Regulators Review Reverse Distribution Process to Prevent Diversion, Environmental Hazards

December 19, 2011 12:58 pm Topics: Controlled substances

Originally published in the January 2012 NABP Newsletter.

Regulators have renewed focus on the reverse distribution process in the context of a national prescription drug abuse epidemic, which creates a market for diverted drugs, and national concerns for the safety of drinking water and other environmental issues related to pharmaceutical disposal. For over a decade, reverse distributors have provided a service to pharmacies by processing unused drug inventory – either for return to the manufacturer for credit, or for safe disposal – while also helping to protect public health by maintaining compliance with federal and state laws and regulations. The federal regulatory bodies that oversee the reverse distribution process are the same regulatory bodies that govern pharmaceutical waste management: Drug Enforcement Administration (DEA), the Environmental Protection Agency (EPA), Department of Transportation, and Occupational Safety and Health Administration.

While federal laws requiring registration of reverse distributors have helped to secure the drugs they process, as with the distribution supply chain, the reverse distribution process can be vulnerable to diversion. In addition, not all entities needing to process or dispose of unused controlled substance (CS) pharmaceuticals are able to do so. For example, long-term care facilities (LTCFs) cannot use reverse distributors for CS disposal under the current DEA regulations. Further, EPA stresses that numerous pharmaceutical compounds have been detected “at discernable concentrations in our nation’s rivers, lakes, streams, and drinking water,” raising the question of how hazardous pharmaceutical waste should be regulated for safe disposal and EPA mandates.

Even as notice of new federal regulations is imminent from EPA and anticipated from DEA within 2012, state regulators, including boards of pharmacy, may want to consider the following:

• What requirements are needed to ensure that drug products travel securely through the reverse distribution process?
• How is reverse distribution regulated in various states? Which states require licensure for reverse distributors? Do any states recognize Verified-Accredited Wholesale Distributors^® (VAWD^®) for reverse distributors?
• What are the environmental concerns, or other state-specific concerns, regarding drugs returned for destruction, including those deemed to be hazardous waste?

Mitigating Diversion

Generally, the process of reverse distribution begins with a retail or hospital pharmacy sending unused drug inventory, including overstocked and expired prescription medications, to the reverse distributor. The reverse distributor processes the items and either sends them to the manufacturer for credit, or disposes of the products in compliance with all federal and local regulations. The pharmacy receives reports from the reverse distributor documenting the items returned to manufacturer, or proof of destruction, as applicable.

In May 2005, DEA published the final rule to regulate this process: “Definition and Registration of Reverse Distributors.” The rule established reverse distributors as a new category of registration and regulates the “standards under which reverse distributors may handle unwanted, unusable, or outdated controlled substances acquired from another DEA registrant. These standards ensure the proper documentation and recordkeeping necessary to prevent diversion of such controlled substances to illegal purposes.” As stated in the DEA final rule, requirements for a reverse distributor include, but are not necessarily limited to:

• meeting federal standards for physical security controls;
• completing and maintaining records that include periodic inventories and records of all CS received, destroyed, or returned to the original, registered manufacturers for two years. Further, receipt and accountability methods and records used to ensure the establishment of effective controls against diversion must be described;
• meeting requirements for completing order forms for all Schedule I and II items prior to their transfer to the reverse distributor. Only after the order form has been received by the reverse distributor may the controlled substances be transferred;
• submitting reports as required under the Automation of Reports and Consolidated Orders System.

In addition to DEA requirements, reverse distribution applicants must obtain the appropriate state and federal approvals for CS and disposal activities.

State Laws

As reported in the 2012 NABP Survey of Pharmacy Law, at least 34 states have laws or regulations pertaining to the disposal of medications, including some laws specific to reverse distributors.

In the Survey, Vermont reported that entities must use approved reverse distributors, and Virginia indicated that the pharmacist-in-charge may dispose of unwanted drugs by “one of the following procedures: (1) Transfer the drugs to another person or entity authorized to possess or provide for proper disposal of such drugs; or (2) Destroy the drugs by burning in an incinerator in compliance with all applicable local, state, and federal laws and regulations. If Schedule II through Schedule V drugs are to be destroyed, additional procedures apply.”

Some states require that reverse distributors become licensed by the board of pharmacy, as either a manufacturer, wholesale distributor, or drug outlet. In Idaho, for example, reverse distributors are required to obtain registration through the Idaho State Board of Pharmacy as drug outlets, including obtaining CS registration, if receiving CS.

As a means to help protect the public from the threat of counterfeit drugs infiltrating the United States medication supply, the NABP VAWD program verifies suppliers’ compliance with state and federal laws for wholesale distributors. Some reverse distributors may seek VAWD accreditation to comply with state regulations that require VAWD for state licensure. Such state laws can help to ensure the security of the reverse distribution process. According to the 2012 NABP Survey, 20 states now recognize the VAWD program.

Disposal of Surplus CS Drugs by LTCFs

In testimony presented to the US Senate Special Committee on Aging, June 30, 2010, Mary L. Hendrickson, PharmD, MBA, RAC, director of quality & regulatory affairs, Capital Returns, Inc, stated that she has witnessed the “surplus of unused medications in long-term care facilities as well as witnessed the destruction method utilized by these facilities.” She indicated that “many facilities have limited resources to destroy products like controlled substances” and that they are “frequently not familiar with the best standards of practice or environmental regulations for discarding pharmaceuticals. As a result many of these products are destroyed by flushing them down the drain or toilet.”

The DEA reports that one comment received in response to the interim final rule for reverse distributors highlighted the need for regulations that allow LTCFs to return or dispose of unused controlled substances using the services of a reverse distributor. “The commenter stated that its studies have shown that a majority of long term care facilities and nursing homes are improperly accounting for and disposing of their controlled substances, indicating that sewage is a primary means of disposal and that EPA has concluded that improper disposal results in contamination.”

In the public comments section of the final rule on reverse distributors, DEA reiterated that because “LTCFs are not registrants they may not transfer controlled substances to either the pharmacy from which they came or to a reverse distributor, or any other registrant for disposal.” Instead, DEA regulations require that LTCFs “dispose of the excess controlled substances directly.” DEA’s position is intended to maintain the security of the closed system of distribution, and DEA advises that, “In cases where long term care facilities must dispose of controlled substances, they should follow the guidelines within their State for disposing of the drugs and maintain appropriate documentation of the disposal.”

The Report of the NABP Task Force to Review and Recommend Revisions to the Controlled Substances Act, states that DEA has indicated that a separate rule is pending relating to LTCFs and the developing regulations to implement the Secure and Responsible Drug Disposal Act of 2010. The Task Force, which met January 25-26, 2011, recommended that NABP comment appropriately when the Notice of Rulemaking is published.

Addressing Environmental Concerns

Because the reverse distribution process generates waste, it is also regulated by the EPA. In addition, some states regulate hazardous pharmaceutical waste with stricter requirements overseen by their state environmental protection agencies. For example, the Minnesota Pollution Control Agency (MPCA) studied the issue and determined that the majority of the drugs sent to reverse distributors in its state are destroyed or disposed of, not reused, making them subject to the Minnesota Hazardous Waste Rules. The MPCA concluded that “the established reverse distribution system provides an environmentally protective method for handling waste pharmaceuticals” and allows pharmacies to manage unused drugs through this process as long as they are in compliance with additional requirements implemented by MPCA. Specifically, the pharmacy or entity using a reverse distributor service for disposal management must:

• obtain a Hazardous Waste Identification Number;
• ensure that the reverse distributor is licensed by the Minnesota Board of Pharmacy as a pharmaceutical manufacturer or wholesaler, and has a DEA registration number if CS will be handled; and
• meet specified requirements for shipping, documentation, and record keeping.

The regulation also specifies, consistent with DEA rules, that the entity may not accept or ship for reverse distribution any wastes that were accepted from households or another waste generator.

The Wisconsin Department of Natural Resources (WDNR) takes a different approach, and places the responsibility for proper destruction of hazardous waste with the reverse distributor. WDNR interprets that because the unused pharmaceutical product is considered to have value, it is not regulated as a waste, and WDNR cautions pharmacies that “Only pharmaceuticals that are eligible for credit should be sent to the reverse distributor. Reverse distributors are not waste management facilities and are not allowed to accept waste or waste-like materials, such as partial packages, compounded IVs, broken or spilled materials, patient’s personal medications or samples from pharmaceutical representatives.” 

Instead, WDNR indicates that “Products that are never eligible for credits must be properly managed as a waste, and not sent to a reverse distributor.” Further, the WDNR states that “Reverse distributors must properly manage any hazardous waste that is generated as part of their business activities” and must follow Wisconsin hazardous waste rule requirements.

Similarly, the Virginia Department of Environmental Quality (DEQ) indicates that there is no Virginia-specific guidance on reverse distribution of pharmaceuticals, but that the process should not be used instead of proper hazardous waste management. The Virginia DEQ advises that the process “does not generally apply to used, spent, damaged, contaminated or degraded materials or products.”

Both Kansas and Iowa encourage use of an appropriate reverse distributor. As reported in the March 2011 Kansas State Board of Pharmacy Newsletter, “the Kansas Department of Health and Environment (KDHE) issued guidance relating to the disposal of non-controlled substance pharmaceuticals and the potential for surface and groundwater contamination.” KDHE indicates that reverse distribution is the most desirable disposal method, while incineration and disposal in trash are less desirable methods. The Board reminded pharmacists that “If a pharmacy wishes to dispose of controlled substances from its own stock, it may transfer them to a DEA-registered reverse distributor,” and that the “pharmacy must maintain a record of distribution that includes the drug name, dosage form, strength, quantity, and date transferred.”

The Iowa Pharmacy Association (IPA) provides information for processing unused drugs as hazardous waste versus processing the drugs for potential credit. The IPA notes that some reverse distributors only destroy unused medications or hazardous medications and supplies, while others have the required permits to process unused drugs for return to the manufacturer, and provides guidelines to assist pharmacies in selecting an appropriate reverse distributor.

New rules proposed by EPA in 2008 are intended to facilitate environmentally safe disposal of hazardous pharmaceutical waste by generators such as hospitals and pharmacies. The proposed rule would allow these entities to manage the waste as “handlers,” as opposed to “generators,” of universal wastes, with the intent of creating a more streamlined system for disposal of hazardous pharmaceutical waste. As part of the proposed amendment to the EPA Universal Waste Rule, reverse distributors could become universal waste handlers and accept universal waste for purposes of consolidation. “Under this scenario,” notes EPA, “reverse distributors may accept both pharmaceutical universal waste and unused and ‘creditable’ pharmaceutical products from health care facilities, but, due to requirements under current DEA regulations, reverse distributors may not accept controlled substances from consumers or other persons who are not registered with DEA.”

Currently, EPA is reviewing comments on security issues related to the transport and management of pharmaceutical wastes and the agency does not have a projected date for the finalization of the rule.

Regulations on the Horizon

Once EPA publishes the final rule, it must be adopted by states before pharmaceutical wastes can be managed under the rule, as noted by EPA. It is anticipated that proposed rules related to CS disposal and LTCFs will be published for comment by DEA in 2012. NABP will continue to provide updates as they become available.