CSAR Exclusive Interview: Animal Testing, New Ingredients and What Next? (Full Transcript)

*For the full video recording of the exclusive interview, please visit our webinar page.

Jon: Hello everyone! I am Jon, I am the senior editor of Chemlinked. Thank you all and welcome to todays’ exclusive interview. On June 29, 2020, the State Council officially issued the Cosmetic Supervision and Administration Regulation or CSAR, and announced that the regulations will take effect on January 1, 2021. This means that the Cosmetics Hygiene Supervision Regulations, which has been in effect for over 30 years, is going to be abolished, and the cosmetics industry will enter the new era with both updated policies and regulatory environment.

So this leads to several questions such as: What measures are uniquely Chinese? What are the changes and impact of the new ingredients management? How will China regulate cosmetic animal testing? What are the supporting rules of CSAR?

Today, we have invited three guests to share some information and discuss this with us.

First, let us welcome Hedy, the senior regulatory analyst at ChemLinked.

Hedy: Hi everyone, I’m Hedy. Glad to have the opportunity to share my opinion on CSAR.

Jon: Next, let’s welcome Vicky, Senior Regulatory Technical Engineer at REACH24H.

Vicky: Hello, everyone. I’m Vicky. I am mainly engaged in cosmetic registration and filing work, hope that my information will be helpful for your compliance work.

Jon: Finally, let’s welcome Joanna, senior regulatory consultant at REACH24H.

Joanna: Hello everyone. Thanks for having me. I'm Joanna, I’m mainly focusing on the research of cosmetic ingredients. I am glad to be here to share my personal opinions about the cosmetic regulations.

Measures with Chinese Characteristics

Jon: Thanks for being here today. This new regulatory system, the CSAR which will soon be implemented, is attracting a great deal of attention within the industry. So straight to the first question, which measures do you think are the most uniquely Chinese? Was there any inevitability in its formulation?

Vicky: In my opinion, I think that the pre-market approval has the most unique Chinese characteristics. Compared with the Western world, for example in the EU, cosmetics companies are not required to get approval before market entry. But in China, according to the new CSAR, we could see that special cosmetics and high-risk ingredients are still subject to pre-market registration.

And you mentioned the inevitability, I think that is based on China’s national conditions. For a long time, Chinese government tended to choose relatively conservative supervision measure, or pre-market approval. This regulatory mode is not only for cosmetics, but also for chemicals, medical devices and disinfection products. This approach has two drawbacks. First, is about time, it will cost around 6 to 12 months or even longer to get the approval license, which may have a negative effect on marketing. Second, is about responsibility. “Who will take the responsibility for these products?” The government or enterprises? It was not very clear for a long time since all the products were being reviewed by the government.

But according to the New CSAR, we can see that China has adjusted their way of regulation, they realize that “not one size fits all”, so they divided the products and the ingredients to low risk and high risk. For the low-risk products, simplifying the process will give the enterprises more freedom, to let the market choose the product, instead of the government. But for the high-risk products, NMPA will still keep pre-market approval in order to ensure the consumers safety.

Hedy: I agree. Large producing cosmetics countries in Asia, such as South Korea and Japan, will inevitably adopt a pre-approval system. Their functional cosmetics and quasi-drugs also need to be approved before entering market.

Joanna: Compared with China’s pre-market approval of new cosmetic ingredients, Western world’s has developed a quite mature safety assessment mechanism to guarantee the safety of cosmetic ingredients.

Since China’ cosmetic industry started off late, there is definitely a gap between China and the Western world. Besides, the establishment of safety assessment mechanism and the training of qualified personnel in China does not have a supportive platform. Hence it is hard to abandon the pre-approval system directly. The notification management of low-risk ingredients can be considered a huge step for Chinese competent authority.

Vicky: Agree. In the short and medium term, China will maintain the pre-market approval for high risk ingredients and products.

Jon: So Joanna, how about you, in regards to these measure that are uniquely Chinese?

Joanna: In my opinion, it would be the risk management. To be more specific, China will regulate the ingredients and finished products based on their characteristics. For instance, high-risk ingredients or special cosmetics will be subject to registration while low-risk ingredients or general cosmetics will only require the notification.

Meanwhile, for any ingredient or cosmetic product, it is also required to conduct the pre-market risk assessment and post-market risk monitoring. Since China is the world’s second-largest country in cosmetic consumption, the number of cosmetics application is enormous, approximately 1.8 million applications by now, but the administrative resources is extremely limited. In order to solve this problem, establishing a good risk management mechanism is urgent.

Hedy: While Vicky and Joanna both focused on the pre-market measures, I would like to talk about two distinctive post-market measures. The first one is to include e-commerce platform operators and cosmetics online sellers under supervision. We all know that China’s e-commerce industry developed rapidly, and the scale of transactions has maintained rapid growth in recent years. In 2019, the total e-commerce sales of cosmetics were 147.3 billion yuan, and the proportion of channels reached 47.3%. E-commerce has therefore become the main channel for cosmetics sales.

However, consumers are not very satisfied or do not have enough trust in e-commerce shopping. During the marketing process, some cosmetics online sellers exaggerate the promotion of products or sold fake and inferior products. Moreover, there are also deficiencies in the internal management system of the e-commerce platform. So it is essential to include the platform operators and online sellers into the scope of supervision and expect that the new regulation could promote the platform to strengthen the management of online sellers. So the market order can become more standardized.

The second measure is implementing a quantitative grading management system. Through the establishment of cosmetics production and operation enterprise safety and credit files, the supervision resources could be reasonably allocated. The government will increase the frequency of supervision and inspection of enterprises with bad credit records and implement joint punishments to build an honest and trustworthy cosmetics market environment.

New Ingredient Management

Jon: I understand that the new cosmetic ingredients are going to be subject to great changes. In addition to the implementation of classified management based on risk level as you mentioned before, there is also a three-year monitoring period for registered/notification of new ingredients. During this time the registrants and notifiers will be required to submit annual reports on uses and safety. Additionally, they are responsible for monitoring work. So how will this new management scheme impact the industry?

Joanna: The most significant influence is that ingredients registration is getting smaller. At present, the registration process is tedious as the requirements are quite strict. It generally takes several years for enterprises to register a new ingredient as the documents may need to be supplemented multiple times, even if it is only a high molecular polymer without transdermal absorption or edible ordinary vegetable oil.

Hedy: Yes, as far as I know, in 12 years from 2008 to now, only 10 new ingredients were approved, while the application number is more than 300. We can see the pass rate is very low. So, the enthusiasm of companies to register new ingredients is negatively affected. New ingredients that have been proven to have good performance and widely used internationally cannot be used in China. As such, many foreign cosmetics have to modify their formulation when entering the Chinese market, which significantly hinders industry innovation, and also widens the development gap between Chinese and foreign cosmetics in terms of technology and innovation.

Joanna: Yes, but these things will be different in a few months. Under the new regulations, low-risk ingredients are available for use after quick notifications. Also, China will release the Standard for Registration and Notification later to further clarify the requirements and review key points. It is believed that the enterprises’ enthusiasm for new ingredients application will be significantly improved.

Vicky: Another impact is that it will prompt raw material manufacturers and finish product manufacturers conduct joint supervision of both ingredients and products. During the 3-year monitoring period, if the new ingredients are canceled by the government, the cosmetics with this ingredient should also be canceled accordingly. This innovative twin-track supervision will further ensure the consumers’ safety.

Hedy: Article 9 of the CSAR clearly states that China encourages and supports the use of modern science and technology combined with the national traditional superior projects and special plant resources to research and develop cosmetics. In the future, a large number of plant-based cosmetics with Chinese characteristics may appear on the market, which may have a certain impact on the existing plant-based cosmetics. Foreign companies could also consider the research, development, and production of such plant-based products.

In addition, the CSAR requires cosmetic ingredients, and packaging materials in direct contact with cosmetics shall comply with the mandatory national standards and technical standards. But the actual situation is that many cosmetic ingredients such as plant extracts lack corresponding mandatory national standards and technical standards. In the future, there are going to be more mandatory standards related to cosmetic ingredients. The compliance responsibilities of enterprises are relatively heavier but also clearer.

Jon: The classified management of new cosmetic ingredients seems to be of great benefit to enterprises. If so, what suggestions could you give to companies that are considering trying to enter the Chinese market?

Joanna: First, it is recommended to start preparing early because it takes several months for the applicant to prepare the documents. For general ingredients, it possibly takes a year or more for testing. Second, based on our current understanding, although the new draft adopts a notification system for low-risk ingredients, the safety requirements will not reduce. Therefore, enterprises still need to make adequate preparations in the process of data preparation. Third for enterprises intending to entrust a third-party agent to aid in application, they shall conduct RP evaluation and choose a qualified agent as well.

Safety Assessment and Animal Testing

Jon: It was last year that Draft for the Administrative Measures for Filing of Non-special Use Cosmetics was released which stipulated that animal testing could be replaced by risk assessment documents for imported general cosmetics. Now, starting from the finalization of CSAR, whether China will move away from animal testing for imported general cosmetics, has been the most burning question in the industry for a long time.

However, both the CSAR and recent subsidiary regulations give no clear or specific answers in this regard. Would you be willing to predict the possible regulatory trends for animal testing in China?

Hedy: First of all, we need to make clear that the Chinese government has always been relatively conservative in terms of animal testing. It is unlikely that animal testing will be banned entirely in a short time. But don't' be upset. We can still be positive because the animal testing exemption is undoubtedly the future trend.

On one hand, China has made significant progress in moving towards a cruelty-free cosmetics sector. In 2013, China used safety assessment reports as alternatives to exempt mandatory animal testing on domestic non-special use cosmetics. In 2015, 2018 and 2020, China issued three safety assessment-related draft guidance, group standards, and technical guidelines to provide clear standards for safety assessment. In 2018, China extended the cross-border e-commerce transitional policy. Cosmetics imported in this mode shall be supervised as personal articles, not subject to cosmetic registration or notification as well as animal testing. Until March 2019, China NMPA has approved seven alternatives to animal testing. And China has always committed to exchanges and cooperation with international associations such as IIVS to promote the verification and application of alternative methods.

On the other hand, China has been trying to keep up with the international pace. Many regions in the world are banning animal testing, such as the EU, Australia, India, Colombia, and so on. China will also follow the international trend eventually.

At present, whether imported general cosmetics can be exempted from animal testing still needs to wait for the official information. But I believe in the future, China will have more indirect or direct measures to help gradually eliminate animal testing. And there will be further developments in the alternative method field in China, and more alternative methods will be accepted and released.

Joanna: The current idea of NMPA is similar to Europe. Some products can choose to use safety assessment to replace the animal testing. But as I said before, the safety assessment of both assessors and assessment methods in China are not as mature as EU countries. In the market, there are many laboratories that can provide traditional animal testing services, but few institutions that can provide safety assessment services. Moreover, enterprises and associations have relatively weak technical capabilities for safety assessment. If the animal testing is directly exempted and the safety assessment is fully adopted, there will be a result that the institutions cannot provide the service under the current market conditions. The end of animal testing is a trend, but it needs to accord with the actual situation of China.

Vicky: Yes, and based on the draft of Technical Guidelines for Cosmetic Safety Assessment, it says that “If the conclusion of the safety report is not sufficient to rule out the risk, the toxicology testing should also be used for product safety assessment.” Does it mean that if the conclusion can rule out the risk, that the toxicology testing would be unnecessary? The government has not made it clear. I think the good news is we can see that animal testing exemption may become a trend in the near future. But how does this work in practice, we still have to wait for the details.

Jon: Vicky, does the Draft Guidelines you mentioned before specify the detailed requirements for the safety assessment report and safety assessor?

Vicky: Yes, this draft clarifies many details. For the safety assessment reports, the requirements for ingredients and finished products are quite different. For ingredients, the safety assessment mainly focus on the raw material itself, such as the properties, quality control, toxicological data, etc. While for the finished product, it not only focus on the safety assessment of all ingredients, but also considering the overall stability of the product, even the interaction of the package material and the content.

Regarding the safety assessors, they need to have professional background, such pharmacy, chemistry or toxicology. And at least 5 years relevant working experience. They need to understand the cosmetic production process, quality and safety control requirements, toxicological assessment methods and so on. These requirements are no doubt a very big challenge for the enterprises, especially for some small ones. They may rely on third parties like ChemLinked to complete safety assessments.

Jon: How about the overseas safety assessment reports and safety accessors?

Vicky: We are also very concerned about this, but at present, the government didn’t make it clear. We will keep you informed of any updates when they are available.

Jon: So, if the imported general cosmetics could be exempt from animal testing, what do you think the impact would be?

Hedy: At present, many foreign brands such as Lush, NYX, and Alba Botanica have not entered China due to animal testing. But the scale and potential of the Chinese market are huge and such brands also want to get a piece of cake. We know that the Body Shop once tried to enter China in 2014 through airport duty-free stores, but arouse resistance from foreign consumers. In consideration of public opinion, cruelty-free brands have to give up the Chinese market for now. If imported general cosmetics can be exempted from animal testing, it is undoubtedly a great benefit for these brands. They could enter China without any worries.

In recent years consumers have increasingly favored clean beauty, which also includes cruelty-free cosmetics. They may quickly occupy the Chinese market with this advantage. Currently, the share of imported cosmetics in the Chinese market occupied an overwhelming advantage. The flood of more imported brands is bound to have a certain impact on local Chinese companies; they also bring about fierce competition to the existing imported brands. It will also force companies to conduct product research, development and innovation, and launch more competitive products.

Joanna: From a regulatory perspective, the exemption of animal testing for imported general cosmetics will help the government to accumulate experience in the supervision and management of safety assessment. If China adopts the animal testing exemption for imported general cosmetics, it may be extended to imported special products when the conditions permit.

Upcoming Subsidiary Regulations

Jon: It is said that NMPA will successively release subsidiary regulations of the CSAR. Is there any internal information on the subsidiary regulations that you could share with us?

Hedy: The CSAR will be officially implemented on January 1, 2021. In less than half a year, China will successively release several supporting documents, including 4 administrative rules and 11 or 12 normative documents. For example, the draft Administrative Measures on Cosmetic Registration, Technical Guidelines for Cosmetic Safety Assessment have been released in July.

Those that will be released next include regulations on Cosmetics Labeling, Toothpastes, Efficacy Claim Evaluation, registration and notification dossiers standard, GMP, supervision and inspection on domestic and foreign companies. This speed and pace are unprecedented, and China's cosmetics regulatory system will be completely updated.

Regarding these upcoming regulations, ChemLinked will report and interpret these at the earliest possible date and quickly publish webinars and translations. I also recommend you to follow our CSAR featured page to get the latest news.

Vicky: As Hedy mentioned, the cosmetics regulatory framework will be overhauled. The three top concerns are about new cosmetic ingredients registration, safety assessment and efficacy evaluation. Current situation is that, NMPA release the relevant draft and seeking for public opinions.

During this period, we will study the draft, and communicate with the officials, participate in the training organized by NMPA to ensure that we could sharing the comprehensive guidance and a complete precautions to our clients, to assist them to achieve a smooth transition to the new policies.

Hedy: If we got any internal news information, ChemLinked will share it with you as soon as possible.

Joanna: As for the three businesses mentioned by Vicky, I would like to say that we not only have a complete system for the test and data preparation of new ingredient registration but also have EU-certified safety assessors and toxicology experts will play a significant role in the safety assessment of finished cosmetics. In addition, we are currently expanding our network with domestic efficacy laboratories to improve our efficacy testing capacities. Please feel free to contact us if there is any need.

Jon: I believe this is all the time we have for todays’ interview. I think this discussion was quite informative and detailed. And I would like to thank, Hedy, Vicky and Joanna for taking the time to be here today.

Now, while the overhaul of China’s cosmetic regulatory framework is a great challenge it can also be an opportunity for enterprises. And to maximize these opportunities remember that Chemlinked is backed by an internal cosmetic regulatory team which consists of experienced specialists who have a strong industry and academic backgrounds. Chemlinked will offer a full range of services about CSAR and its subsidiary regulations including comprehensive and consistent news reporting and interpretations, webinars, consultation, workshops etc.

So we hope to help cosmetic stakeholders to prepare to seize these new upcoming opportunities!

Stay tuned with Chemlinked and see you all next time!