BILL ANALYSIS                                                                                                                                                                                                    

          |SENATE RULES COMMITTEE            |                        SB 423|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  SB 423
          Author:   Bates (R)
          Amended:  8/31/15  
          Vote:     27 - Urgency

           AYES:  Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

           SUBJECT:   Retail nonprescription surplus products:  
                     determinations for reuse

          SOURCE:    Author

          DIGEST:   This bill establishes a process for the handling and  
          management of retail nonprescription pharmaceutical surplus  

          Existing federal law:

          1)Authorizes, under the Food, Drug, and Cosmetic Act, the Food  
            and Drug Administration (FDA), to oversee the safety of food,  
            drugs, and cosmetics.

          2)Regulates, under the Resource Conservation and Recovery Act  
            (RCRA) of 1976, the management of solid and hazardous wastes.   
            In the context of pharmaceuticals, RCRA imposes strict  
            protocols for the collection of controlled substances.

          Existing state law:  


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          1)Provides that under the Medical Waste Management Act (MWMA),  
            administered by the State Department of Public Health:
             a)   Regulates the management, handling, and disposal of  
               medical waste, as defined, including pharmaceutical waste.

             b)   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.

             c)   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, 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  

             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)Provides that under the Hazardous Waste Control Act (HWCA),  
            administered by the Department of Toxic Substances Control  
            (DTSC), regulates the management, handling and disposal of  
            hazardous waste, as defined.

          This bill:  

          1)Establishes, until January 1, 2022, 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  


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            establish standards for the proper and safe handling of retail  
            nonprescription pharmaceutical surplus products.

          3)Specifies that a facility that elects to follow the procedures  
            in this bill is not subject to regulation of specified  
            products by the MWMA.

          4)Declares the urgency of this statute.

          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  


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          soil.  Additionally, there are occupational hazards for  
          incinerator workers.

          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  
          FDA 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  

          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.

          Striking a balance.  MWMA, HWCA and other state and federal  


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          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.

          FISCAL EFFECT:   Appropriation:    No         Fiscal  
          Com.:YesLocal:   Yes

          According to the Senate Appropriations Committee this bill will  
          have unknown costs to the Hazardous Waste Control Account for  
          DTSC to "register" specified entities.

          SUPPORT:   (Verified8/27/15)

          California Retailers Association
          CVS Health

          OPPOSITION:   (Verified8/27/15)

          None received

          Prepared by:Rachel Machi Wagoner / E.Q. / (916) 651-4108
          8/30/15 19:48:52

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