Two recent changes to regulations will significantly impact the industry in 2009. These include changes to over-the-counter (OTC) labels, and the latest amendment to the Lacey Act. The most recent “Regulatory Review” column, published in December 2008, discussed the Lacey Act in brief but more details are emerging. Although neither of these regulatory changes will likely impact the way in which companies conduct business, they do require more information on product labels and will cause significantly more paperwork both for cosmetic companies and ingredient suppliers.
The Lacey Act Changes
John F. Lacey introduced a law that President McKinley signed on May 25, 1900, now known as the Lacey Act, which made it a federal crime to poach game in one state with the purpose of selling the bounty in another state. It became the first law to protect these endangered animals and birds. As the first federal conservation law, it remains one of the foundations of conservation law enforcement today.
The Lacey Act has been amended many times with significant changes in 1969, 1981, 1988 and now, 2008. In 1969, amphibians, reptiles, mollusks and crustaceans where added to the list. Penalities included fines up to $10,000 and imprisonment for up to one year. 1981 saw the addition of indigenous plants and increased fines and jail time. In 1988, falsifying documents to cover up violations was added as a crime; other changes included the addition of trees and lumber made from these endangered trees.
The Food, Conservation and Energy Act of 2008 (known as the Farm Bill) was passed on May 22 and expanded the Lacey Act to protect a much broader range of plants and plant products, along with wood—which is a change that ultimately will impact the industry. To read the entire 628 pages, visit http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills& docid=f:h2419enr.txt.pdf. Specifically, go to Title VIII Forestry, Subtitle C Amendments to Other Forestry Related Laws, and further, to Section 8204: Prevention of Illegal Logging Practices, which reads:
It shall be unlawful for any person to import any plant unless the person files upon importation a declaration that contains:
(A) the scientific name of any plant (including the genus and species of the plant) contained in the importation;
(B) a description of—(i) the value of the importation; and (ii) the quantity, including the unit of measure, of the plant; and
(C) the name of the country from which the plant was taken.
What is critical here is the definition of plant: The terms “plant” and “plants” mean any wild member of the plant kingdom, including roots, seeds, parts or products thereof, and including trees from either natural or planted forest stands.
The US Department of Agriculture (USDA), which administers this part of the Act, states that companies are required to complete a form if they are importing any of the following:
Any wild member of the plant kingdom, including roots, seeds, parts, or products thereof, and including trees from either natural or planted forest stands, except:
1. Common cultivars, except trees, and common food crops (including roots, seeds, parts, or products thereof);
2. Scientific specimens of plant genetic material (including roots, seeds, germplasm, parts or products thereof) that are to be used only for laboratory or field research;
3. Plants that are to remain planted or to be planted or replanted; or
4. Plants used exclusively as packaging material to support, protect or carry another item, unless the packaging material itself is the item being imported.
Companies must still complete this form if they are importing those plants described under points 3 and 4 above, that are listed:
• In an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (27 UST 1087; TIAS 8249);
• As an endangered or threatened species under the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); or
• Pursuant to any state law that provides for the conservation of species that are indigenous to the state, and are threatened with extinction. What does this mean for personal care products? Many registrations.
The forms can be found at: www.aphis.usda.gov/library/forms/pdf/ppq505.pdf. There is no definition in the Act of what is considered wild, nor is it clear whether companies register materials if their products can be used for foods and in other applications.
Although this author initially thought it would be easy to comply with the information required by the Act, upon reading the USDA form it became apparent that much more information is required than the Act requires (see Data Required for USDA Registration of Lacey Act Materials). This form provides definitions and instructions for filling in the required fields. Comments The USDA has stated that “the Lacey Act amendments are a new tool that will help the United States to support the efforts of other countries, and its own states, to combat illegal logging and other threats to biodiversity.”1 Further, it continues: “the plan is to begin this Dec. 15, 2008, with voluntary declarations, using a paper-based system. Meanwhile, we’re developing an electronic process to make it easy for importers to submit declarations. Once that system is ready, we plan to phase-in enforcement, beginning probably next April, for wood and live trees and plants, and then adding wood pulp, paper, musical instruments and furniture next July. Our goal here is informed compliance.”2
Informed compliance may be the objective, but compliance by the other 99.9% (I’m exaggerating here) of imports to file all this data for every shipment will only create a ton of paper or electronic submissions—which are expected to be available in early 2009—with little to be gained. Why couldn’t the USDA just list the plants (genus and species) that are of concern, and require registrations for only these? It would be much cheaper and save industry and the USDA valuable time while also accomplishing the Act’s purpose.
Just imagine an ingredient supplier that imports starting raw materials such as vegetable oils to make fatty acids, or essential oils for fragrances or resale. It would impose an impossible task on them to file all this documentation for each shipment; is the seed from a “wild” species or a planted one? and how does one tell the difference? At least the country of origin would not be as difficult and genus and species are available in the International Nomenclature Cosmetic Ingredient (INCI) names; and recycling is likely not an issue.
However, this author pities the foreign cosmetic manufacturer who is trying to sell to the US market, or foreign contract manufacturers for US companies. Tracking down the country of origin for their ingredients, including fragrances and packaging, and releasing trade secrets such as amounts of essential oils in a fragrance, and information about the paper used on labels, is beyond anyone’s worst nightmare.
Is the US Congress going crazy? I will be sending this article, once published, to my Congressman and Senators to ask them why our limited taxpayers’ dollars are being wasted—and to ask them whether they even read this legislation before they voted on it. I urge all readers to do the same.
Since there are fines and imprisonment provisions, compliance becomes crucial, even if the Act is unclear about what must be registered. A coalition of affected trade organizations has proposed a two-year moratorium on enforcement of this legislation and requests that the Government Accountability Office examine the scope and impact of this act. This law needs to be changed to accomplish its real intent.
“The 2008 Farm Bill amends the Lacey Act to extend its protection to a broader range of plants, particularly timber, and the wood and paper products created from those logs. So it is now unlawful to import or purchase plants—or articles made from them—that are taken or traded in violation of U.S. or state laws, or most foreign laws. The reasoning is straightforward: illegal logging robs countries, destroys forests, depresses global timber prices and puts money into the hands of criminals. It competes unfairly with legal production and trade. Further, profits from illegal logging have been used to fuel conflict and purchase arms. It is a bad deal and the Lacey Act is an effort to prevent it.”3
Again, this may be its intent but will it be achieved? Or will the USDA just drown in data?
This amended Lacey Act goes into full effect on April 1, 2009.
US OTC Drug Labeling
All OTC or nonprescription drugs sold in the United States have required labeling. These drugs are allowed to be sold in the United States by two methods. The first is an approved new drug application (NDA), which is restricted to the company that obtained the application, and to the formulation that was approved. Changes to a formulation but not to the active require an amended NDA prior to the drug’s sale. When the FDA approves the NDA, companies are informed of the permitted claims and the mandated labeling. All NDA OTC drugs must be labeled in the Drug Facts format, which must be placed on the Principal Display Panel of the product package.
OTC drugs sold under an FDA Monograph also have required labeling as stated in the Monograph. These all require the Drug Facts format with the exception of sunscreens. Sunscreens are required to include the same information but there is a stay on requiring the Drug Facts format for sunscreens until the FDA issues its Final Rules on UVA. Once this is published, the agency will publish when Drug Facts and the Drug Facts format must be used, and what new labeling is required. Many companies have been using the Drug Facts format for sunscreens since this law was enacted. Most consumers consider products without Drug Facts to be “old” products.
Drug Facts labels are specific as to font size, bolding and fine line separations, bold and italics, required headers and spacing. See Drug Facts Labeling for a quick review.
Since Drug Facts are unique to the United States, dual labeling is not permitted. Companies cannot label a US-deemed drug to be a cosmetic, even if it is regulated in other countries as a cosmetic, and then use a dual label in either market.
The New Change
On Dec. 22, 2006, Public Law 109-462 was passed. This law requires all OTC drugs sold under a Monograph to include on the label (the Principal Display Panel) a way for consumers to report serious adverse events incurred from using the product. The term serious adverse reaction is defined by law—yet most consumers do not know what this means. Public Law 109-462 was to go into effect in 2007 but the FDA has not required its implementation until January 2009; its enforcement will begin in January 2010.
Companies may list means for consumers to contact them to report such adverse reactions either outside the Drug Facts box, or preferably under the Other information heading within the Drug Facts panel. One option is to list a telephone number but this must be answered by an individual and not electronically. This is because companies really should have written documentation if a true serious advent has occurred. The second and preferred option is to list a US-based address. This address can and probably should be a separate address from what is listed as required by the Fair Packaging and Labeling Act.
Upon being notified of an adverse reaction as defined by the FDA, companies are required to file specified information to the FDA within a limited time frame. However, since this is a very short time frame, sending a notice to a general address likely will not allow companies sufficient time to report. The FDA has issued a guidance document regarding this notification procedure and time frame, which can be found at: www.fda.gov/cder/guidance/7950dft.htm.
Although it is a good idea for consumers to have a way to report serious adverse events, most of the time, when a serious adverse event is occurring, there is only enough time to seek immediate medical care; letters and phone calls come later. This notification procedure is useful in the case of drug overdosage or reactions to drug ingestion. However, for cosmetic-like drugs such as topical OTC drugs that do not have dose restrictions or that can make cosmetic claims, requiring this contact information is just more label clutter. Even worse, some NGOs think the same information should be required on cosmetic labels. For foreign-based companies, this is difficult; and for US-based companies, it may be easier to outsource these address and reporting requirements.
1. BI Knight, Under Secretary for Marketing and Regulatory Programs, Sixth New Zealand Biosecurity Summit, Christchurch, New Zealand (Nov 4, 2008)
2. BI Knight, California Marine Affairs and Navigation Conference, Eureka, CA USA (Oct 15, 2008)
3. Ibid Ref 2