:

• Updating its “Guides for the Use of Environmental Marketing Claims,” known as the “Green Guides.”

• Releasing a revision to the “Guides Concerning the Use of Endorsements and Testimonials in Advertising” and updating related FAQs.

• Issuing a proposed rule intended to ban fake and deceptive consumer reviews and testimonials, including buying positive or negative reviews.

• Issuing a proposed rule on unfair or deceptive fees, known as “junk fees.”

Reviewing all advertising practices — especially around product reviews and testimonials (and automatic renewal/subscription plans!) — will be key to an “FTC-free” 2024.

We can also expect FTC to continue taking action on potentially deceptive “Made in USA” claims, although recent cases haven’t focused on foods, supplements or cosmetics. Also on our minds is whether FTC takes a more aggressive stance on health-related claims following the issuance of its guidance on that topic. Key issues in the guidance include having adequate disclosures and qualifiers, drilling down on the quality of the substantiation, and determining what qualified experts in the field would consider sufficient evidence to back the claim. As a reminder, it doesn’t matter what a company intended a claim to mean, but what a reasonable consumer might take away from it — make sure you understand all reasonable takeaways and revise claims if needed to avoid unintended implications.

AWG takeaways

Whether it’s state initiatives or FDA … commonly used substances in foods, supplements and cosmetics are on the chopping block, and states beyond New York likely have their sights set on restricting sales of weight loss and bodybuilding products to minors. Take an inventory and determine which of your products might be at risk — and whether continuing sales in certain states is the right option. And, with MoCRA deadlines and additional NDI guidance possibly on the way, squaring away compliance for cosmetics and dietary ingredients should also be on your list for 2024. Last but not least, do a sweep of your marketing practices and claims to ensure they align with FTC’s expectations.

With all of these efforts, it’s always recommended to work with experienced legal counsel to ensure you are able to properly evaluate risks and assess how they may (or may not) impact your business.