BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: SB 423 ----------------------------------------------------------------- |Author: |Bates | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |7/6/2015 |Hearing |7/15/2015 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |Yes |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Rachel Machi Wagoner | | | | ----------------------------------------------------------------- SUBJECT: Retail nonprescription surplus products: determinations for reuse. ANALYSIS: Existing federal law: 1)Under the Food, Drug, and Cosmetic Act, the Food and Drug Administration (FDA) is authorized to oversee the safety of food, drugs, and cosmetics. 2)Under the Resource Conservation and Recovery Act (RCRA) of 1976, the management of solid and hazardous wastes is regulated. In the context of pharmaceuticals, RCRA imposes strict protocols for the collection of controlled substances. Existing state law: 1) Under the Medical Waste Management Act (MWMA), administered by the State Department of Public Health (DPH), a) Regulates the management, handling, and disposal of medical waste, as defined, including pharmaceutical waste. b) Defines "pharmaceutical" as a prescription or over-the-counter human or veterinary drug including, but not limited to, a drug as defined in the Sherman Food, SB 423 (Bates) Page 2 of ? Drug and Cosmetic Law or the Federal Food, Drug, and Cosmetic Act. "Pharmaceutical" does not include any pharmaceutical that is regulated pursuant to either RCRA or the Radiation Control Law; and certain items, such as household waste, are specifically excluded from the definition of medical waste. c) Defines "pharmaceutical waste" as any pharmaceutical that for any reason may no longer be sold or dispensed for use as a drug and excludes from this definition those pharmaceuticals that still have potential value to the generator because they are being returned to a reverse distributor for possible manufacturer credit. d) Specifies that waste comprised only of pharmaceuticals is hazardous, and is considered "medical waste," although it is not subject to hazardous waste laws, as specified. 2) Under the Hazardous Waste Control Act (HWCA), administered by the Department of Toxic Substances Control, regulates the management, handling and disposal of hazardous waste, as defined. This bill: 1) Until January 1, 2022, would establish criteria to be followed for the handling and management of retail nonprescription pharmaceutical surplus products, as defined, if a reasonable determination for reuse has been made or when a reasonable determination for reuse cannot be made but the product has been recalled as required by law. 2) Authorizes DTSC to adopt regulations as deemed necessary to establish standards for the proper and safe handling of retail nonprescription pharmaceutical surplus products. 3) Declares the urgency of this statute. SB 423 (Bates) Page 3 of ? Background Risks of pharmaceuticals in the environment. A study conducted by the United States Geological Survey (USGS) from 1999-2000 sampled 139 streams across 30 states and found that 80% had measurable concentrations of both prescription and nonprescription drugs, steroids, and reproductive hormones. Since the USGS released its report in 2002, a number of studies have demonstrated the low-level presence of pharmaceutical agents throughout the environment and water supply. While the human effects of pharmaceutical agents in the environment are not fully understood, harm to aquatic organisms and ecosystems due to low levels of pharmaceutical agents are clearly established. As California further explores the re-utilization of water through water recycling, prevention of contamination becomes crucial to prevent public health exposure through water. Health risks associated with incineration. Incinerators are known to release numerous toxic chemicals into the atmosphere and to produce ashes and other solid waste residues that contaminate the air, water and soil as well as vegetation in the vicinity of the facility. Adverse health effects associated with incineration are of great concern as large population groups and workers may be exposed to derived toxic substances. Many of these chemicals are known to be persistent, bioaccumulative, carcinogenic or endocrine disruptors. Populations living near incinerators are potentially exposed to chemicals by way of inhalation of contaminated air, consumption of contaminated foods, water or dermal contact with contaminated soil. Additionally, there are occupational hazards for incinerator workers. Comments 1) Purpose of Bill. According to the author, SB 423 is intended to build on recent California legislation that has helped to streamline the safe and efficient handling of SB 423 (Bates) Page 4 of ? pharmaceuticals, other health care products, and household consumer products sold by retailers in this state. The author states that when these products are not sold at an initial point of sale for various reasons, the products are often processed at a reverse distribution center where the center performs various activities such as consolidation, repackaging, donation, disposal upon completion of any of these management activities. The author further states that jurisdiction over these products at the point they are considered discarded or recycled under current law, including when they are considered stored or accumulated for discard or recycling, can fall under either the California Medical Waste Management Act or hazardous and solid waste provisions of the Health and Safety Code. The author asserts that this dual jurisdiction has led to confusion in the regulated community and threatens to undermine positive aspects of the reverse distribution system for managing pharmaceuticals, including over-the-counter pharmaceuticals and household consumer products in California. The author states that multiple stakeholder discussions have taken place on the issues of retail waste, including over-the-counter pharmaceutical waste in California. The author believes that SB 423 would provide waste management options that would reconcile the confusion over dual jurisdiction by providing a unified waste management option for the over-the-counter pharmaceuticals. 2) The confusion over "pharmaceutical waste." According to federal and California law, a pharmaceutical is anything that contains a "drug fact" label. A drug fact label is affixed to any product that makes a health claim. These products must meet specified federal Food and Drug Administration ingredient testing, disclosure, labeling and verification of health claim requirements. This includes prescription and over-the-counter drugs as well as some consumer products that make health claims, such as sunscreen, toothpastes, mouthwashes or lotions that contain sunscreen. Pharmaceuticals are medical waste and are required to be managed under MWMA, which is designed to ensure that medical waste does not enter the environment and does not present a risk to public health. SB 423 (Bates) Page 5 of ? However, toothpaste, mouthwashes, lotions and other over-the-counter products that do not contain drug facts are not medical waste. Depending on their characteristics and risks posed they must be handled pursuant to either hazardous or solid waste statutes, as defined and specified. Retail establishments argue that the various statutory and regulatory requirements of when a product becomes a waste and how it must be handled make it difficult for their employees to determine the appropriate handling. Additionally, MWMA requires that medical waste be incinerated. The retailers argue that because of the complexity of the current regulatory scheme, they are currently not separating products that may be able to be donated or liquidated from those that are deemed waste if there is any question that they may instead be required to be disposed of, in order to ensure that they don't violate the various statutory waste handling requirements. The retailers assert that the result is a far greater than necessary rate of disposal/incineration of items that could have been retained for their useful life. 3) Striking a balance. MWMA, HWCA and other state and federal waste laws have specific requirements for handling, transportation and disposal to protect public health and the environment. When alternative management standards are adopted, the standards are narrowly crafted and contain specific conditions for tracking, handling, transportation and disposal to accommodate the unique nature of the wastestream. SB 423 recognizes the public policy benefit of diverting more waste and crafts an alternative management scheme that provides some flexibility within the statute for the point at which this category of items is determined to be a waste. While it is important in providing this flexibility, it is equally important that it be balanced with appropriate tracking and accountability to ensure safe handling and enforceability of the statute. 4) Does this bill indicate (again) a need to reform MWMA for pharmaceutical waste? The California Legislature has heard bills each year reforming the MWMA for the management concerning the reuse of unused prescription drugs, transport of unused prescription drugs from retails, take-back of prescription drug waste for disposal, take back and disposal of sharps waste. Is this bill further indication that MWMA SB 423 (Bates) Page 6 of ? needs to be reformed to better accommodate pharmaceutical waste? Related/Prior Legislation SB 1014 (Jackson, 2014) would have required a producer of a pharmaceutical sold in this state, individually or through a stewardship organization, to submit a plan to CalRecycle by January 1, 2015. The plan would have needed to provide for the development of a program to collect, transport, and process home-generated pharmaceutical drugs and to include specified aspects, including the minimum amount of collection sites, including by January 1, 2016, at least one collection service within 10 miles per person in the state. AB 1442 (Wieckowski, Chapter 689, Statutes of 2012) defines pharmaceutical waste for purposes of the Medical Waste Management Act, and exempts a pharmaceutical waste generator or parent organization that employs health care professionals who generate pharmaceutical waste from specified medical waste hauling requirements if the generator, health care professional, or parent organization retains specified documentation and meets specified requirements and if the facility receiving the medical waste retains specified documentation and meets specified requirements. This bill also authorizes pharmaceutical waste to be transported by the generator or health care professional who generated the pharmaceutical waste, a staff member of the generator or health care professional, or common carrier, as defined, pursuant to these provisions. SOURCE: California Retailers Association SUPPORT: CVSHealth OPPOSITION: None received ARGUMENTS IN SUPPORT: Proponents for SB 423 state their support for SB 423 but have concerns where they seek additional amendments: SB 423 (Bates) Page 7 of ? The purpose of SB 423 is to add a new provision of the Health and Safety Code, relating to the reverse distribution of unsold household consumer products, and to amend the California Medical Waste Management Act (Act) to provide an alternative management option for unsold non-prescription drugs. SB 423 is needed to address regulatory confusion under current law regarding reverse distribution and strengthen environmental protection programs at retail facilities in California. This legislation could potentially create an opportunity for waste minimization by chain drug stores and others that manage large volumes of unsold consumer products and non-prescription drugs, also known as over-the-counter pharmaceuticals (OTCs). Current law can be read to require that all unsold consumer products are potential solid, hazardous, or medical wastes at retail locations unless the retailer knows with certainty at the store that the product can be reused for its intended purpose or reclaimed by thousands of original manufacturers. The timing of this knowledge does not match typical retail processes that rely on reverse distribution to consolidate products for business purposes, including potential donation, sale to third-party liquidators, and waste minimization, prior to any decision to discard the products. Further, and related to this product management, the Act can be read to require that OTCs must be managed and incinerated as medical waste. Currently, recycling or waste minimization is not an option for OTCs because the Act can be read to mandate incineration. Mandatory incineration for OTCs is excessive and contrary to good environmental stewardship where there may be other options for managing these products when they can no longer be sold to the public. Primary areas for further discussion should the bill move forward include: 1) Regarding generator knowledge, retailers do not know at retail locations whether a product will be donated or liquidated. The role of the reverse distributor is to help direct the products for reuse or return to the manufacturer, manufacturer's agent or vendor. Thus, so long as the retail location does not know that the ultimate disposition of the product will be disposal, and the product is in a condition that it can be reused, we trust this is sufficient knowledge SB 423 (Bates) Page 8 of ? by the retailer to qualify for the option. 2) Regarding licensing for reverse distributors and reverse distribution centers, further clarification is needed to know whether there is flexibility on these requirements because reverse distributors under SB 423 should not need the same licensing as those facilities under AB 1442 that are accepting prescription and dangerous drugs for disposal. 3) Regarding transportation requirements, because retailers will be shipping surplus products back in a manner like the products are shipped to stores, we trust that the packaging and transportation requirements for surplus product shipments can match as close as possible current safe and secure transport practices that must meet the requirements of other laws. 4) Regarding product tracking requirements, we would hope to rely on current shipping documentation such as bills of lading to track surplus products. Because these shipments are valuable to retailers for credit, tax purposes and inventory, documentation exists today to track these shipments that could be used for purposes of SB 423. We trust there is flexibility on this point as well. -- END --