Understanding OTC Regulations in the U.S. and Their Relationship with Cosmetics

The global cosmetics and personal care industry functions within a diverse regulatory landscape, with significant differences across markets. One major distinction is in product classification. For instance, what is regarded as a cosmetic in the European Union (EU) or the United Kingdom (UK) may be classified as an Over-the-Counter (OTC) drug in the United States. This divergence influences the compliance strategies needed for entering global markets and highlights the importance of understanding these regulatory frameworks.

Defining OTC Products and Their Regulatory Landscape in the U.S.

Over-the-counter (OTC) drugs in the United States are regulated by the Food and Drug Administration (FDA) under the Federal Food, Drug, and Cosmetic Act (FD&C Act). Unlike cosmetics, OTC drugs must either adhere to specific FDA monographs or undergo the New Drug Application (NDA) process.

The FDA distinguishes between cosmetics and OTC drugs based on the product’s intended use, which is determined by claims, ingredients, and mode of action. Key criteria include:

• OTC Drugs: Products intended to prevent, diagnose, mitigate, treat, or cure a disease or that affect the structure or function of the body. They require compliance with an FDA OTC monograph or a New Drug Application (NDA).
• Cosmetics: Products applied to the body for cleansing, beautifying, promoting attractiveness, or altering appearance without affecting bodily functions or structure.

Key Differences Between OTC Drugs and Cosmetics

A key difference between OTC products and cosmetics is their claims and active ingredients. Examples commonly include:

• Sunscreens: In the EU and UK, these products are classified as cosmetics, while in the U.S., they are considered OTC drugs due to their claims of sun protection and the requirement for active ingredients.

• Anti-acne products: In the U.S., products containing benzoyl peroxide or salicylic acid are classified as over-the-counter drugs, whereas in the EU and UK, they are considered cosmetics if their intended purpose is beautification.

• Antiperspirants: In the EU and UK, these products are classified as cosmetics, while in the U.S., they are considered over-the-counter drugs due to their effect on sweat gland function.

Key Regulatory Requirements for OTC Products in the U.S.

Manufacturers of OTC drugs must adhere to strict FDA regulations.

1. OTC Monographs and Enforcement: The FDA’s Drug Monograph system establishes a standardized framework for allowable active ingredients, dosages, formulations, and labeling.
2. Good Manufacturing Practices (GMP): OTC products, unlike cosmetics, must comply with the pharmaceutical-grade GMP outlined in 21 CFR Part 211 to ensure quality control and consistency in products.
3. Drug Facts Labeling: Over-the-counter (OTC) drugs must include standardized “Drug Facts” labeling, which features active ingredients, usage instructions, warnings, and expiration dates.

4. Facility Registration and Product Listing:
5. Starting October 1, 2024, the FDA’s Electronic Drug Registration and Listing System (eDRLS) will require listing OTC monograph drug products using the current Marketing Category and Application Number values.
6. The terms “OTC monograph final” and “OTC monograph not final” have been replaced by “OTC monograph drug” to reflect the new definition established for user fee purposes.
7. The use of OTC monograph CFR parts has been discontinued. Companies are now required to provide the appropriate Monograph ID for products marketed under a final order. For instance, you would use “M014” for an otic drug product that falls under OTC Monograph M014: Topical Otic Drug Products for OTC Human Use.
8. If a drug is marketed under 505G(a)(3), this designation must be included in the Application Number field.
9. Companies should update their drug listings during the annual establishment registration renewal and drug listing certification period, starting October 1, 2024, to ensure compliance for the calendar year 2025.

5. Efficacy and Safety Testing: OTC products often need clinical validation to support their claims, particularly sunscreens, anti-dandruff shampoos, and skin treatments.

Navigating the Compliance Landscape

Understanding whether a product falls under cosmetic or OTC drug regulations is critical for brands seeking to enter the U.S. market. Key compliance strategies include:

• Early Classification Analysis: Assess claims and active ingredients to determine whether a product requires OTC compliance.
• Regulatory Labeling Review: Ensure packaging and marketing meet FDA definitions and requirements.
• Collaborating with Regulatory Experts: Partnering with compliance specialists simplifies adherence to evolving FDA standards.

Conclusion: The Intersection of OTC Drugs and Cosmetics

The classification of cosmetic products in the EU and UK versus OTC drugs in the U.S. highlights the need for a customized regulatory strategy. As demand for multifunctional products rises, understanding these regulatory differences early in the product lifecycle is essential for smooth market entry, compliance, and consumer trust.

For businesses, investing in regulatory expertise is not just about compliance; it’s key to gaining a competitive edge in the global marketplace.