The High Cost of Cosmeceuticals

By Voxy  

[326/365]  Lottery Money by Lisa Brewster.If you’ve been shopping for skincare or makeup products in the last few years, you’re bound to have run across an increasing number of “cosmeceuticals” — cosmetic and skincare products that are touted to have pharmaceutical skin-improving benefits that go beyond moisturization or sun protection into the lands of antioxidants, collagen renewal, skin lightening, etc.

According to this article from cosmeticsdesign.com:

“These companies market products that are typically technologically advanced – relying on biotechnology or technologies that are also used in pharmaceutical products – and then retail these products at a premium.

Often such products are marketed at in excess of $100 for a small pot or tube, a price that the companies say is qualified by the expense of formulating such complex ingredients and technologies, and justified by exemplary results.

Meanwhile, IBISWorld says that consumers are willing to pay the higher price that these products command because they perceive the ingredients to be expensive, uniquely manufactured and intensively researched and developed.

However, the market researcher says that the consumer perception hides some less impressive data, indicating that research and development accounts for approximately 2 percent of the company’s total cost structure.

On the other hand, the cost breakdown shows that selling, general and administrative costs, which largely account for the marketing of these products, actually makes up 21 percent of the total cost structure.

Van Beek [senior analyst, IBISWorld] believes that the impressive cost margins that this cost structure entails should mean that manufacturers will be working even harder to market cosmeceutical products to US consumers, in turn fueling further growth.”

Yes, well.


Photo: http://www.flickr.com/photos/sophistechate/ / CC BY-SA 2.0

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3 Comments

  1. avatar Loonlady
    Posted November 6, 2009 at 3:36 am | Permalink | Reply

    FDA would be able to require that any healing or health-related benefits claimed in product marketing reflected the results of testing of the samples on human subjects. USDA, on the other hand, does regulate testing of cosmetic product ingredients on non-human animals, but nowadays many of the ingredients in many cosmetics have been animal-tested so frequently in the past that their inclusion in present-day cosmetics requires no further testing (i.e., they’re “safe”). Note that although a product may be advertised as “cruelty-free,” by the way, chances are its main ingredients were, in fact, tested on animals and deemed safe years before the “cruelty-free” product went on the market. But, to the subject at hand:

    I agree with Inthelab that the FDA should have some regulatory authority over cosmeceutical products, however. Any product that disrupts normal skin cell function (e.g., inhibiting melanin formation, altering cell membrane permeability) has potential to cause at least mild, temporary harm. Retina-A is such a product, as is Vaniqa, the new eyelash growth product, and other prescription-only products.

    Unfortunately, I have a feeling that any requirements for human-subject testing would make prices on cosmeceuticals go through the roof–beyond their currently outrageous prices. Cosmeceutical manufacturers might be engaged in a form of highway robbery already–everything in their formulae has been tested, repeatedly, and they have been spared the costs of running controlled, clinical trials on human subjects. Personally, I would avoid products touted as cosmeceuticals, given that common sense use of ordinary everyday sunscreens, moisturizers, and other products will have the same effects as the high-priced items marketed as cosmeceuticals.

    Just my two cents as someone who’s read way too many animal-use and human subjects protocols!

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  2. avatar Inthelab
    Posted November 1, 2009 at 8:51 am | Permalink | Reply

    What do I think? The FDA ought to have jurisdiction on that stuff.

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    • avatar Voxy
      Posted November 1, 2009 at 9:22 am | Permalink | Reply

      Can you tell me a little about that? I don’t know exactly how that works. What would the FDA be able to do? Regulate ingredient formulation? Regulate what claims products can and can’t make? Surely not price fixing — or could they? I’m interested to know.

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