Cosmetics and Health Food Advertising Under the PMD Act: Efficacy Claims, Testimonials, and Administrative Surcharges

Hello, I'm Noriaki Asato, Representative Attorney at LegalAgent.

Writing "erases dark spots" in an advertisement for a cosmetic and writing "covers dark spots with a makeup effect" for a foundation convey different effects. The former indicates a change in the skin itself, while the latter is a change in appearance produced by makeup. You cannot judge whether an advertisement is appropriate simply by picking out the words used.

Companies selling cosmetics or health foods first need to confirm which legal category the product falls into and how far its efficacy can be claimed. They then check whether the advertisement as a whole, combining text, photographs, and users' comments, conveys effects or certainty beyond that scope. The question of whether a product is a pharmaceutical under the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the PMD Act) and the question of whether an advertisement for a cosmetic is false or exaggerated need to be considered separately.

Product Categories and the Scope of Articles 66 and 68

Article 2, Paragraph 3 of the PMD Act (Japanese) defines cosmetics as products with a mild effect on the human body, used to cleanse, beautify, or enhance the attractiveness of the body, alter the appearance, or keep the skin or hair healthy. Ordinary cosmetics are not sold after receiving product-by-product approval of their efficacy as pharmaceuticals are. "Having filed a notification of sale" and "having the efficacy you wish to advertise recognized" are two different things.

Article 66 directly regulates advertising. Paragraph 1 of that Article prohibits any person from making false or exaggerated advertisements concerning the name, efficacy, effects, and other aspects of pharmaceuticals, quasi-drugs, cosmetics, and other products. The prohibition covers not only explicit expressions but also implied expressions. Paragraph 2 provides that advertisements likely to cause the misunderstanding that a physician or other person has guaranteed the efficacy are also deemed to fall under Paragraph 1.

In contrast, Article 68 prohibits advertising the name, efficacy, and other aspects of pharmaceuticals, medical devices, and regenerative medicine products covered by that Article before the required approval or certification is obtained. It is not accurate to say that whenever a cosmetic's efficacy claim exceeds the permitted scope, it immediately constitutes a violation of Article 68 in every case. While examining whether the advertisement violates Article 66 and other provisions as an advertisement for a cosmetic, an Article 68 issue also arises where the product itself qualifies as a pharmaceutical based on the stated purpose of use or similar factors.

For foods, the Ministry of Health, Labour and Welfare's "Standards on the Scope of Pharmaceuticals" (Japanese) provide guidance for the judgment. Under this framework, whether a product taken orally has the purpose of a pharmaceutical is determined by comprehensively considering its ingredients, form, stated efficacy and directions for use, and explanations given at the time of sale. A seller's own view that "we are selling it as a food" does not by itself take the product outside the scope of the PMD Act.

Articles 66 and 68 both apply to "any person." Even if advertising is outsourced to a production company, the advertiser still needs to check the content. Because the regulations may also extend to production companies and others involved in the advertising, allocating responsibility under a service agreement and responding to administrative regulation are matters to be considered separately.

The 56 Efficacy Claims for Cosmetics and How Makeup Effects Differ

The basis of the efficacy claims a cosmetic may make is the 56 items set out in the Ministry of Health, Labour and Welfare's notice "On the Revision of the Scope of Efficacy of Cosmetics" (Japanese). The notice of July 21, 2011 added "makes fine wrinkles caused by dryness less noticeable." The list includes items such as "conditions the skin," "moisturizes the skin," and "makes the hair supple."

Being on the list of 56 items does not mean every claim can be made for every product. The premise is that claims are made within the scope of efficacy applicable to that product. For "makes fine wrinkles caused by dryness less noticeable," attention must also be paid to the condition that the effect be confirmed through testing based on the guidelines of the Japanese Society of Cosmetic Science or similar. Also distinguish between an effect being described in an ingredient supplier's materials and that effect having been confirmed for the product you are selling.

On the other hand, what can be written in an advertisement is not limited to the wording of the 56 items. The notice on the efficacy of cosmetics (Japanese) also permits statements of makeup effects and usage feel that are not contrary to fact. Explaining that makeup makes the skin look brighter and explaining an efficacy that changes the skin itself require different supporting evidence.

Applying this distinction to the expressions at the beginning, it is likely necessary to avoid advertisements claiming that an ordinary cosmetic removes the dark spots on the skin themselves. For foundations and similar products, there is room to convey factually that the product "covers dark spots with a makeup effect," but if photographs or headlines create the impression of a therapeutic effect, a small disclaimer alone cannot dispel that impression.

Quasi-drugs labeled as "medicated" are not treated the same as ordinary cosmetics. For products approved as quasi-drugs, efficacy is explained in line with the content of the approval. Even if a product has a skin-lightening efficacy, it has not necessarily been approved for the effect of removing existing dark spots. When reviewing advertisements, you need to identify from the product register whether the product is an ordinary cosmetic or a quasi-drug and, if the latter, place the approved efficacy wording next to the draft and cross-check them.

Function Claims for Health Foods and Expressions of Treatment or Prevention

For health foods, there is a system of foods with health claims (Japanese) under which functions can be indicated under certain conditions. The three types, Foods for Specified Health Uses, Foods with Function Claims, and Foods with Nutrient Function Claims, each differ in procedure and in what may be claimed.

Foods for Specified Health Uses is a system under which each product undergoes review of its efficacy, safety, and other aspects, and indicates the health use that has been permitted. Foods with Function Claims (Japanese) is a system under which the business operator, on its own responsibility, notifies the Commissioner of the Consumer Affairs Agency of the scientific basis for safety and functionality; it is not a system under which the government reviews and recognizes the effect of each individual product. Foods with Nutrient Function Claims is a mechanism for indicating prescribed nutrient functions when the product meets standards such as specified amounts of nutrients.

None of these systems allows the free advertising of treatment or prevention of disease. You cannot make appeals such as "drinking this will cure your illness" or "anyone will definitely lose weight" beyond the scope of the notification or permission, the intake conditions, and the indicated function. Even when moving the notified claim for a Food with Function Claims onto a short banner, check whether omitting the target population or conditions causes the scope of the effect to be conveyed more broadly.

For foods that are not foods with health claims, it is also not appropriate to lump everything together as "all health-related words are prohibited." However, in addition to not claiming pharmaceutical efficacy, function claims on containers and packaging are restricted by the Food Labeling Standards, and the Premiums and Representations Act and the Health Promotion Act apply to advertising.

Article 65, Paragraph 1 of the Health Promotion Act (Japanese) prohibits representations concerning the health maintenance and promotion effects of products sold as food that are markedly contrary to fact or markedly misleading. Even if it can be determined that the product is not a pharmaceutical under the PMD Act, the work of confirming support for the effect remains. In my view, checking the product category, the labeling on containers and packaging, and how the advertisement as a whole will be perceived, in that order, is useful for preventing mistaken rephrasing.

Reviewing the Advertisement as a Whole, Including Testimonials, Photographs, and Disclaimers

The Ministry of Health, Labour and Welfare's guidance on advertising regulation (Japanese) sets out Articles 66 and 68 together with the Standards for Fair Advertising Practices Concerning Pharmaceuticals, etc., as revised on September 29, 2017. When reviewing a draft, consider not only the scope of efficacy but also whether the presentation guarantees an effect.

A customer comment such as "my dark spots disappeared," selected and posted by the company, forms part of the advertisement even if it takes the form of a quotation. Adding a note such as "individual experience" is unlikely to avoid that assessment where the advertisement as a whole is appealing to the product's effect. It is necessary to distinguish between comments on usage feel and testimonials that guarantee efficacy or safety.

Before-and-after photographs are also reviewed together with the text. The issue is whether changes resulting from differences in lighting, camera angle, the presence or absence of makeup, or image retouching are presented as changes in the skin caused by the product. Rather than treating photo comparisons as uniformly prohibited, check what effect the photo shows and under what conditions. If you are showing a coverage effect from makeup, the presentation must convey those conditions to viewers.

At the early stage of ad production, preparing the following materials for each product makes it easier to explain the reasons for the review to the production staff.

• Materials confirming the product category, the content of the approval, or the notified claim
• Test results and supporting materials corresponding to each efficacy claim in the draft
• The shooting conditions for the photographs used, and the images before and after editing
• The original text of testimonials to be posted, and the approval record for the final draft

When engaging influencers or production companies, do not merely hand over the approved expressions; set out in the agreement or order terms a pre-publication review of drafts and videos, a prohibition on unauthorized changes, and cooperation in removal or replacement if a problem is discovered. For videos, the review needs to cover the completed version, including not just the captions but also what is said, the images, and the surrounding staging.

Calculating the 4.5% Surcharge and Responding After Stopping an Advertisement

The administrative surcharge system under the PMD Act, introduced on August 1, 2021, applies to violations of Article 66, Paragraph 1. Article 75-5-2 provides that the surcharge is based on the total consideration for the covered products traded during the surcharge period multiplied by 4.5%, and that payment cannot be ordered if the calculated amount is less than JPY 2.25 million. A violation of Article 68 alone does not automatically result in this surcharge.

The covered period does not necessarily end with the period during which the advertisement was posted. If the covered products continue to be traded after the violation stops, the subsequent period is added under statutory conditions, and if the total exceeds three years, the period is the three years counting back from the last day. You should avoid assuming that stopping the advertisement necessarily stops the surcharge calculation as of that day.

When a problem is discovered, stop the advertisement and secure records of the media where it was posted, the content of the representations, the posting period, and the transaction records for the covered products. Replacing the advertisement, measures to dispel misunderstanding, and reductions through voluntary reporting are each considered in light of their respective statutory requirements. Even if the surcharge falls below the minimum threshold, that does not mean it is acceptable to continue running a violating advertisement.