Marketing Cosmetics: Avoiding Drug Claims and Crafty Tactics

Jan 19, 2022by Heather Smith

Marketing strategies for cosmetics companies are designed to tell consumers what a product will do to their appearance. The strength of the language used may make a person more or less likely to buy the product, and companies know this. However, there are standards that a cosmetics brand must follow when writing their product description. Simply changing a single word can change the claim being made from a cosmetic one to a drug claim.

Soothes dry skin = cosmetic ||| Heals inflammation = drug

Reduces the look of age spots = cosmetic ||| Eliminates age spots and suppresses melanin = drug

Smoothes wrinkles and softens skin = cosmetic ||| Stimulates collagen and increases cellular repair = drug

See the difference?

Cosmetics claims are not allowed to cross into the realm of drug claims; but deciphering cosmetic claims and marketing can be tricky. 

North American Cosmetics Regulations

According to Health Canada, a cosmetic is defined as: 

“Any substance used to clean, improve or change the complexion, skin, hair, nails or teeth. Cosmetics include beauty preparations (make-up, perfume, skin cream, nail polish) and grooming aids (soap, shampoo, shaving cream, deodorant).”

The Federal Food, Drug, and Cosmetic Act defines cosmetics by their intended use as:

"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" [FD&C Act, sec. 201(i)].

In Canada, a product is legally classified as a drug if it makes claims to modify body functions or to prevent/treat disease. In the USA, drugs 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" [FD&C Act, sec. 201(g)(1)].

In both countries, getting a product to the market that is classified as a drug is an extensive process with much higher standards for safety, manufacturing, testing, and labeling.

Health Canada does not regulate cosmetics. Instead, Canadian Ad Standards acts as a watchdog to ensure cosmetics are not marketed with false or misleading claims.

Registration of cosmetic products in the USA is voluntary. There is no approval process prior to release, but the FDA will issue warnings – and it is illegal for companies to make unapproved drug claims. 

It may surprise many people to learn that cosmetics are not required to be tested for safety, even if they contain (allowable) substances that could be classified as drugs.

While a large majority of companies are ethical beauty brands, there are situations where crafty marketing can blur the lines between cosmetics and drugs. 

Drug vs Cosmetic

When something becomes classified as a drug, it goes through different stages of testing and has different labelling requirements. This doesn't mean it requires a prescription. Once it's approved, it is assigned a DIN (drug identification number) or a NPN (natural product number). It may then be sold, often over the counter. But the marketing and product claims used are drug claims, not cosmetic.

Some examples:

    • Retinoic acid and hydrocortisone are two examples of ingredients that can only be used as drugs. They are prohibited for use in cosmetics (though they may be available over the counter, they are still drugs). A consumer might buy/use them for cosmetic reasons, but the brand selling them had to go through the process of gaining drug status.
Salicylic acid and Allantoin are two examples of ingredients that might be marketed as either a drug or a cosmetic, depending on the preparation and the particular claims made.

    Salicylic Acid:

      • A beta hydroxy acid effective for treating acne, dandruff, and other skin conditions through enhanced exfoliation and other mechanisms.
      • Requires a physician’s prescription if it is a concentration >20% or if the pH of the final product is <3 (note that particular preparation is suggested for plantar warts, not face peels).
      • If sold over the counter, salicylic acid is considered a drug if:
      • It is marketed with phrases such as: active ingredient, reduces acne, improves scars, prevents acne, treats acne, kills acne bacteria (phrases that claim it modifies body function or treats disease).
      • If sold over the counter at <2% concentration, salicylic acid can be considered a cosmetic ingredient, provided the claims used to market it do not imply any drug effects like treating acne.

    So you could have two identical products side by side, each with 1% salicylic acid. The one that says "active ingredient, Treats acne" is a drug and went through the drug approval process. The product that says "Reduces oil, deep cleans pores, suitable for acne prone skin" is marketed as a cosmetic only and had fewer hoops to jump through to get to market.


      • An over-the-counter skin protectant with wound-healing effects. If a marketing claim declares it as an active ingredient, it makes the product a drug (i.e., for “minor scrapes and burns” or “relief of poison ivy and insect bites”).
      • If you make no claims, it remains a cosmetics ingredient. It is generally recognized as safe and included many innumerable products that do not market it with a drug claim.

    A third example where marketing gets very fuzzy and the lines between cosmetic ingredients and drug effects are sometimes crossed is in the hempseed vs CBD oil world. There are a lot of inaccurate and misleading labelling practices to know about right know about.

    Active Ingredients

    photo showing orange slices doing exercise. Active Botanicals.

    For a drug, the “active Ingredient” is the actual ingredient that makes the product work. It has a drug monograph and will have been registered with a DIN or NPN (drug identity number or natural product number).

    When it comes to cosmetics, the term “active ingredient” is sometimes used as a marketing term for something believed to have a true effect on your appearance. While it might be true, if you market the results as actively altering the biology of the skin, then you are identifying it as a drug. This is where marketing terminology and semantic finesse happens. 

    Unregulated Cosmetics Terms

    Cosmeceutical: no legal meaning or accepted definition. Marketing term. Makes the beauty product sound more like a pharmaceutical, but holds no truth.

    Hypoallergenic/For Sensitive Skin: When made, usually a brand has had some type of testing performed (unfortunately the type of testing is not standardized). Allergies can happen to any person at any time and from any substance – some more than others.

    Dermatologist Tested/Approved: This means a dermatologist was somehow involved at some point. It could mean that they merely read the ingredient list. It could mean that they received samples. It might mean that they had a detailed role in product development.

    Free From:” this unregulated, umbrella term is problematic because advertising a product as “free from” _____(something), implies other products that do contain the ingredient are less safe. Marketing a sirloin steak as “gluten free” is silly. Marketing a face oil as “water-free” is meaningless. Be cautious when you see a long list of “free from” ingredients. They are designed to distract you. 

    All-Natural, Chemical Free, Toxin Free, etc. These classifications are also without much meaning or regulation. There are some industry watchdogs and certification programs that exist that do create some standardization (i.e. for organic cosmetics or for cruelty free skincare products). Some words like “toxin-free” just become umbrella phrases that marketers use to tell consumers their product is “clean” - but remember, nothing is truly non-toxic or chemical free from a science standpoint. 

    Vegan, Cruelty Free: These 2 claims are somewhat more reliably able to be made. Vegan products can be determined, for the most part, by inspecting the ingredient list (though there are some exceptions). Cruelty-free products can be a bit trickier which is why certification by organizations like Leaping Bunny is helpful. 

    What is a Cosmetic Claim?

    Cosmetics claims are made by companies in their advertising materials (packaging, web page, social media). Claims may be about the ingredients, the product, the intended results, or endorsements. Claims must be true and verifiable. Some are easy to substantiate, some are unregulated (i.e. hypoallergenic, dermatologist tested, sustainable skincare) and some require cautious wordsmithing.

    Micro influencer digital marketing via social media platforms is highly competitive. Similar to digital channels, online sales descriptions and product labels need to be accurate. Brands are responsible for the wide range of messaging linked to their products through their marketing campaigns. If influencer marketing is overselling a product, the brand can be held accountable. With all that said, there is so much volume in beauty industry marketing, regulators have nearly an impossible time keeping up.

    Cosmetic claims marketing focuses on the results and how things look. How your appearance will be enhanced or improved.

    Drug claims marketing focus on the mechanism of action and underlying physiology. 

    Cosmetic Claims Testing

    Claim substantiation for cosmetics involves some degree of additional testing. Preferably independent, unbiased, and scientifically valid (but more on that later).

    Back to the salicylic acid example. If a brand develops a cream that contains salicylic acid, a consumer might expect that it would help acne. While the assumption may be correct, the actual product could fall short of meeting expectations. What if the brand added herbal extracts that de-activate salicylic acid? What if they used comedogenic oils that results in clogged pores and increased acne?

    When it comes to substantiation, cosmetics claims marketing requires clinical testing. 

      • Hypoallergenic: the best way to claim that a product is hypoallergenic requires repeat insult patch testing over a period of multiple exposures in multiple subjects. However, any person could still have a reaction to tested products.
      • Consumer use testing: Surveys administered by an independent lab to a cohort of people using the product under usual conditions. The results are subjective (ie. 95% of women surveyed felt their skin was softer…)
      • Objective Measurements: The depth of wrinkles, color/number of pigmented lesions, number of clogged pores, bacterial studies, skin elasticity, trans epidermal water loss.
      • In Vitro Testing: the product is tested in the lab on living human cells and analyzed for something like levels of collagen.

    But here's the problem with cosmetics testing - it's not scientifically rigorous in it's design. Sample sizes are very small. Studies are paid for by the brand. They are executed by a testing company that has a vested interested in keeping the brand happy. Subjects get paid for their involvement (and presumably want to be invited back to continue being subjects).

    We aren't saying it's useless, just that when it comes to scientific publications and clinical trials, consumers need to keep watch for bias and signs of marketing dishonesty.

    Data transparency is a corporate responsibility. We caution consumers to read with a critical eye. It is important for brands to go one step further than just substantiating a claim without providing details of how they did it.

      • If a brand claims “hypoallergenic and dermatologist tested” wouldn’t you like to know if there was a patch test performed on 5 people for a 24-hour period versus repeatedly on the same 50 people over 6 weeks? The latter is a much more valid measurement for allergenic potential.
      • If a brand claims “90% of consumers report a reduction in the appearance of age spots” wouldn’t you want to know if this represented 9/10 women or 90/100 women? Or if they were 25 years old or 55?

    This process doesn’t come with a low price tag, and it can take a long time before Indie Startup Brands can get going and afford it. Some of the tests above cost over $25 000 per product to perform! This means there is also bias towards big brands and corporations. Indie brands just getting started out can rarely afford to pursue testing.

    Final Thoughts

    Consumer expectations also need to be realistic. If you want to become wrinkle free or completely eliminate dark spots you’re going to need to spend some time under a laser beam or scalpel.

    What do you think? How much do you factor in clinical testing to your purchase decisions?

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    About the Author

    Dr. Heather Smith developed her love for skinimalism and clean beauty years ago when she began making home remedies for her newborn's eczema. She is an expert in natural ingredients and active botanicals and has now launched bareLUXE Skincare - a full line of effective oil serums. She dedicates this blog to consumers who are researching ingredients and working to make their beauty ritual more natural and sustainable.


    This content is for informational and educational purposes only. It is not intended to provide medical advice or to take the place of such advice or treatment from a personal physician. All readers/viewers of this content are advised to consult their doctors or qualified health professionals regarding specific health questions. Neither Dr. Smith nor the publisher of this content takes responsibility for possible health consequences of any person or persons reading or following the information in this educational content. All viewers of this content should consult their physicians about their skincare concerns and routines.