US FDA to increase fees for color certification: stakeholders brace for market impact

The US Food and Drug Administration (FDA) has announced a fee increase for color additives effective December 9, generating mixed opinions among industry members. Manufacturers will pay ten cents more to get FDA approval for the color additives used in personal care products, a spike from US$0.35 to US$0.45 per pound (450g).

Since the manufacturing price will increase, smaller businesses brace for potential added financial pressure, whereas more prominent manufacturers are likely to accommodate this change while experiencing less impact.

This change is intended to help the FDA cover the rising costs of its certification program, which ensures the safety of colors used in the formulation of products like cosmetics and other beauty items.

Despite receiving less than 15 comments from stakeholders during multiple feedback rounds, the opinions were mixed. Some companies supported the fee increase, saying it would help ensure product safety, especially with rising costs due to inflation. 

However, other stakeholders have raised concerns that the fee hike is too steep and argued that a US$0.05 increase would cover the FDA’s necessary expenses.

Increase to cover FDA budget shortfalls

The FDA is raising the cost to certify straight colors — color additives that have not been mixed with another substance — from US$0.35 to US$0.45 per pound (450g). This cost also applies to lakes, which are created by chemically reacted straight colors and are used in lipsticks and eyeshadows. The minimum fee for each batch certified will also increase from US$224 to US$288. The fees for repacking and mixing certified color additives will see similar increases.

According to the agency, the fees have not been updated since 2005, apart from a minor correction in 2006. Over the years, increased costs related to equipment maintenance and staff salaries have contributed to a budget shortfall in the certification program, with expenses exceeding income by more than US$3 million.

Prominence of pigment

Color additives are a key component in many personal care products like makeup, shampoos and skin care items. Before manufacturers can use these colors, they must be certified by the FDA to ensure they are safe for consumers. The FDA tests samples from every batch of color additives manufacturers submit to ensure they meet “strict” safety standards.

Before manufacturers can use color additives, they must be certified by the FDA to ensure they are safe for consumers.Despite some companies’ speculation that the proposed fee increase might fund unrelated FDA initiatives, the agency asserts funds will replace old lab equipment, cover higher operating costs and ensure timely testing so products can reach the market without delays.

Market effects

Reluctant stakeholders worry that the higher fees might increase the manufacturing cost of personal care products, which would then be passed on to consumers as it may lead to higher product prices. This creates a ripple in the industry much more significant than a simple certification spike.

Justifying the announcement, the FDA says that without the price jump, it would struggle to keep up with the demand for color certification, which could slow down product approvals and impact the availability of personal care products on the market.

The agency estimates that manufacturers will need to spend about US$5,300 to familiarize themselves with the update. However, no direct economic benefits are expected from this adjustment.