A new rule proposed by the EPA to take effect in July 2018 would redefine pharmaceutical waste under the Resource Conservation and Recovery Act (RCRA), fundamentally altering how the pharmaceutical supply chain currently operates by requiring health care facilities to comply with new waste-reporting rules.

The proposed rule mandates that pharmaceuticals would be considered “discarded” under RCRA whenever health care facilities send the pharmaceuticals to a reverse distributor. Reverse distribution refers to the practice through which health care facilities currently manage unused or expired pharmaceuticals. It is common for health care facilities to send these pharmaceuticals to a reverse distributor, which then determines whether there is a secondary market for the product. If the pharmaceutical can be resold or reused, the reverse distributor will in turn credit the health care facility based on the resale value of the product. If, on the other hand, the product cannot be resold, then the reverse distributor will dispose of the product according to appropriate environmental practices.

Currently, under the Drug Supply Chain Security Act, pharmaceuticals are not considered waste until after a reverse distributor has determined whether the product can be processed as a return or whether it must be discarded. The new rule would define pharmaceuticals as waste before a reverse distributor makes its waste determination.

The new rule would therefore subject a health care facility to the hazardous waste reporting requirements of RCRA whenever it sends unused pharmaceuticals away from its facility — even if those pharmaceuticals may ultimately be reused. As a result, health care facilities will no longer be able to rely on the expertise of reverse distributors in determining appropriate and environmentally safe disposal practices for pharmaceutical products.

The controversial rule has been debated since EPA initially proposed it in August 2015. EPA extended the public comment period and ultimately received more than 300 public comments on the proposed rule. Last fall, EPA stated that it plans to issue the new rule in July 2018.

Health care companies and facilities that currently rely on reverse distributors will need to reevaluate their waste-disposal practices to comply with the new regulation. Pepper Hamilton’s Environment and Energy Practice Group has significant experience counseling clients on solid waste-disposal regulations. Please contact us for assistance navigating this new regulation.