FDA's Burning Regulations

A decade after Congress ordered the Food and Drug Administration to come up with regulations for sunscreen products, at last, the FDA has proposed the rules.

We'll still have the SPF ratings that were established in 1999, which let customers know the amount of protection from sunburn-causing ultraviolet B (UVB) rays. The SPF rating will now be capped at 50-plus, unless companies can prove there's a clinical benefit for a product offering more than SPF 50.

The new regulations mostly revolve around claims that manufacturers can make about ultraviolet A (UVA) rays. That wavelength causes long-term damage, including wrinkles, and has also been linked to skin cancer.

Many sunscreens already have claims on their bottles that they protect against UVA rays, but the new regulations include a one- to four-star system to designate the degree of protection. Now that companies know which tests will be used to determine the degree of UVA protection, manufacturers can reformulate their products to fit the appropriate star ranking for their price point.

The new regulations also require companies to put a warning on their bottles that spending time in the sun causes skin cancer. That's kind of like the FDA requiring GlaxoSmithKline (NYSE:GSK) to put a warning label on its nicotine patch about how smoking is bad for you. I'm not sure sunscreen users are the ones who need the warning, but I guess the FDA figured it would be a little hard to post a warning on the actual sun.

These new regulations could shake up the way market share is divided now. Maybe I'm not the typical consumer, but I'm not particularly brand-conscious about the sunscreen I buy. I usually make a decision based on price amongst the products that have the SPF I'd like to have. The degree of UVA protection will give consumers another factor to determine which product to put in the cart.

Schering-Plough (NYSE:SGP) led the U.S. market last year with its Coppertone line. Playtex Products (NYSE:PYX) and Johnson & Johnson (NYSE:JNJ) round out the top three from last year. But Playtex recently bought fourth-place Tanning Research Laboratories, so it may be able to become the new market leader this year.

The companies will have some time to do their market research and change their labels; the new requirements will begin in 2009 at the earliest. Until then, investors should listen to the earnings conference calls to keep track of how their companies are adapting.

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Fool contributor Brian Orelli, Ph.D., is so bright, his father calls him sun. He doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.