August 31, 2022 PAO-08-022-CL-09
The value of the global anti-aging cosmeceutical market value sits at $38.62 billion. The anti-aging products market, distinctively those with antioxidants like vitamin C and E, is rapidly growing every day. By 2026, the global industry is expected to reach 60.26 billion, almost doubling over the 6-year period.1 Despite this demonstrated growth, the U.S. FDA does not recognize cosmeceuticals as its own categorization of products, and therefore provides no standardized definition of cosmeceuticals.
As of now, the FDA categorizes products as either drugs or cosmetics, with each product assigned to one or both categories on the basis of their intended use. Cosmetics, according to the FDA, are “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body...for cleansing, beautifying, promoting attractiveness, or altering the appearance.”2 Pharmaceuticals (drugs), on the other hand, are “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and “articles (other than food) intended to affect the structure or any function of the body of man or other animals.”2 Given these two definitions, a cosmeceutical is just a combination of a cosmetic and a drug, and, while the FDA recognizes that a product can be both, this crossover is not considered significant enough to be its own category.
Since the FDA doesn’t recognize cosmeceuticals as its own category, where does the term stem from? American dermatologist Albert Kligman, M.D., Ph.D., from the University of Pennsylvania, coined the term “cosmeceuticals” in 1984. For Kligman, cosmeceuticals represented, “a topical preparation that is sold as a cosmetic but has performance characteristics that suggest pharmaceutical action.”3 He conceived the term around the time of his experimentation with the popular drug we know now as tretinoin, known for its anti-aging effects on the skin.
Cosmeceuticals are present everywhere, and despite the uncertainty of its definition, almost 30–40% of any dermatologist’s prescription count across the world consists of a cosmeceutical.3 For instance, take the example of an anti-dandruff shampoo. Shampoo is considered a cosmetic, as it is used to cleanse hair, while an anti-dandruff treatment is considered a drug, as it is used to get rid of dandruff. Given these two key attributes, an anti-dandruff shampoo would belong in both the drug and the cosmetic categories.4 Other products in common use, such as mascara containing a serum to encourage eyelash growth, face cream with vitamin C to prevent wrinkles, and toothpaste with a whitening agent, all receive dual categorization from the FDA, while advertisers and consumers would consider these to be cosmeceuticals.
Accompanying the growth surge of cosmetic products containing active ingredients and solidifying their legitimacy in the public eye, a number of celebrities have endorsed this booming industry, citing life-changing results. From Bella Hadid publicly praising Dr. Sturm’s molecular cosmetics hyaluronic serum to Victoria Beckham and Khloe Kardashian expressing admiration for Bioderma’s H2O micellar makeup cleansing water to Constance Wu telling the New York Times that “If I want to be really glow-y the next day, I definitely use them,”5 personal recommendations for cosmetics containing active ingredients are now fairly common from celebrities and beauty influencers. Endorsements of this kind are also undoubtedly responsible for increasing consumer interest in the sector but not necessarily a measure of their effectiveness.6,7
In light of this widespread adoption, the FDA lags behind, willing to regulate so-called cosmeceuticals but neither to legally acknowledge nor approve them — in fact, the last time the United States Congress voted to regulate cosmetics was 80 years ago.8, 9 If cosmeceuticals contain active ingredients that are known to be beneficial to humans in some way,10 and if this industry is growing so rapidly and is so successful, then why hasn’t the FDA assigned it its own legal category? Are cosmeceuticals really as effective as they claim to be?
A substantial consideration around the effectiveness of pharmaceuticals is compliance with the regulations surrounding the products. While the cosmeceutical category is itself contentious, the FDA fully regulates the active ingredients that these products contain. For example, back in 2019 after a long delay, the FDA finally advanced its regulations to ensure sunscreen safety and efficacy. Tightening regulations around over-the-counter (OTC) sunscreen products included categorizing certain ingredients as safe and others unsafe. There are also some requirements around the effectiveness of these products. Under this new rule, two of the 16 active ingredients in sunscreens — zinc oxide and titanium dioxide — are now considered safe and effective, while two others (para-aminobenzoic acid [PABA] and trolamine salicylate) are considered ineffective. According to this new rule, the sunscreen labels must also list active ingredients to help consumers determine their effectiveness. “After more than 40 years, the FDA is at last taking serious steps to finalize rules that would require sunscreen companies to make products that are both safe and effective,” David Andrews, Ph.D., senior scientist at the Environmental Watch Group (EWG), said in a news release.11
To assess whether cosmeceuticals are efficacious, we must also evaluate the biological characteristics of the active ingredients in these products. The extraction process of the ingredients present in cosmeceuticals is essential to determine their effectiveness. Supplementary factors that collaborate in effectiveness include various physicochemical properties of the source material; the type and concentration of the extracting solvent; and the ambient pH, temperature, and pressure conditions of the extraction methodology, among others.3
Kligman suggested three questions to assess the effectiveness of most cosmeceuticals.3
There have been a multitude of studies conducted on the effectiveness of cosmeceuticals. Substantial clinical data exist on the effects of retinoic acid (RA), considered to be the most effective and well-substantiated compound for treating skin aging, wrinkles, and hyperpigmentation. Along with available scientific evidence on effectiveness for soy protease inhibitors and niacinamide present, these products are well established in the cosmeceutical industry. On the other end, although green tea and soy products have been popular for some time, the efficacy of these products has yet to be studied thoroughly. Current studies validate signs that these ingredients may be better at preventing signs of aging, as opposed to reversing them. This indicates that there is substantial room for green tea and soy products to grow in the industry.12,13,14
One study, a profilometric evaluation of photodamage after topical retinaldehyde and RA treatment, found a significant reduction of skin wrinkles and roughness after both 0.05% retinaldehyde cream and 0.05% retinoic acid cream treatments.15 Another randomized, controlled trial was conducted by Sorg et al., who evaluated the effectiveness of topical retinol (ROL) in improving the clinical signs of naturally aged skin. This study comprised 36 elderly subjects in a senior citizen home to whom topical 0.4% ROL lotion or its vehicle alone was applied on either the right or left arm up to three times per week for 24 weeks. Clinical assessment was made by using a semiquantitative scale and biochemical measurements from skin biopsy specimens. Concluding the trial, there were noteworthy differences between ROL-treated and vehicle-treated sides for fine wrinkling scores. In addition, histology showed that ROL treatment significantly increased GAG expression and procollagen compared with vehicle.14 Taking into consideration these consistent results across various studies, retinoids have been shown to be effective in treating fine lines, wrinkles, and hyperpigmentation. Although most of these studies have been conducted on prescription retinoids, there is evidence to support that some OTC retinoids are also effective to a lesser extent.
Several studies also investigate the potential of as-yet unused, biologically derived ingredients for use in cosmetics. A 2020 study investigated the clinical effectiveness of cosmetics containing adipose-derived stem cell–conditioned medium (ADSC-CM), which contains various growth factors, cytokines, and bioactive components.16 Researchers divided middle-aged women with hyperpigmentation into two experimental groups and a control group, with experimental group 1 (E1) receiving 3 mL of 5% ADSC-CM and experimental group 2 (E2) receiving 3 mL of polymersome-containing 5% ADSC-CM twice a day for 28 days. The results of these studies demonstrated the efficacy of stem cell conditioned media, as E1 saw a significantly higher rate of skin improvement than the control group, and E2 had the highest skin improvement rate across all items measured: skin moisture content, transepidermal water loss, melanin and erythema of lid-cheek, eye wrinkles, and skin roughness of lid-cheek. Not only is this one of the first studies to verify the effectiveness of ADSC-CM through direct clinical skin tests, but it also suggests formulation methods to improve absorption rate of the active ingredient. The researchers expect both follow-up clinical studies to confirm the efficacy of ADSC-CM and to broaden the current understanding of optimal formulation.16
These active ingredients adhere to Kligman’s guidelines for confirming the efficacy of a cosmeceutical: the ingredient must penetrate the skin effectively, have a defined mechanism of action, and exhibit specific clinical effects with continued topical use.12 To ensure safety and efficacy for consumers, studies on cosmetic formulations that incorporate these and additional active ingredients must continue. Active ingredients such as these, when rigorously tested for safety and efficacy, show promise for the cosmeceutical industry.
The FDA requires drugs to undergo rigorous clinical trials but is historically lax when it comes to testing cosmetics, potentially allowing harmful cosmetics to reach consumers. For example, the popular hair product line WEN Hair Products by Chaz Dean Studio NYC faced several lawsuits for allegedly making women go bald.17 This company’s cleansing conditioner, which was endorsed by many celebrities, resulted in baldness, rashes, scalp irritation, hair breakage, and discoloration. The lawsuit, filed by the law firm Christiansen Davis LLC, states that the WEN products contain “active ingredients (that) act as a depilatory and caustic agent, either by causing a chemical reaction that damages the hair strand and/or follicle.”17
Another report also discusses regulations that are needed around cosmeceuticals because sunscreen hurts coral reefs.18 This article discusses how Key West, Florida, has banned popular sunscreens containing oxybenzone and octinoxate. These ingredients are widely present in many popular sunscreen brands like Banana Boat, and, while they help protect from UV rays, they can wash off in the ocean while the wearer is swimming and damage coral reefs. It is important to examine and evaluate the ingredients in the products that we use, as they can be harmful to our skin or affect other factors. Additionally, the state of Hawaii urges people to instead buy skin-care products that contain titanium oxide or zinc oxide, which are considered natural alternatives to the two chemicals that will soon be banned from sale in Key West.20
“It’s hard to think of a category that is less regulated [than cosmetics]. Even pesticides have more regulations," says Scott Faber, SVP for government affairs at the EWG.19 Negative reactions to a cosmeceutical product, especially for personal care, are very common and can cause adverse growing short term and long-term health concerns. A study conducted at the Center for Environmental Research and Children’s Health at the University of California–Berkeley assessed changes in teens’ urine tests after discontinuing the use of their personal care products. These tests portrayed a significant decrease in artificial chemicals and parabens that are often found in many cosmetic products (usually added to prevent mold). According to the American Cancer Society, studies have shown that parabens have weak estrogen-like properties, and a study from 2004 found traces of parabens in breast cancer samples.20
As cosmeceuticals are not identified as their own category, manufacturers seeking to bypass certain regulatory testing requirements before being placed on the market tend to slip these products under the regulatory radar as pure cosmetics. This challenges both safety and efficacy measures for these products. While the FDA requires drugs to undergo testing and policy requirements, cosmetic products do not require the same extensive testing or pre-market approval; therefore, many cosmeceutical companies avoid publicizing their product as a drug and more as a cosmeceutical in effort to avoid labeling and regulations for products that also meet the definition of a “drug.”21 Because of this, cosmetics sellers looking to avoid regulatory hurdles frequently do not bring the “cosmeceutical” nature of their products to the FDA’s attention despite promoting bioactive results to customers, and as a result this has led to notable incidents where customers suffered injury.22, 23
As health-based beauty continues to expand and increase its offerings, the cosmeceutical industry makes an impact that is here to stay. This recent trend of cosmeceuticals is creating crossovers between industries, as cosmetics are incorporating health benefits through mergers and acquisition efforts.10,24 However, while cosmeceuticals are bridging the gap between cosmetics and pharmaceuticals, in theory allowing both beauty and pharma companies to strengthen brand credibility and expand their customer portfolio across various expertise, interest from the cosmetics and the pharmaceutical sectors have not been equal. In fact, as the beauty industry gradationally aims to play a role in the consolidation of cosmetics and pharmaceuticals, we have not yet seen the pharmaceutical industry moving toward the beauty manufacturing sector as much.25, 26 The pharmaceutical industry has the potential to be a major stakeholder in the cosmeceutical industry, but so far the major drive for innovation and change in the cosmeceutical industry has come from the cosmetics sector.
As the industry modernizes its product offering, cutting-edge technologies like 3D printing and artificial intelligence (AI) are being incorporated into the cosmetics manufacturing process and generating insights. Cosmetic companies are also using AI to allow beauty companies to make data-driven decision on their strategies.25 According to InsightAce Analytic’s market intelligence August 2022 research report, the global market for AI in beauty and cosmetics was valued at $2.70 billion in 2021, and it is expected to reach $13.34 billion in 2030, growing at a promising CAGR of 19.7% from 2021 to 2030.27
The cosmetics industry is also innovating through increased product personalization. Recent examples of this are function of beauty’s clarifying shampoos and skincare products, which are customized for consumers on the basis of a 20-question online quiz tailored to understand customers’ individual skin concerns and Sephora’s virtual try-on services at Sephora Virtual Artist. Another example, which incorporates a customer-facing use case of AI, is e-commerce site Nykaa’s debut of L'Oréal's advanced, Al-powered virtual try-on technology, ModiFace. ModiFace technology allows photo-realistic results and AI-enabled shade calibration. The ModiFace Technology, just like Sephora’s virtual try-on, enables virtual try-on on Nykaa's website and mobile app, helping shoppers purchase their desired beauty products across categories.27 This increased demand for technological advancements paired in the cosmetics industry is expective to positively impact the growth of this sector.
Another advancement taking place in this industry is making is biologically active cosmetic products, an advancement that is already taking place currently. Studies have been done with marine-derived compounds with potential uses as cosmeceuticals and the effects of edible seaweed for anti-inflammation and antioxidant properties. To move forward with the use of seaweed in cosmeceuticals, the possibility of using seaweed for packaging these products in order to drive sustainability is also relevant. The material specifically degrades naturally in four to six weeks and can be disposed of via in-home recycling.28
Investment in the shampoo industry has increased from $197.99 million in 2019 to $1.08 billion in 2020, representing a 445% increase, and is still rapidly increasing. Most of the innovation from 2019 to 2020 was due to the fatty acid present in shampoos, which promotes hair growth, shine, and scalp health. L’Oréal is also leading this shampoo industry growth with patent US10682303B2, which is valued at $250,000 and claims a cosmetic composition to be applied to keratin fibers to increase the effectiveness of a shampooing product, reinforcing its position as a big player in the game.28
Allergy-modified cosmetics is also a booming sector in cosmeceuticals with significant industry growth. From just 2020 to 2021, this industry has grown 360%, valued at $643.55 million in 2020 and $2.96 billion in 2021.28 An example of a new patent in this area is EP3628305A4 by Yangshengtang Anji Cosmetics Co Ltd. This patent was valued at $83,000 in 2020 and stands out as an interesting technology area because it claims to use a “combination of D-pathenol, allantoin, and oat kernel extract in protecting mast cells thereby anti-allergy” in skin cosmetic compositions.28
While the FDA’s definitions of these products are broad, providing the agency with flexibility to decide on regulations, the end result is that the agency avoids taking responsibility for certain products or minimizes the requirements it does impose.29 As government measures move slowly, the major reason that the FDA hasn’t considered cosmeceuticals its own category is that they perceive current categories as sufficient for current-day purposes. While drug makers rely on the FDA for guidance, self-policing of products has been the standard in the cosmeceutical industry.23 As a focus on cosmetics isn’t on the FDA’s radar now, we hope that innovations in cosmeceuticals within the industry bring attention to this sector so that the FDA considers the implications of this trending innovation between cosmetics and pharmaceuticals.
References
Ameena Pathan works in strategic marketing and content development at That's Nice, LLC and is a contributor at Pharma's Almanac. She specializes in professional social media marketing, pharmaceutical marketing, online content production, web design, copywriting, and project management. She holds an MBA in international business from the Miami Herbert Business School.
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