BILL ANALYSIS                                                                                                                                                                                                    

                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 423 (Bates) - Retail nonprescription surplus products:   
          determinations for reuse
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          |Version: July 6, 2015           |Policy Vote: E.Q. 7 - 0         |
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          |Urgency: Yes                    |Mandate: Yes                    |
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          |Hearing Date: August 17, 2015   |Consultant: Marie Liu           |
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          This bill meets the criteria for referral to the Suspense File. 

          Summary:  AB 423 would establish a process for the handling and  
          management of retail nonprescription pharmaceutical surplus  

           Unknown costs to the Hazardous Waste Control Account (special)  
            to the Department of Toxic Substances Control (DTSC) to permit  
            additional new transfer stations.
           Unknown potential costs to the Hazardous Waste Control Account  
            (special) to DTSC to develop necessary regulations.

          Background:  The Department of Public Health (DPH) regulates the  
          management, handing, and disposal of medical waste under the  
          Medical Waste Management Act. Medical waste includes  
          pharmaceutical waste, which under federal and California law is  


          SB 423 (Bates)                                         Page 1 of  
          any product that includes a "drug fact" label that is affixed to  
          any product that makes a health claim. This definition includes  
          some consumer products that make health claims, such as  
          sunscreen, toothpaste, mouthwash, or lotions.
          DTSC regulates the management, handling, and disposal of  
          hazardous waste, as defined, in accordance with the Hazardous  
          Waste Control Act. 

          Proposed Law:  
            This bill would establish a handling and management process  
          for retail nonprescription pharmaceutical surplus products. This  
          process would require the product to be transported to a reverse  
          distributor or a reverse distribution center for evaluation,  
          liquidation, donation, or transfer back to a manufacturer or  
          supplier. The product must be transported with a tracking  
          document that identifies specific information including the UPC  
          label and the name and contact information of the generator. 
          The reverse distributor or reverse distribution center would be  
          required to maintain tracking documents for three years, submit  
          a hazardous materials business plan, and be licensed by the  
          California State Board of Pharmacy as a wholesaler of dangers  
          drugs. The reverse distributor would also be required to be  
          permitted by DTSC as a transfer station and registered by DTSC  
          as a hazardous waste generator, transfer facility, or storage  

          This process would only apply to a pharmaceutical that may be  
          sold without a prescription and has been either determined to be  
          eligible for reuse by a waste generator or is a recalled  
          product. A pharmaceutical that is eligible for reuse would be  
          defined as a product that is in unadulterated packaging, in a  
          condition suitable for resale, and not designated for disposal. 

          Comments:  This bill authorizes DTSC to develop regulations to  
          implement this new waste management process for nonprescription  
          pharmaceuticals. At this time DTSC does not know the universe of  


          SB 423 (Bates)                                         Page 2 of  
          products to which this bill may apply and whether any of these  
          products can be considered hazardous. Depending on the size and  
          characteristics of the products that could follow the process  
          created by this bill, DTSC may need regulations of unknown  
          complexity or none at all.
          The new handling and management process established by this bill  
          may prompt more facilities seeking to be permitted by DTSC as a  
          transfer station in order to comply with the bill's requirement.  
          A straightforward transfer station permit typically takes  
          $156,000 in staff time to review and process. However, the  
          permit fee is only between $8,500 and $50,600, with the balance  
          of the costs being covered by the Hazardous Waste Control Act.  
          Depending on the number of facilities that would seek permitting  
          by DTSC, which is unknown, costs could be minor to the millions  
          of dollars. Staff notes that DTSC currently has a significant  
          backload in addressing permit applications. The additional  
          facilities seeking permitting to comply with this bill could  
          potentially exasperate this backlog. Staff notes that DPH also  
          permits transfer stations and it may be the author's intent that  
          this requirement is in reference to DPH's permits.

          This bill also requires that a reverse distributor be  
          "registered" with the DTSC as a hazardous waste generator,  
          transfer facility, or storage facility. It is unclear the cost  
          implications of this provision as transfer and storage  
          facilities are "permitted" and hazardous waste generators are  
          neither "registered" or "permitted."  Staff recommends  that this  
          bill be clarified. 

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