TPP Cosmetics Annex Is 'Signal To The World' For Regulatory Best Practices

Recently released text from the Trans-Pacific Partnership outlining cosmetics regulatory best practices promises to be a "signal to the world," according to the Personal Care Products Council. The cosmetics annex calls for a risk-based approach to safety assessment and oversight systems based on postmarket surveillance rather than premarket authorization, among other principles that TPP parties would be expected to embrace if the deal goes through.

The Trans-Pacific Partnership's dedicated cosmetics component would promote oversight systems across member countries based on risk-based safety evaluations and postmarket surveillance versus premarket authorization – in short, frameworks similar to that in place in the US.

Francine Lamoriello, executive VP of global affairs at the Personal Care Products Council, says the instrument, if ratified, will send a "signal to the world" about regulatory best practices for cosmetics.

PCPC has been a champion of the trade pact throughout its development. Released to the public in final form Nov. 5, the deal is designed to lower trade barriers, reduce tariffs and promote regulatory consistency across 12 countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the US.

The TPP, expected to be up for congressional vote in the US in early 2016, addresses cosmetics regulation specifically in Annex 8-D, found within the Technical Barriers to Trade chapter, which industry associations have lauded as an "extraordinary opportunity" (Also see "Cosmetics Trade Groups: TPP Conclusion Marks 'Extraordinary Opportunity'" - HBW Insight, 12 Oct, 2015.).

In the context of the cosmetic annex's development, PCPC "had to explain the struggles that we face when some regulatory decisions are clearly based on hazard, based on the absolute sense of no possible risk rather than balancing the potential of harm with the overall benefit of the product," Lamoriello explained.

Lamoriello highlighted one piece in particular as a win for the group's advocacy program.

The deal states: "Each Party shall ensure that when regulating cosmetic products it applies a risk-based approach."

US regulations already reflect a risk-based approach to safety, under which potential hazards associated with products and ingredients are weighed against benefits and the probability of those hazards' occurrence.

Other countries around the world have been more inclined to let hazard assessment alone dictate policy, often characterized (if inaptly) as the "precautionary principle," seeking to eliminate rather than manage potential hazards. Detractors argue, for example, that every chemical is hazardous to some degree, but risks can be effectively minimized for acceptable safety assurance while maintaining benefits.

One area where the hazard-versus-risk debate has flared up is in discussions around cosmetic preservatives. In recent years, NGOs increasingly have been calling for the discontinuation of proven preservatives such as parabens due to studies linking the substances to potential adverse health effects, with industry consistently challenging such research from a risk standpoint and contending that ineffectively preserved products pose a more significant threat to consumer safety.

Industry stakeholders have seen certain preservative bans and restrictions adopted of late in the EU and other countries around the globe – and de facto preservative regulation by major retailers in the US – as deferring to NGOs' hazard-based mentality rather than balanced risk calculations.

In the context of the TPP's development, PCPC "had to explain the struggles that we face when some regulatory decisions are clearly based on hazard, based on the absolute sense of no possible risk rather than balancing the potential of harm with the overall benefit of the product," Lamoriello said.

"This is something that we struggle with all the time, not just in the documented regulation in the law, but as new policies are adopted toward individual ingredients or testing," she added.

The TPP's cosmetics annex also directs member countries to "take into account" in their regulatory work that cosmetic products are generally expected to pose less potential risk to human health or safety than drugs or medical devices, an acknowledgement that Lamoriello says is important to put cosmetic risk into context.

The agreement's tenets related to risk management were developed not only for implementation by TPP parties, but also "with an eye toward [outside] countries that might adopt it," Lamoriello indicated.

She noted that governments outside of the TPP cluster are closely watching the document as well, and the risk provisions in particular should resonate globally.

China is one non-TPP country that authors of the deal's cosmetics annex may have had in mind. While China is in the process of reforming its regulatory requirements to make them more risk- versus hazard-focused, foreign companies in particular currently face significant hurdles to reach the Chinese market with new cosmetic products and ingredients (Also see "China's Draft Cosmetic Regs Would Relax New-Ingredient Oversight" - HBW Insight, 1 Sep, 2015.).

A proposed overhaul of China's regulatory framework currently under consideration would shift the bulk of safety-assurance responsibility from Chinese authorities to manufacturers, similar to what is done in the US, replacing onerous premarket approvals with increased monitoring, product sample testing and adverse-event reporting on a postmarket basis.

Such changes would be in line with best practices promulgated by the TPP.

Specifically, the deal states: "Where a Party maintains a marketing authorization process for cosmetic products, that Party shall consider to replace this process with other mechanisms such as voluntary or mandatory notification and post-market surveillance."

The cosmetics annex promotes information-sharing between companies, specifically findings related to cosmetic ingredients safety and information gleaned through post-market surveillance.

"I think that's really meant to indicate the willingness on the part of regulators to cooperate more, to share information that could prevent, for example, crises, or so that they have a better understanding of the products that are on their markets," Lamoriello said. "It indicates an interest in ongoing cooperation."

The exec added that it's important to view the cosmetics annex in the context of the broader Technical Barriers to Trade chapter, which addresses transparency issues that apply to all sectors.

'Immediate And Direct Impact' Expected

Lamoriello noted that the TPP cosmetics annex also includes "practical day-to-day" regulatory standards – for example, not mandating separate registrations for minor line extensions, such as new color shades or fragrance variants; eliminating the need for notification numbers on product labels and certificates of free sale as a perquisite for market entry; and permitting firms to relabel, or over-label, products in accordance with local criteria after they clear customs but before they reach store shelves.

"These are things that are going to have immediate and direct impact on the ease and global costs of putting products on the market in the TPP countries," the exec said.

The cosmetics component also takes a hard line against animal testing to substantiate cosmetic product safety "unless there is no validated alternative method available to otherwise assess safety" – another principle the annex developers likely would invite China to take to heart as it revises its animal-testing requirements (Also see "China Coming Around To Animal Test Alternatives, Cruelty Free Says" - HBW Insight, 4 Sep, 2015.).

The document notes that existing animal test data may be considered as regulators assess product safety.

Another expected benefit of the TPP overall is the elimination or reduction of tariffs on products to participating countries. PCPC is still examining the deal's tariff schedules to understand how it will impact cosmetics companies.

"We would expect to see that in certain countries where tariffs are still significant, they are going to be lowered very quickly," Lamoriello said.

Implementation Pathway

The public release of the TPP text kicked off a 60-day public comment period on the deal and fervent political debate in the US regarding the pact's likely impact on American businesses and workers, among other contentious issues.

Democrats and liberal activists have been the deal's most vocal critics, though some Republicans, including the GOP's leading presidential candidate Donald Trump, also have expressed concerns.

President Obama may face an uphill battle in garnering the support he needs to get the deal through Congress, which is expected to approve or disapprove the TPP via up-or-down vote early in 2016 under fast-tracking authority secured in late June (Also see "Obama Scores 'Fast-Track' Trade Promotion Authority, Paving Way For TPP" - HBW Insight, 1 Jul, 2015.).

Lamoriello is optimistic about the TPP's prospects.

If the deal receives approval across TPP countries, there will be a period of implementation allowing each country to make regulatory changes in accordance with the accord's directives, she said.

Countries that require certificates of free sale for products seeking market entry, for example, or that require notification numbers to appear on product labeling, will be expected to revise their legislative and regulatory frameworks in line with TPP best practices, according to the exec.

Cosmetic regulations in the US likely will go unchanged, "because in many ways the US lives to up to some of the highest international standards and risk-based regulations for cosmetics," she said.

In fact, Lamoriello noted, much of the TPP's appeal and the advantage it poses for US industry and regulators "is having other countries live up to some of the best practices that countries like the US [embody] already."

However, the exec would like to see FDA's guidance regarding cosmetic GMPs modified to be more reflective of the ISO GMP standard.

The TPP text states that: "Where a Party prepares or adopts good manufacturing practice guidelines for cosmetic products, it shall use relevant international standards for cosmetic products, or the relevant parts of them, as a basis for its guidelines, except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued."

PCPC will be tracking the implementing regulations that each country puts in place, she said.

"If you see a problem in a country that is not living up to its commitment, now you have an opportunity to bring that case" to a TPP board, Lamoriello explained. "It would be great if it never has to come to that, but it may."

TTP May Give Direction To ICCR

Lamoriello said she hopes the principles of the TPP trade agreement will help to inform the future direction of the International Cooperation on Cosmetics Regulation.

While 60% of ICCR's membership already is part of the TTP (Japan, Canada and the US), the TPP text could serve to inspire and direct activities across ICCR's membership, which also includes the EU and Brazil.

At the ICCR's ninth meeting held Nov. 4-6 in Brussels, Lamoriello gave a presentation to attendees regarding regulatory convergence as highlighted in various emerging international trade agreements.

"I spoke about the TPP cosmetics annex in the hope that ICCR regulators would understand the broad trend and movement toward using regulatory convergence as both a way of ensuring consumer safety but also promoting trade," she said. "ICCR parties seemed very interested. This is a big development in the world of trade for our industry and for regulatory alignment [per] best practices."

Lamoriello also is optimistic that TPP will influence negotiations under the proposed Transatlantic Trade and Investment Partnership, another ambitious trade agreement being developed between the US and the EU.