As regulatory pressures mount across the US cosmetics and personal care industry, non-compliance costs are rising. According to the “2025 State of Regulatory Affairs and Compliance Survey Report” from RegAsk, a software company, 42% of regulatory professionals say their organizations have missed at least one regulatory requirement, leading to delayed product launches, revenue loss, and reputational damage.
Additionally, nearly a third of respondents cited the complexity of regulations as a significant risk, while 38% admitted they may be unaware of critical regulatory updates.
With the introduction of stricter US regulations under the Modernization of Cosmetics Regulation Act (MoCRA), compliance has become more challenging for manufacturers and suppliers. However, the report highlights that companies that integrate regulatory risk management into their business strategies can reduce compliance risks, streamline product development, and unlock new growth opportunities.
“The ability to manage regulatory demands more effectively than competitors is becoming a strategic advantage,” Caroline Shleifer, Founder and CEO of RegAsk, told CosmeticsDesign. We spoke to Shleifer for her insights into how US companies navigating regulatory changes can leverage technology—particularly AI-driven compliance tools—to help reduce risks and accelerate market readiness.
The cost of regulatory non-compliance
With the enactment of MoCRA, cosmetics companies in the US must now meet stricter requirements for product registration, adverse event reporting, and labeling. Failure to comply can result in significant financial consequences.
According to the report, product recalls often cost companies more than $10 million, with some cases exceeding $50 million in direct costs. RegAsk’s report also warned that delayed or canceled product launches are among the top consequences of non-compliance, along with revenue loss and reputational damage.
For US manufacturers and suppliers, the financial risks of non-compliance are clear. “Investing in AI-driven compliance tools now can help companies avoid costly penalties and protect their market position,” Shleifer stated.
AI adoption in regulatory compliance
The report emphasized that manual compliance processes are no longer sufficient to keep up with the fast pace of regulatory updates. According to RegAsk, 26% of regulatory professionals still rely on manual tools such as spreadsheets and emails to track compliance requirements, which increases the risk of errors and delays.
“Even the highest-performing organizations can’t keep pace with today’s dynamic regulatory landscape relying on manual-only processes,” the report stated. Instead, AI-driven regulatory tools are recommended to help US companies streamline compliance tasks, reduce manual oversight, and ensure real-time updates on regulatory changes.
Shleifer explained that AI can improve efficiency by automating the monitoring and interpretation of regulations, reducing the time regulatory teams spend on repetitive tasks, and enabling faster response to evolving requirements. The report noted that companies spend an average of 40% of their workweek researching regulations, translating to approximately $240,000 annually in labor costs for a small team.
Customized solutions for US regulatory challenges
The report highlighted that US cosmetics companies face unique compliance challenges, particularly when navigating regional and international regulations. For example, companies must comply with both FDA guidelines in the US and ingredient bans in other regions, such as the EU’s PFAS restrictions under the REACH Regulation.
RegAsk’s report emphasized that tailored AI solutions are more effective in response to these challenges, as “a context-driven approach to AI will have a much more significant impact than a one-size-fits-all solution.” Customized AI platforms can help US companies quickly identify regulatory changes specific to their products and markets, streamline ingredient and labeling compliance, and reduce non-compliance risk.
Shleifer further noted that data accuracy and accessibility remain key challenges for regulatory teams. According to RegAsk, only 63% of senior leaders trust their compliance data, underscoring the importance of having reliable, centralized systems for managing compliance information.
MoCRA and the growing importance of ESG compliance
In addition to MoCRA, US cosmetics and personal care product companies are increasingly impacted by environmental, social, and governance (ESG) requirements. RegAsk’s report indicated that 46% of regulatory professionals expect more ingredient bans by 2025, while 30% anticipate increased ESG compliance requirements.
Shleifer pointed out that sustainability-focused regulations can drive product innovation. For example, regulatory mandates for sustainable packaging can encourage companies to develop new solutions that meet compliance standards while appealing to eco-conscious consumers.
Companies that stay ahead of these trends are more likely to maintain a competitive advantage. “The report reveals that companies that align their innovation efforts with regulatory trends can turn compliance into a catalyst for differentiation in the marketplace,” she said.
Building confidence in AI tools
Despite the clear benefits of AI in regulatory compliance, the report noted that trust in AI-driven compliance tools is still evolving. To address this, RegAsk advised US cosmetics manufacturers and suppliers to partner with industry-specific AI providers who understand the nuances of the cosmetics sector.
“Choose solutions that deliver relevant insights exactly when and where they’re needed,” the report advised. “By aligning generative AI with your business and regulatory goals, you can improve decision-making, reduce risks, and boost productivity.”
The report also emphasized the importance of training regulatory teams to use AI tools effectively. According to RegAsk, companies should establish KPIs such as compliance accuracy, time savings, and reduced non-compliance incidents to measure the effectiveness of these tools.
The competitive advantage of AI in compliance
As regulatory demands grow more complex, early adopters of AI-driven compliance tools are gaining a competitive edge. According to the report, 39% of regulatory professionals are already using AI, with 68% planning to expand their use of AI in the near future.
“Those who act swiftly to adopt AI will gain a competitive advantage, while those who lag will struggle to keep pace as the regulatory landscape evolves,” RegAsk’s report stated.
The benefits of AI include faster product launches, reduced risk of non-compliance, and improved market readiness. In a highly competitive industry, US companies that streamline their compliance processes can focus more resources on innovation and growth opportunities rather than reacting to regulatory challenges.
Turning compliance into a growth opportunity
For US cosmetics and personal care manufacturers and suppliers, regulatory compliance is no longer just about meeting legal requirements. As RegAsk’s report emphasized, companies that manage regulatory risk more effectively than their competitors can turn compliance into a driver of growth and innovation.
“Regulatory risk is a reality, but the true challenge—and opportunity—lies in how you manage it,” the report concluded. By adopting AI-driven compliance solutions and partnering with industry-specific providers, US companies can reduce their risk exposure, protect their market position, and unlock new growth opportunities in a rapidly evolving regulatory environment.
