Cosmeceuticals

Functional cosmetics are, under the ‘Cosmetics Act,’ products that have undergone review by the Ministry of Food and Drug Safety because specific functions, such as skin whitening, wrinkle improvement, UV protection, acne relief, relief of hair-loss symptoms, strengthening of the skin barrier, and increased hair thickness, are enhanced so that they deliver improved effects compared with ordinary cosmetics.

By contrast, cosmeceuticals have no separate legal definition, but they are a term that refers to a product category emphasizing advanced efficacy based on scientific evidence (such as clinical data, research papers, and patented technology) and the involvement of medical specialists.

In general, many such products combine the technology of pharmaceutical and bio companies, so they are recognized as a high-function, premium category.

In particular, a common model is joint development with cosmetics companies that draws on the pharmaceutical technology, clinical platforms, and GMP-based manufacturing capabilities held by pharmaceutical and bio companies, and this convergence structure forms the distinctive character of cosmeceuticals.

As aging populations and the wellness trend spread, global consumers increasingly prefer products centered on health, safety, and efficacy.

In the United States in particular, older adults account for roughly 30% of total consumption, and demand for skincare products based on biotechnology and regenerative medicine is expanding rapidly.

In line with these market changes, pharmaceutical companies are actively expanding into the functional cosmetics field by using their pharmaceutical technology and bio platforms, and competition to gain an early lead in cosmeceuticals is becoming even more intense in the global market.

However, unlike the rapidly growing market, official standards or a definition for cosmeceuticals are still absent, which creates a risk not only of reduced product reliability but also of consumer harm.

Scientific evidence-based market analysis and a clinical-trial support system, including the development of ingredient data, clinical cases, and safety and efficacy materials, are emerging as key factors for strengthening trust across the industry.

Because cosmeceuticals are by nature a market that emphasizes “efficacy,” the most frequent disputes involve labeling and advertising.

In particular, the expressions below are phrases that the Ministry of Food and Drug Safety repeatedly takes issue with.

Types of Labeling and Advertising Violations and Advertising Phrases or Types

Such expressions can be sanctioned immediately as likely to be mistaken for a pharmaceutical or claiming similar medical efficacy.

In particular, cosmeceuticals, which frequently rely on social media, influencers, and clinical reviews, carry significant structural risk because advertisers, agencies, and influencers can all be subject to punishment.

For cosmeceutical products, misclassification can expose a company to significant licensing delays and recall risks.

Three Factors in Determining a Product's Boundary

If any one of these falls within the category of drug efficacy or effect, or directly asserts a ‘physiological action on the body,’ the product may be subject to sanctions for risk of being mistaken for a drug.

Many cosmeceutical products rely on novel ingredients, bio-based ingredients, and patented technologies.

However, using ingredients that do not meet domestic standards can give rise to the following risks.

Summary of Ingredient-Related Risks

Cosmeceuticals often involve content marketing designed to make consumers feel “as if there is an effect,” which can lead to criminal cases for violations of the Act on Fair Labeling and Advertising, the Food Sanitation Act, and the Cosmetics Act.

In particular, user reviews, clinical graphs, interviews with medical specialists, and the use of medical terminology are the areas most closely monitored by the Fair Trade Commission and the Ministry of Food and Drug Safety.

When a cosmeceutical company imports overseas ingredients or products, the Special Act on Imported Food Safety Control, customs clearance requirements, and country-of-origin labeling can become problematic.

Representative Risks

Cosmeceuticals are a consumer goods industry at the center of the ESG trend.

In the course of promoting stronger ESG practices, such as eco-friendly packaging, vegan certification, and bans on animal testing, the following risks may arise.

In the cosmeceutical market, where many products fall along category boundaries, “regulatory review at the early planning stage” is the most cost-effective risk management strategy.

This is because a single phrase about efficacy, a single novel ingredient, or the way the intended purpose is described can change the product category, which in turn can change the licensing requirements, advertising restrictions, and scope of due diligence.

A prior regulatory positioning analysis that brings together the product's target efficacy, ingredient composition, development method, and branding strategy is therefore necessary.

Daeryun Law Firm provides specialized advisory services that carefully review regulatory positioning from the earliest stages of cosmeceutical development.

How Daeryun Can Assist

Because cosmeceuticals form an efficacy-driven market, even a single line of advertising copy, a single graph, or a single sentence in a review can result in sanctions for being mistaken for a drug, exaggerating effects, or relying on inadequate clinical evidence.

In particular, given the SNS and influencer-driven nature of the market, not only advertisers but also agencies and creators can become subject to punishment, which creates substantial structural risk.

For this reason, building a company-wide system of advance review and compliance guidelines from the advertising planning stage is a core response strategy.

Daeryun Law Firm provides specialized advertising compliance advisory services to help cosmeceutical companies secure legality and safety in their advertising and content production processes.

How Daeryun Can Assist

Cosmeceuticals form a market that emphasizes "scientific evidence" grounded in clinical studies, test data, research papers, and patents. In practice, however, cases of regulatory sanction arising from the way supporting evidence is organized and described, as well as gaps in clinical study design, continue to increase.

The Ministry of Food and Drug Safety is strengthening its review of the reliability and legal compliance of functional data, and inadequate evidence can lead not only to advertising and labeling sanctions but also to recalls and suspension of sales.

For this reason, a system that checks, from the development stage, whether functional requirements are met and whether supporting evidence is internally consistent is needed.

Daeryun Law Firm provides a specialized solution that reviews the full range of supporting evidence, including clinical studies, test data, research papers, and patents, in an integrated manner aligned with Ministry of Food and Drug Safety standards.

How Daeryun Can Assist

Cosmeceutical companies that import overseas raw materials and products must simultaneously satisfy complex regulations, including the Imported Food Safety Control Act, customs clearance rules, labeling requirements, and storage and distribution standards.

On-site inspections by the Ministry of Food and Drug Safety and public health centers are also being strengthened, so failure to meet standards can result in high-intensity sanctions such as suspension of customs clearance, suspension of business, and recalls.

For this reason, companies should systematically establish, starting from the stage before product introduction, the verification of raw material suitability, the review of customs clearance requirements, and the development of SOPs for the distribution stage.

Daeryun Law Firm provides a dedicated service that addresses distribution-related regulatory risk across the full life cycle, from reviewing the safety of imported food and raw materials to responding to inspections.

How Daeryun Can Assist

Eco-friendliness, veganism, and sustainability have established themselves as core values of cosmeceutical brands. In practice, however,

there are many cases in which the gap between a company's ESG activities and its marketing leads to "greenwashing" (false or exaggerated environmental claims).

In the supply-chain structure linking distributors, manufacturers, and raw material suppliers, the risk of violations of the Monopoly Regulation and Fair Trade Act is also increasing, so ESG and fair trade must now be approached as a single integrated compliance matter.

For this reason, establishing a company-wide compliance system, including verification of ESG evidence, review of supply-chain risk, and the development of disclosure standards, is needed.

Daeryun Law Firm provides advisory services for a company's sustainable management, ranging from review of ESG and fair-trade-related labeling and response to investigations, to the development of supply-chain management systems.

How Daeryun Can Assist

Daeryun Law Firm includes attorneys with a broad understanding of the pharmaceutical, bio, and healthcare regulatory environment.

Amid the convergent nature of the cosmeceutical market and a rapidly changing regulatory environment, to secure both product innovation and the stability of the company's business, we encourage you to seek the legal assistance of a 🔗medical attorney.