Regulatory and supply chain issues affect the decisions of beauty companies

In this rapidly changing world, things change very quickly. For the Chinese cosmetics industry, it is the combination of rapidly changing regulations and supply chain problems. When I connect the dots in the beauty industry, playing it safe seems to be the underlying trend among cosmetics marketers and their suppliers.

The regulations continue to make headlines. Administrative measures for monitoring adverse reactions to cosmetics were issued on February 21. They will apply on October 1st. They aim to improve the safety rating and ultimately the quality of cosmetics, according to the National Medical Product Association (NMPA).

In essence, the new measure requires companies that have filed or registered cosmetic products, or are in the process of doing so, to set up post-registration monitoring systems for cosmetic adverse reactions. Any suspected case of a cosmetic product causing adverse effects on human health should be reported to the authority, in a timely and proactive manner. It’s similar to what we’ve seen in the Chinese pharmaceutical and medical device industries.

According to the provision, an adverse cosmetic reaction means a pathological alteration of the skin and its appendages, as well as damage to the health of a part or the entire human body, resulting from the normal use of cosmetics. Reactions are classified into three types based on severity: normal, severe, and extremely severe. Cosmetic adverse reaction monitoring refers to the entire process of collecting, reporting, analyzing / evaluating, investigating and managing information on suspected cases. While normal adverse reactions should be reported to the authority within 30 days of initial detection, serious adverse reactions should be reported within 14 days. Those that could cause extremely serious reactions must be reported within three days.

While proponents say there may be long-term gains, short-term pain for the industry is inevitable; an additional burden for many companies already stressed by a barrage of stringent regulations and supply chain disruptions. According to some industry experts, building a monitoring system from scratch would take time and money. Another real challenge relates to implementation. Compliance
Monitoring system aside, another big headache when it comes to regulatory compliance is the preparation of the safety assessment report. These reports, required by the cosmetic safety assessment technical guidelines, went into effect on January 1, 2022. It takes a huge effort to search for scientific evidence and ingredient safety data, which has created an artisanal industry, compiling and writing such reports from a third party.

This development makes sense when considering the importance of safety assessment reports in today’s product registration / filing. Under the new regulation, companies will be ordered to correct violations and suspend sales of related cosmetic products if:

  1. The safety assessment report is not provided accordingly;
  2. The safety assessment materials in the report do not meet the requirements and affect the determination of product safety;
  3. Ingredient specifications on quality and safety are not provided accordingly;
  4. Lack of safety evidence for ingredient applications in infant / child care products; And
  5. Other non-conformities that affect the determination of product safety. A formal safety assessment report will be required by 1 May 2024.

In an effort to facilitate compliance, NMPA released a draft for public comment, Key Outlines of Safety Assessment Report (simplified version) for General Cosmetic on February 24. It aims to complement the technical guidelines for the safety assessment of cosmetics issued at the beginning of 2022. It provides guidance on the writing and submission of safety assessment reports, as well as their review on standardized criteria.

With “safety first” first, Chinese cosmetics market players are looking for active ingredients with clear mechanisms of action supported by comprehensive scientific data. Those borrowed from the food industry seem to win, not least because the existing evaluation of these ingredients in food applications gives weight to the cosmetic ones during the registration / filing process.

For example, N-acetylneuraminic acid (NANA, SA) is associated with edible bird nest. Now, a recent development in NMPA’s new cosmetic ingredient registration is Beta-Nicotinamide Mononucleotide (β-NMN), another ingredient that originated within the food and nutraceutical category. β-NMN has been a buzzword in the wellness food industry since 2020. I vividly remember visiting several food fairs back then, the heavy marketing of it as “the next generation of anti-aging agent” in dietary supplements. However, the frenzy subsided when the State Administration for Market Supervision (SAMR) released a statement last year, noting that NMN has not obtained official approval for use in nutraceuticals.

While there is scientific research demonstrating its health benefits (mainly anti-aging) and safety in oral administration, I am trying to understand this latest development of β-NMN in cosmetic applications. So far no technical specification has been revealed in the NMPA publication on β-NMN, such as the INCI name or the original sources.

What is known so far is that it has been archived by Yuyao Lifespan Health Technology Co Ltd. and the ingredient has already been incorporated into a collection of face masks under a GeneHarbo brand, which is owned by GeneHarbor Investment Limited (a stakeholder of the filer ). Typically, the electronic archival certificate will be issued if you pass the NMPA review of submitted dossiers.

In an ever-changing environment, this “play-it-safe” mentality is reshaping the industry, which has witnessed brands and manufacturers alike, along with test service providers, all vigorously upping the ante for safety evaluation. and the effectiveness of cosmetics. And that inevitably led to a war of talent and skyrocketed costs. How will it end up on the market? The big players seem to be the winners.

Ally Dai
Freelance writer

Ally Dai is a freelance writer / independent consultant based in Shanghai. She has been in the beauty business for over 15 years. Previously a senior editor and industry researcher, she now works in content creation with publishing houses, event planners and public relations firms in the personal care and life sciences sectors.

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