Kristen Klesh, Loeb & Loeb’s regulatory partner, takes a look ahead at how regulatory oversight in the health, wellness and beauty industry has shifted over the years and where it’s headed next. A plethora of new lifestyle-related smart tech products, personal use medical devices and medical-grade cosmetic products are now available directly to consumers. Regulatory authorities such as the U.S. Food and Drug Administration (FDA) and Federal Trade Commission (FTC) have had to play catch-up on where their regulations stand and where the industry is headed.
From heart rate monitors and fitness, activity and sleep trackers to luxury cosmetics such as lasers and microneedling, consumers have access to it all at home today. At this stage, the FDA has issued guidance regarding the regulation of low-risk “general wellness” products that promote a healthy lifestyle without active rulemaking around these categories of products. But does the agency need to shake things up now? Additionally, how do regulators monitor product claims, including those made by influencers and consumers? And finally, how is the industry pushing boundaries within the existing regulatory framework while simultaneously being empowered by science to offer novel solutions on the market? Kristen takes a view on this exciting and emerging landscape of health, wellness and beauty products and the legal issues that are trending in this space.
Tell us about your regulatory and compliance practice. What are some of the unique and exciting aspects?
My practice focuses on working with consumer product companies through all stages of the product life cycle. I work with categories of products that are regulated not only by the FDA but also by the FTC, including food, cosmetics, devices and some over-the-counter drugs within the burgeoning “health and wellness” category. For example, when a client has a new digital health app or a cosmetic skincare product, I help them develop and formulate the products in keeping with the FDA’s regulations, work with advertisers and marketers to stay within the confines of promotional guidelines from the FDA and FTC, and ensure that the products are not perceived as unapproved drugs or medical devices unless they were intended to be. And, if a regulatory issue arises with respect to manufacturing, formulations or claims, I help companies resolve such issues with regulators. The best part about my job is that I am deeply embedded in my clients’ businesses and offer end-to-end legal support to help them realize their goals while bringing novel beauty and wellness products to the market.
I find it unique and exciting that I get to advise companies through each stage of a product’s life cycle management and help companies marry their legal requirements and business goals. During the critical early product development phase, I work alongside the creative development and formulation teams to identify how the product will likely be regulated based on the FDA framework — for example, as a drug or cosmetic — and advise on changes that may need to be addressed early in the process. Then, I work with the branding and marketing teams to figure out what we can say about the product based on the substantiation available while also staying within the confines of the regulatory requirements; in this setting, we focus a lot on risk tolerance for the company (depending on what types of claims they want to make), the data they have for the product and their marketing priorities. Finally, when needed, I shift my focus to working with the regulatory teams and navigating and resolving any compliance issues that may arise once the product is in the marketplace. This last phase increasingly involves working with clients to mitigate the risk of and/or resolve plaintiff class action challenges associated with product advertising claims.
What are some of the emerging trends in the health and wellness industry that FDA/FTC regulations have had to catch up with?
Over the past few years, there has been massive interest in and consumption of new direct-to-consumer devices and mobile apps that offer personalized wellness solutions. These devices range from mobile apps that track sleep to fertility and microbiome health apps, as well as high-end beauty devices intended to benefit the skin’s health and appearance. Many of these devices get close to triggering the FDA’s “medical device” regulatory requirements, but as we all know, these are very different from traditional devices we see in doctor’s offices.
The FDA has had to play catch-up on how it triages these devices and reassess its intentions behind what it should regulate. The FDA has broadly taken a stance that for low-risk devices intended only to promote health and wellness (rather than offering a diagnosis or a cure for diseases), it will issue “enforcement discretion” and not actively regulate the product as a medical device. Issuing new regulations is a lengthy process, so instead of active rulemaking, the FDA issued guidance to the industry and has launched a digital health platform where device and app developers can evaluate their classification levels and see where they fit in the FDA schema.
The FTC has also had to catch up with new trends by developing new guidelines for products that make health and safety claims. While the FTC previously had guidance focused on health and safety claims for dietary supplements, the massive influx of new digital health- and skin health-related wellness products has prompted the FTC to go beyond dietary supplements, to taking a stance that all consumer health and wellness products that make safety and efficacy claims should be regulated. This newly revised Health Products Compliance Guidance was issued in December 2022.
How has the luxury beauty market evolved over the past few years and has that changed regulatory oversight on beauty products?
Until recently, the FDA’s cosmetic regulations were premised on traditional makeup that is applied topically to cover the outward appearance of skin. That’s how the beauty industry has continued to demarcate between drugs and cosmetics; anything that superficially changes skin or the body is a cosmetic, and any topical product that claims to have a physiological effect on the body is generally treated as a drug. Yet, there’s been a shift in the beauty and wellness industry’s focus on addressing skin health through topical skincare products that provide benefits beyond traditional makeup.
The shift toward skin health benefits has prompted a huge challenge for beauty and skincare companies to fit within the FDA’s existing paradigm, which largely restricts any claims beyond those suggesting a superficial effect on the skin. For instance, under the FDA’s schema, any claims about collagen boosting or physically firming skin or elastin present a risk that a product could be regulated as a drug. This disconnect has crept in and deepened over time as science has leaped far ahead of where FDA regulations stand. Similarly, under the current set of regulations, a range of novel beauty devices such as electric exfoliators, lymphatic circulation gold bars, heating/cooling and hair stimulation products have been able to make limited beauty claims to avoid being regulated as medical devices.
The agencies and the industry are both keeping an eye on how these boundaries will shift and blur. The FDA needs to shift its perception of this emerging and evolving category of beauty products and devices. And the industry needs to push the boundaries while the agency is still adjusting, as long as they are not making very aggressive therapeutic or disease claims.
Finally, as cosmetics are increasingly positioned as having a physiological effect on skin health and often do impact skin below the surface level, we are seeing an increased focus on additional FDA and state law regulatory oversight of cosmetic product ingredients.
What kind of legal issues do you anticipate in consumer marketing over the next 3 – 5 years based on these developments?
On the regulatory front, the FDA’s next big push is to think about regulating cosmetic ingredients more seriously within the industry’s framework by taking a harder look at this industry. Previously, cosmetic products were not heavily regulated; they were mostly self-regulated with no premarket safety review requirements, and it was up to the industry to review the safety of their ingredients. But now they need to fully assess the impact of active ingredients that are topically applied.
Most significantly, for the cosmetic space, the much-anticipated Modernization of Cosmetics Regulation Act (MoCRA) was signed into law by Congress in December 2022 . MoCRA will be enforced by the FDA. The law represents a significant overhaul for the cosmetics industry and applies more of a drug-like regulatory framework to cosmetic manufacturers. For example, cosmetic manufacturers will need to register their facilities, report adverse events to the FDA, adhere to new labeling requirements and follow good manufacturing practices (GMP) standards like other regulated product categories, including drugs and devices. The law goes into effect on Dec. 29, 2023.
Beyond the regulatory landscape, there are litigation factors to consider as well. For example, the beauty industry’s tremendous push toward a focus on clean, natural and cruelty-free products has garnered attention from plaintiffs’ lawyers and, in the absence of adequate substantiation, can pose significant risks to clients in this industry.
Finally, with respect to the wellness device category, the FDA has allowed small, independent laboratory-developed tests (LDTs) intended for limited personal and diagnostic assessment to go unregulated. The industry has pushed to keep these diagnostic tests under the LDT exemption to avoid regulations. The FDA and Congress are now revisiting whether these LDTs should be subject to additional regulation as medical devices or a separate regulatory framework. While a number of bills have been put before Congress, we have not seen any action at this time, but it is an issue worth tracking. Moreover, the FDA is increasingly interested in additional regulatory oversight of the LDT category.
How is Loeb a leader in this space?
First, the extent to which products are regulated by the FDA is largely determined by what the advertiser/brand says about the product. Not only is Loeb the top advertising firm in the country, which comes with a deep understanding of the impact of express claims on consumers, but also we understand how product positioning and marketing can serve to create implied claims around products. All these implied claims are likewise regulated and need due consideration. Lawyers at Loeb are very knowledgeable about FDA regulatory issues and general advertising claims, which allows us to anticipate whether a consumer product may trigger an FDA regulation. We can skillfully navigate the advertising and labeling nuances when products want to operate in more regulated categories and help them operate within the FDA and FTC framework.
Second, we are one of the few firms with a luxury brands practice, and together with our IP, privacy and corporate lawyers, we offer a very deep bench and unparalleled support to our clients in the beauty and wellness space. We’re able to help from soup to nuts on wide-ranging legal issues, including assessing claims and regulations, trademark issues, and data privacy and branding aspects.
 MoCRA is included at Section 3501 of the Food and Drug Omnibus Reform Act of 2022 (“FDORA”) as part of the Consolidated Appropriations Act, 2023, Pub. L. No. 117-328 (2022). A copy of FDORA is available here.