Thomas Brugato is a Special Counsel in the Washington, DC office of Covington & Burling LLP. He has particular expertise in advising companies on environmental-related issues arising in the context of product recalls. His practice focuses on environmental matters, including complex waste- management issues under RCRA, and he has advised several companies on practical considerations relating to EPA’s new hazardous waste pharmaceutical rule.
Under the Resource Conservation and Recovery Act (“RCRA”), waste deemed “hazardous waste” is subject to onerous regulatory requirements, including: a 90-day storage limitation, shipment to a RCRA-permitted facility for disposal, and tracking from generation to disposal via a manifest system. Moreover, RCRA “hazardous waste” can include a wide variety of products not typically thought of as falling within that category, such as pharmaceuticals, airbags, electronics, and aerosol cans. Against this backdrop, EPA’s recently finalized rule regulating “hazardous waste pharmaceuticals” under RCRA has major implications not only for pharmaceuticals, but also for recalls of other categories of products.
The rule adopts a specialized regime governing the management of certain hazardous waste pharmaceuticals discarded by healthcare facilities or managed by so-called “reverse” distributors—i.e., entities that coordinate return of unwanted, unused, or expired pharmaceuticals, which may be eligible for manufacturer credit when returned. Last month the EPA clarified their reverse logistics policy under RCRA as described in the pharmaceutical rule “applies beyond pharmaceuticals and to the entire retail sector.”1 The new regime is generally less onerous than EPA’s previous RCRA rules, but will nevertheless pose compliance challenges because EPA has generally not enforced RCRA in the context of pharmaceuticals. EPA and states are likely to increase enforcement efforts in this area, now that the rule has entered into force in EPA-administered states, and has been adopted by a number of states with delegated authority under RCRA.
EPA’s rule is significant for product recalls, including outside of the pharmaceutical sector. Companies engaged in recalls of products subject to RCRA’s hazardous waste requirements may be able to avoid the application of RCRA by coordinating with the agency overseeing the recall as well as EPA.
Pharmaceuticals that either bear certain defined characteristics (i.e., are ignitable, toxic, corrosive,
or reactive), or contain chemicals that are on lists published by EPA, have historically been subject to regulation as hazardous wastes under EPA’s general RCRA rules when disposed. EPA proposed in 2015 a new subpart of the RCRA regulations that would apply solely to hazardous waste pharmaceuticals, which it finalized in early 2019.
The rule became effective in August 2019. Most states have delegated RCRA authority, and so may choose to add more stringent or broader requirements (but will be required at a minimum to adopt the EPA rules, which EPA views as more stringent than its current rules). Market participants should work with counsel to ensure compliance with RCRA’s sometimes arcane requirements, including state-specific requirements, as well as EPA’s 960-page response to comments document interpreting the regulatory requirements set forth in the rule. They should also conduct reviews of their reverse-distribution contracts and related policies to ensure that they are not unnecessarily causing more pharmaceuticals to fall into the category of hazardous waste. Particularly in light of RCRA’s $37,500 per day penalty for each violation and EPA’s likely upcoming enforcement efforts, the importance of ensuring compliance should not be underestimated.
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