EPA s proposed hazardous waste pharmaceutical regulations

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1 EPA s proposed hazardous waste pharmaceutical regulations November 4, 2015 By J. Timothy Ramsey The United States Environmental Protection Agency ( EPA ) published proposed regulations in the Federal Register on September 25, 2015, concerning management of hazardous waste pharmaceuticals by healthcare facilities and pharmaceutical reverse distributors. The proposed regulations, if promulgated, will for the first time create a federal regulatory program designed specifically for the management of hazardous waste pharmaceuticals by the healthcare industry and pharmaceutical reverse distributors. The potential impact on the healthcare industry from these regulations, if and when promulgated, could be significant. The original 60-day comment period on the proposed regulations was set to expire on November 24, However, because of the large number of healthcare facilities that are potentially affected by the proposed regulations, EPA has indicated on its web page that it will extend the comment period for another 30 days (ending on December 24, 2015), although EPA has not yet published notice of the extension in the Federal Register. Background Healthcare facilities typically generate pharmaceutical wastes. Some, but not all, of these pharmaceutical wastes constitute hazardous wastes under the federal Resource Conservation and Recovery Act ( RCRA ), which implements a cradle to grave regulatory program for generation, management and disposal of hazardous wastes. To the extent that pharmaceutical wastes generated by healthcare facilities are RCRA hazardous wastes, the extensive RCRA hazardous waste regulations presently in effect apply to the management and disposal of such wastes. EPA has been concerned that many healthcare facilities (many of which generate only small quantities of hazardous waste pharmaceuticals) are not equipped, and do not have trained personnel, to comply with RCRA hazardous waste regulations, given that their primary mission is the delivery of healthcare services. EPA notes that many healthcare facilities routinely dispose of waste pharmaceuticals by flushing them down the toilet, which causes them to be transported to sewage treatment plants. EPA indicates that many such sewage treatment plants do not remove pharmaceuticals in the wastewater treatment process, and that therefore the pharmaceuticals are often present in the sewage plant s discharges of treated wastewater to rivers, lakes and streams. EPA indicates that, as a result, detectible levels of pharmaceuticals are now found in much surface water, groundwater and drinking water in the United States, posing a threat to human health and the environment. One of the principal objectives of EPA s proposed regulations is to end the This newsletter is intended as an information source for the clients and friends of Nixon Peabody LLP. The content should not be construed as legal advice, and readers should not act upon information in the publication without professional counsel. This material may be considered advertising under certain rules of professional conduct. Copyright 2015 Nixon Peabody LLP. All rights reserved.

2 practice of disposal by healthcare facilities of hazardous waste pharmaceuticals in sewer systems and to replace that practice with a new regulatory program specifically designed for management and disposal of hazardous waste pharmaceuticals. Key features of the proposed regulations are structured around the common practice in the healthcare industry of returning some (but not all) unused pharmaceuticals to the pharmaceutical distributor or manufacturer for manufacturer s credit. This manufacturer s credit has significant economic value for many healthcare facilities. The process entails a healthcare facility s return of unused pharmaceuticals to a pharmaceutical reverse distributor or to the manufacturer for a determination of whether the healthcare facility is entitled to a manufacturer s credit. To the extent that such returned pharmaceuticals constitute RCRA hazardous wastes, this industry practice may violate RCRA regulations currently in effect. In the absence of a clearly delineated federal program, some states have enacted their own state laws to address management and disposal of waste pharmaceuticals. For example, Illinois enacted the Safe Pharmaceutical Disposal Act, effective January 1, 2010, which (with some limited exceptions) prohibits healthcare institutions from disposing of unused medications into a public wastewater collection system or septic system. For its part, New York State has made pharmaceutical hazardous wastes a top enforcement priority and is encouraging some 30,000 facilities that it believes are subject to RCRA to enter into environmental audit agreements to foster compliance assurance. EPA has for several years expressed interest in establishing a federal regulatory program under RCRA that would establish controls on the management and disposal of hazardous waste pharmaceuticals to protect human health and the environment, without disrupting the key (and economically significant) healthcare industry practice of manufacturers credits. In 2008, EPA proposed regulations under RCRA that would provide for management and disposal of hazardous waste pharmaceuticals under the RCRA universal waste program, which allows relaxed regulatory requirements for certain categories of hazardous wastes. As a result, two states Michigan and Florida amended their state universal waste regulations to include hazardous waste pharmaceuticals. However, EPA backed away from this universal waste proposal and instead has now issued the proposed new regulations that are specific to hazardous waste pharmaceuticals generated and managed by healthcare facilities and pharmaceutical reverse distributors. The proposed new regulations, if promulgated, would be added as a new Subpart P under the RCRA hazardous waste regulations at 40 CFR Part 266. If the proposed regulations are promulgated, Michigan and Florida will need to amend their state regulations to remove hazardous waste pharmaceuticals from the state universal waste program and to conform to the new federal regulations. Pharmaceuticals affected by the proposed regulations The proposed regulations would apply only to hazardous waste pharmaceuticals, which means that the material would have to be both a pharmaceutical and a hazardous waste under RCRA. The term pharmaceutical is broadly defined and includes dietary supplements, prescription drugs, over-the-counter drugs, residues of pharmaceuticals remaining in containers, personal protective equipment contaminated with pharmaceuticals and clean-up material from spills of pharmaceuticals. In order for the pharmaceutical to be a hazardous waste under RCRA, the pharmaceutical must be a solid waste, and it must either (i) be specifically listed in the RCRA regulations as a hazardous waste or (ii) exhibit one or more of the characteristics of hazardous - 2 -

3 wastes, i.e., be ignitable, corrosive, reactive or toxic. Waste pharmaceuticals that are not classified as hazardous wastes would not be subject to the proposed regulations. However, healthcare facilities can elect to manage all of their waste pharmaceuticals under the standards that apply to hazardous waste pharmaceuticals under the proposed regulations. Under these proposed regulations, EPA creates different categories of hazardous waste pharmaceuticals as follows: A potentially creditable hazardous waste pharmaceutical is a hazardous waste pharmaceutical that has the potential to receive manufacturer s credit and is (i) unused or un-administered and (ii) unexpired or less than one year past expiration date. This term does not include evaluated hazardous waste pharmaceuticals, residues of pharmaceuticals remaining in containers, contaminated personal protective equipment and cleanup material from pharmaceutical spills. In other words, only some hazardous waste pharmaceuticals qualify as potentially creditable hazardous waste pharmaceuticals. An evaluated hazardous waste pharmaceutical is a hazardous waste pharmaceutical that was previously a potentially creditable hazardous waste pharmaceutical but (i) has been evaluated by a pharmaceutical reverse distributor to establish whether it is eligible for manufacturer s credit and (ii) will not be sent to another pharmaceutical reverse distributor for further evaluation or verification. A non-creditable hazardous waste pharmaceutical is a hazardous waste pharmaceutical that is not expected to be eligible for manufacturer s credit. As described below, the requirements of the proposed regulations vary depending on which of these categories applies to the particular hazardous waste pharmaceutical. In the past, EPA has taken the position that hazardous wastes generated by individual residents of long-term care facilities are exempt from RCRA requirements as household wastes. In the proposed new regulations, EPA would reverse that position and would require that all hazardous waste pharmaceuticals generated at long-term care facilities, including those generated by individual residents, be managed and disposed of in compliance with the new proposed Subpart P. The U.S. Drug Enforcement Administration ( DEA ) has regulatory requirements that apply to controlled substances. Some hazardous waste pharmaceuticals also constitute controlled substances under DEA regulations, and the DEA regulations applicable to controlled substances are in some respects inconsistent with the proposed EPA regulations applicable to hazardous waste pharmaceuticals. In order to avoid this inconsistency, the proposed EPA regulations will allow generators of hazardous waste pharmaceuticals that are also controlled substances to be managed in accordance with DEA regulations instead of the proposed EPA regulations, subject to some limitations. One key limitation for this exemption is that any such hazardous waste pharmaceuticals that are also controlled substances must be disposed of by incineration at a RCRA permitted or interim status hazardous waste incinerator or a permitted municipal solid waste incinerator. Healthcare facilities affected by the new regulations The proposed regulations will apply to healthcare facilities, which is defined as follows: - 3 -

4 (1) Any person that: (i) provides preventative, diagnostic, therapeutic, rehabilitative, maintenance or palliative care, and counseling, service, assessment or procedure with respect to the physical or mental condition, or functional status, of a human or animal or that affects the structure or function of the human or animal body, or (ii) sells or dispenses over-the-counter or prescription pharmaceuticals. (2) This definition includes, but is not limited to, hospitals, psychiatric hospitals, ambulatory surgical centers, health clinics, physicians offices, optical and dental providers, chiropractors, long-term care facilities, ambulance services, coroners and medical examiners, pharmacies, long-term care pharmacies, mail-order pharmacies, retailers of over-the-counter medications and veterinary clinics and hospitals. The breadth of this definition of healthcare facilities is not accidental. In the preamble to the proposed regulations, EPA estimates that the regulations would affect approximately 174,000 facilities, including approximately 6,500 hospitals, 7,800 veterinary clinics, 11,000 pharmacies, 61,000 physicians offices, 35,000 dentists offices, 11,000 outpatient care centers and ambulatory healthcare facilities, 4,500 nursing care facilities, 1,600 continuing care retirement communities and 56 pharmaceutical reverse distributors. RCRA generally establishes different regulatory requirements for large-quantity generators of hazardous wastes ( LQGs ), small quantity generators of hazardous wastes ( SQGs ) and conditionally exempt small quantity generators of hazardous wastes ( CESQGs ). Generally, the regulatory requirements for LQGs are the most stringent, with less stringent regulatory standards for SQGs and even more reduced standards for CESQGs. Under the proposed regulations, healthcare facilities that are LQGs and SQGs would be subject to the same regulatory standards, and healthcare facilities that are CESQGs would be subject to reduced regulatory standards. It is important to note that the proposed regulations apply only to hazardous waste pharmaceuticals. As such, other types of hazardous wastes that are generated by healthcare facilities and pharmaceutical reverse distributors remain subject to RCRA requirements that are generally applicable to non-pharmaceutical hazardous wastes. Prohibition on sewer disposal of hazardous waste pharmaceuticals A key feature of the proposed regulations is the prohibition on sewer disposal of hazardous waste pharmaceuticals. This prohibition applies to all healthcare facilities that generate hazardous waste pharmaceuticals, regardless of generator status, so it will apply to LQGs, SQGs and CESQGs. This prohibition also applies to all pharmaceutical reverse distributors. This prohibition in and of itself will require that healthcare facilities and pharmaceutical reverse distributors must manage hazardous waste pharmaceuticals without the easy option of flushing them down the toilet. Other requirements applicable to generators under the proposed regulations In addition to the prohibition on sewer disposal, the proposed regulations will establish numerous other regulatory requirements for healthcare facilities that generate hazardous waste pharmaceuticals, including the following: - 4 -

5 Generators must file notifications with EPA that specifically identify them as generators of hazardous waste pharmaceuticals. Generators must train their employees in proper waste handling and emergency procedures. Generators must determine whether their waste pharmaceuticals are RCRA hazardous wastes so as to constitute hazardous waste pharmaceuticals. However, generators have the option, in lieu of this determination, to manage all of their waste pharmaceuticals as hazardous waste pharmaceuticals under the proposed regulations. Generators are authorized to send potentially creditable hazardous waste pharmaceuticals to pharmaceutical reverse distributors, but are prohibited from sending any other hazardous wastes (such as non-creditable hazardous waste pharmaceuticals) to a pharmaceutical reverse distributor. All hazardous waste pharmaceuticals other than potentially creditable hazardous waste pharmaceuticals must be sent to a RCRA permitted or interim status hazardous waste facility. Generators must comply with standards for containers used to accumulate non-creditable hazardous waste pharmaceuticals and properly label such containers. Generators are prohibited from accumulating non-creditable hazardous waste pharmaceuticals on site for longer than one year, subject to extension only in very limited circumstances with EPA approval. Generators must file reports with EPA and keep records of manifests and other documents. Long-term care facilities that house individuals who self-administer their pharmaceuticals must collect any unused non-creditable hazardous waste pharmaceuticals from those individuals and manage them under the new regulations. Generators would continue to be subject to EPA s land disposal restriction regulations at 40 C.F.R. Part 268. Generators must maintain inventories of pharmaceuticals that either are or are not considered to be possibly eligible for manufacturers credit. Generators must comply with specific shipping and transportation requirements. Generators must comply with certain specific requirements relating to management of hazardous waste pharmaceutical residues in containers and dispensed syringes. Healthcare facilities that qualify as CESQGs are exempt from many of the requirements in the proposed regulations. However, CESQGs would be subject to the following requirements: CESQGs remain subject to the RCRA regulatory requirements that are generally applicable to CESQGs as described in 40 C.F.R However, CESQGs have the option of complying with all of the regulatory requirements that are applicable to LQGs and SQGs of hazardous waste pharmaceuticals instead of complying with the requirements in 40 C.F.R The prohibition on sewering of hazardous waste pharmaceuticals would apply to CESQGs. CESQGs would be authorized to send their potentially creditable hazardous waste pharmaceuticals to a pharmaceutical reverse distributor. CESQGs would be authorized to send their hazardous waste pharmaceuticals off-site to another healthcare facility that complies with the other requirements of the proposed regulations

6 Long-term care facilities that are CESQGs would be authorized to dispose of hazardous waste pharmaceuticals in a collection receptacle of an authorized collector under DEA regulations so long as they are managed and disposed of in compliance with DEA regulations. CESQGs would be subject to the regulatory requirements for management of hazardous waste pharmaceutical residues in containers and dispensed syringes. Requirements applicable to pharmaceutical reverse distributors Pharmaceutical reverse distributors of hazardous waste pharmaceuticals would be authorized under the proposed regulations to accept and accumulate potentially creditable hazardous waste pharmaceuticals without a RCRA permit, if they comply with the requirements in the proposed regulations, including without limitation the following: Pharmaceutical reverse distributors must maintain inventories of potentially creditable hazardous waste pharmaceuticals. Pharmaceutical reverse distributors must comply with specific packaging, labeling and marking requirements. Pharmaceutical reverse distributors must dispose of the potentially creditable hazardous waste pharmaceuticals within 90 days. Conclusion The proposed new EPA regulations, if promulgated, would have a significant impact on management and disposal practices regarding hazardous waste pharmaceuticals at healthcare facilities. As noted above, the comment period for the proposed regulations expires on December 24, It is likely that, if EPA promulgates the regulations, it will make some changes from the proposed regulations in response to comments or otherwise. However, given EPA s longstanding interest in creating a program to address hazardous waste pharmaceuticals in the healthcare industry, it would seem likely that EPA will in fact promulgate regulations in final form and that they may be similar in key features to the proposed regulations. If this is accurate, then healthcare facilities and pharmaceutical reverse distributors would be well advised to begin the process of developing policies and procedures, and educating personnel, to review current practices and to be prepared to comply with the regulations once they are promulgated. Given the potentially significant impact on the industry, healthcare facilities may also want to submit comments to EPA. For more information on the content of this alert, please contact your Nixon Peabody attorney or: J. Timothy Ramsey, , Our attorneys and environmental technical professionals provide transactional due diligence services for a broad spectrum of industrial sectors, lenders, developers and insurers. We also represent property owners and potential developers in evaluating, allocating, mediating and, where necessary, litigating, matters relating to environmental site contamination and potential vapor intrusion risk, including frequently working with technical experts on risk assessment, forensic - 6 -

7 analysis of chemical and petroleum constituents, remediation, community outreach and communication of risk-related issues. Nixon Peabody LLP has been listed in the 2016 edition of U.S. News/Best Lawyers Best Law Firms as the Healthcare Law Firm of the Year

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