On December 11, 2018, the U.S. Environmental Protection Agency (the EPA) finalized new standards for the management of hazardous waste pharmaceuticals by healthcare facilities (including retail pharmacies and wholesale distributors) and reverse distributors, Management Standards for Hazardous Waste Pharmaceuticals and Amendment to the P076 Listing for Nicotine (the “Waste Pharmaceuticals Rule”). The Waste Pharmaceuticals Rule, which has not yet been published in the Federal Register, creates new sector-specific standards (to be codified at 40 C.F.R. Part 266, Subpart P) under the Resource Conservation and Recovery Act (RCRA) for healthcare facilities and reverse distributors. Waste pharmaceuticals currently are regulated under the general RCRA hazardous waste generator regulations in 40 C.F.R. Part 262. The Waste Pharmaceuticals Rule also provides that over-the-counter nicotine replacement therapies (such as nicotine patches, gums and lozenges) approved by the U.S. Food and Drug Administration are not hazardous waste when discarded.

In 2015, the EPA proposed the new Subpart P regulations for hazardous waste pharmaceuticals for healthcare facilities and reverse distributors. 80 Fed. Reg. 58,014 (Sept. 25, 2018). The 2015 proposal prohibited healthcare facilities and reverse distributors from disposing of hazardous waste pharmaceuticals down the toilet or drain (“sewering”). The proposal also established new reverse distribution requirements for creditable (i.e., expected to receive manufacturer’s credit) and non-creditable hazardous waste pharmaceuticals. The EPA proposed to continue to allow creditable hazardous waste pharmaceuticals to be shipped to reverse distributors, but proposed regulating non-creditable hazardous waste pharmaceuticals as hazardous waste. The EPA also proposed a conditional exemption for hazardous waste pharmaceuticals that are also identified as controlled substances by the Drug Enforcement Administration (the DEA).

The final Waste Pharmaceuticals Rule retains the basic structure of the 2015 proposal with certain notable exceptions. As proposed, the final rule prohibits sewering hazardous waste pharmaceuticals, and includes a conditional exception for DEA-controlled substances. The final rule also does not add pharmaceuticals to the hazardous waste listings or expand the hazardous waste characteristics to include additional pharmaceuticals. Although the 2015 proposal solicited comments on expanding the universe of pharmaceuticals that are hazardous waste, the EPA specified that any such action would be part of a separate rule making. The EPA continues to note that the household hazardous waste pharmaceuticals — like other household hazardous waste — are not subject to federal RCRA hazardous waste regulations.

However, the final rule replaces the distinction between creditable and non-creditable hazardous waste pharmaceuticals, with one based on whether the underlying pharmaceutical is prescription or non-prescription. Under the final rule, prescription pharmaceuticals sent from healthcare facilities to reverse distributors are regulated as solid waste at the healthcare facility. In contrast, nonprescription pharmaceuticals that are sent through reverse logistics are not solid waste at the healthcare facility if there is a reasonable expectation the pharmaceuticals will be legitimately used/reused i.e., (lawfully redistributed for their intended purpose) or reclaimed. The EPA also is establishing a policy that other retail items that are sent through reverse logistics are not solid waste at the retail store if there is a reasonable expectation the items will be legitimately used/reused or reclaimed. The EPA explains that the disparate treatment for prescription pharmaceuticals is justified because, except in very limited circumstances, there is not a reasonable expectation that prescription pharmaceuticals will be legitimately used/reused or reclaimed, unlike nonprescription pharmaceuticals and other retail items for which such expectation often exists. Importantly, hazardous waste pharmaceuticals sent to reverse distributors will be subject to the sector-specific requirements in Part 226, Subpart P, rather than the general hazardous waste requirements in Part 262.

While welcoming relief from hazardous waste rules for most non-prescription pharmaceuticals handled in a reverse logistics system, the retail sector opposes the classification of prescription pharmaceuticals sent to reverse distributors as solid (and, potentially, hazardous) waste. The retail industry also is pushing the EPA for a broader exception for low-concentration nicotine products including prescription nicotine therapies, e-cigarettes and e-liquids.

Industry sources report that they are continuing to evaluate the Waste Pharmaceutical Rule, and have not reached any decision as to potential challenges.