The term “cosmeceutical” has been used for over 20 years, but it’s recently become the buzzword in the skincare industry and is cropping up everywhere. Mass and luxury brands are successfully positioning products to be cosmeceuticals and some companies even incorporate the word into a brand’s name. The word cosmeceutical was coined by Albert M. Kligman, a professor at the University of Pennsylvania Medical School, in the late 1970s. Today, cosmeceutical is often used interchangeably with the terms “clinical” or “professional.” However, the word can be misleading and is often used loosely. So what are cosmeceuticals?

Within cosmetic chemistry, there are essentially two umbrella categories of ingredients: functional and performance. Functional ingredients make up the majority of a product’s formulation and give the product a specific form, such as gel, lotion, or cream, and include emollients, carbomers, preservatives, etc. In contrast, performance ingredients cause changes in the appearance of skin. Examples include humectants, which attract water to skin, or fruit enzymes, which exfoliate. It should be noted that performance ingredients in cosmetic products are technically not supposed to be “active ingredients,” which is a term used in the drug industry. However, a third category, known in the industry as cosmeceuticals, blurs the line between cosmetics and drugs. Moreover, the active ingredients in cosmeceutical products are often medical grade more often than not.

The actual meaning of cosmeceuticals depends on whom you ask. Cosmeceutical is a conflation of the words “cosmetic” and “pharmaceutical.” Some deem cosmeceutical products to simply contain stronger or higher concentrations of performance ingredients. Others view cosmeceuticals as containing biologically active ingredients purporting to have drug-like benefits. Then there are those who consider products as cosmeceuticals based on the distribution channel. Brands sold solely through doctor’s offices and/or medi-spas (and frequently contain the letters MD in the name) are often distinguished as clinical products. Regardless of the definition, there’s no denying that the cosmeceutical market is largely unregulated.

The term cosmeceutical has no meaning under U.S. law and cosmeceuticals are not acknowledged by the FDA, which follows the definitions of cosmetics and drugs per The Cosmetic Act of 1938. Generally, cosmetics alter the appearance of the body. Drugs affect the structure and/or function of the body, and cause physiological changes. This distinction is significant as it affects how products are regulated. Cosmetics do not require pre-approval by the FDA, which only regulates safety, labeling, and claims made by cosmetics companies. In contrast, drugs must be proven safe and effective before they are manufactured and sold. Consequently, any product containing retinol should technically be approved by the FDA before it hits the merchandise shelves; however, that is clearly not the case. Only recently, the Director of the Food and Drug Administration’s Center for Food Safety and Applied Nutrition testified to a congressional subcommittee that claims of active ingredients in cosmetics products may classify them as drugs.

The FDA has become more aware of misleading product claims and issued a record number of warning letters in 2011. However, the FDA is far behind the EU, which has the strictest regulations regarding cosmetic formulations. Further, cosmetics companies have responded to the FDA crackdown with new marketing tactics, playing the claim game. Wrinkle creams, which initially claimed to “reduce wrinkles,” now claim to “reduce the appearance of wrinkles.” While the claims may have changed, the product formulations have not and continue to evolve employing bio-active ingredients.

FDA warning letters aside, according to Inside Cosmeceuticals, consumer litigation within the cosmetics industry is on the rise. As there is no certification process for the potency or quality of cosmeceutical ingredients. Any cosmetics company can slap the term cosmeceutical onto packaging. When I was a student in esthetics school, one of my theory teachers warned, “There are products in drugstores that will burn a hole in your face if you’re not careful.” Thanks to websites such as TIA, consumers are more ingredient savvy about personal-care products than they have ever been. Consumer lawsuits span the cosmetics spectrum from exaggerated technical product claims to products claiming to be all natural or cruelty free.

The cosmeceutical segment, once a niche market, has become one of the fastest-growing product categories globally. New applications for ingredients, including stem cells and peptides, have revolutionized anti-aging skincare, fueling the growth of cosmeceuticals. A recent research report anticipates the global cosmeceuticals market to reach $38.4 billion during 2012-2014. Cosmetics companies are heavily investing in research and development, and the science backing some cosmeceutical products is very real. While some product claims are genuine exaggerations, it must be recognized that cosmeceuticals are not all marketing hype. The CEO of VMV Hypoallergenics, told GCI Magazine, “In active treatments like cosmeceuticals, safety has still been underestimated, but it is fundamental.” It’s clear that beauty has indeed met science and that regulatory bodies must keep up with the skincare evolution in order to ensure consumer safety.