Transcript Slide 1

Reverse Distribution & Designing a
National Consumer Rx Returns
Program
October 23, 2006
Mary Hendrickson,RPh,MBA
Director of Quality & Regulatory Affairs
Capital Returns, Inc.
[email protected]
Agenda
• Overview of pharmaceutical reverse
distribution.
• National model for a consumer pharmaceutical
returns program.
• Proposed changes in DEA regulations to
enable such a program.
Reverse Distribution
Overview
• What is reverse pharmaceutical distribution?
– Method for pharmacies, hospitals, wholesalers, etc.
to return product for potential credit from the
manufacturer.
– Product is characterized by waste stream and
incinerated.
• Why do manufacturers issue credit for expired
product?
– Manufacturers want pharmacies to stock product.
– Pharmaceutical product can be expensive and have
a short shelf life.
Process Overview
Rx Industry Distribution
and Reverse Distribution Model
Reverse
Distributors
Incinerators
Direct accounts only
Manufacturers
Chains
Wholesaler returns
Wholesalers
Debit memo information
Hospitals
Independents
Retail/Institutional Pharmacies, LTC,
Other indirect customer, etc.
Reverse Distribution
• Rigorous reverse processing is necessary:
– Environmental and regulatory concerns:
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EPA
FDA
DEA
DOT
OSHA
• Why pharmacies/manufacturers outsource:
• Penalties for failing to meet regulations
• Focus on core competencies.
Demographics of Reverse
Distribution
• Major players have 85% of the market:
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Capital Returns, Inc.
Stericycle
Guaranteed Returns
Carolina Logistics
EXP Pharmaceutical Services
• Multiple smaller reverse distributors
located throughout U.S.
Reverse Distribution Core
Functionality
• Centralizes outdated drugs into a finite number
of warehouses which can be monitored for
regulatory compliance.
• Millions of dollars returned to the healthcare
industry from pharmaceutical manufacturers
each year.
• Outdated drugs are removed from the market
in a controlled, systematic fashion resulting in
reduced diversion possibilities.
• Solid infrastructure in place for potential
national consumer take-back program.
Consumer Returns
• Currently no systematic method for consumers
to dispose of pharmaceuticals.
• Increased focus on impact of pharmaceutical
waste on the environment.
– USGS Water Quality Study
– Warning: Side Effects Can Be Severe, Common
drugs are seeping into our lakes, fish, and water
supply. May 5, 2005 Milwaukee Journal/Sentinel
– Pharmaceuticals in Waterways Raise Concern:
Effect on Wildlife, Humans Questioned. Washington
Post, July 23, 2005.
Ideal National Consumer
Drug Returns Program
• Easily accessible to all consumer
• Uses current infrastructure
• Tracks data
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NO PERSONAL DATA (HIPAA)
Name, strength, dosage form
Quantity
Pharmacy of origin
Manufacturer
• Funding
– Allocation to manufacturers of returned products
Advantages of utilizing
reverse distribution for this
process
• Limited number of sophisticated players in the market
that currently handle patient level returns.
• Core competency is receipt, documentation, and proper
disposal of outdated drugs.
• DEA registrants: have the process controls to ensure
product is not diverted and is properly disposed.
• Outsourcing of outdated drug processing by
independent retail, chain and mail-order pharmacies
approaching 100%.
• Existing relationships with pharma manufacturers.
• Precedent with DEA already exists in the management
of recalled controlled substances.
Disadvantages of retail
pharmacy recipients
• Core competency is forward dispensing.
• Lack of understanding and systems for
insuring compliant disposal.
• Ability to be reimbursed for time/disposal may
be problematic.
• Pharmacist staffing already experiencing
severe shortages
• Space for segregation and quarantine not
available.
• Opportunity for diversion substantial.
• Sheriff or other law enforcement needed for
receipt of controlled substances
Funding & Technical
Challenges
• Pharma manufacturers would need to fund the
cost of processing and disposal for their
respective drug returns.
• RDs may need to re-engineer IT systems for
this type of data.
• Retail pharmacies at all levels would need to
participate and inform consumers.
• Consumers would need to be willing to make
the effort.
Regulatory Challenges
• Drug Enforcement Administration
• US Environmental Protection
Agency
• State Environmental Protection
Agency
• DOT/USPS
• State Board of Pharmacy
Process Overview
Proposed Consumer Rx Returns Model
Manufacturers
Reverse
Distributors
Returns
Wholesalers
Dispense
Incinerators
Chains
,MailOrder
Independent
Retail Pharmacies
A winning scenario for
everyone
• Responsible consumers have a solution for the
environmentally sound disposal of unused/unwanted
prescriptions
• Diversion potential is lessened by removing
unused/unwanted medication from homes.
• Manufacturers would receive previously unavailable but
extremely valuable data on drug compliance and usage
• Insurance companies and other interested parties could
purchase data on unused Rxs and develop feedback
loops for greater compliance and outcomes analysis
• Reverse distributors provide total closed loop
processing for the pharma industry.
Current DEA RD Regulations
• Definition and Registration of Reverse
Distributors, May 2, 2005 Federal
Register
• Amended Title 21, Code of Federal
Regulations to define the term “reverse
distribution” and established a new
category of registration
• Impacted a number of existing
regulations
Relevant Supplementary
Information*
“The overall goal of the Controlled
Substances Act (CSA) and of DEA’s
regulations in Title 21, Code of Federal
Regulations (CFR), Parts 1300-1316, is
to provide a closed distribution
system so that a controlled substance
is at all times under the legal control of
a person registered, or specifically
exempted from registration, by the Drug
Enforcement Administration until it
reaches the ultimate user or is
destroyed.”
*Federal Register, Vol. 70, No 83, May 2, 2005
Relevant Supplementary
Information*
“When a controlled substances has become
outdated or otherwise unusable, the registrant
who possesses the substance must dispose of
it. However, over the past decade,
environmental concerns and regulatory
changes have caused drug manufacturers
and government agencies, (including DEA and
State authorities) to become increasingly
reluctant to be involved in the disposal
process. Thus, some disposal options are no
longer available.”
*Federal Register, Vol. 70, No 83, May 2, 2005
Relevant Supplementary
Information*
“For many years, DEA opposed granting DEA
registrations to firms solely or primarily
engaged in the disposal (whether the
transportation portion, actual disposal, or both)
of controlled substances because they were
not considered an essential link in the closed
distribution system that the Controlled
Substances Act established to control the flow
of drugs from the manufacturers to the
ultimate user. In recent years, however
increasingly stringent requirements
imposed by the U.S. Environmental
Protection Agency (EPA) resulted in fewer
and fewer approved disposal facilities.
*Federal Register, Vol. 70, No 83, May 2, 2005
Receipt from NonRegistrants Considered
• Primarily from long term care
facilities and related organizations
• Rejected due to no longer being
“part of the closed system of
distribution and are no longer
subject to DEA’s system of
corresponding accountability.”
• Consumer returns from residences
was not considered
Two Compelling Reasons to
Re-Visit Decision
• Increasing concerns regarding the
impact of all pharmaceuticals, including
controlled substances, on aquatic and
other species
– Only viable method for consumer disposal
is drain or landfill (postponed pollution)
• Rising rates of diversion and accidental
poisonings and deaths present an
unacceptable public health risk
– A consistent, cost-effective, and secure
return system would minimize these
opportunities
Precedent Already
Established
• Reverse distributors engaged in
manufacturer recalls
• DEA has approved the receipt of
the recalled controlled substance
down to the consumer level
• A consumer returns program
funded by manufacturers is
essentially the same process only
at the consumer’s discretion
Expanding the Closed Loop
• Due the symptomatic relief provided by
many controlled substances, such as
short term pain relief, many legally
dispensed prescriptions are not
completely consumed by the patient
• Bringing these unwanted medications
back into a secure, controlled,
environment has no down side
• Insuring environmentally sound
disposal methods has only positive
impacts
DEA’s Worst Case
• Because there is no way to know exactly how
many doses are being returned, RD
employees could potentially divert within the
scope of their duties
• Diversion by healthcare professionals,
pharmacy, and drug wholesaler employees
already occurs to some extent in spite of all
precautions
• Security precautions at experienced reverse
distributors equals or exceeds those of retail
pharmacies and healthcare facilities
• Removing “uncontrolled” controlled
substances from households enables at least
some level of accountability for products
Proposed Data to be
Collected
• Name and address of consumer or
agent (family member, friend)
• Name, strength, dosage form, and
number of units of drug
• Manufacturer if possible
Proposed Logistics
• Dispensing pharmacy provides RD telephone
number and email and instructs consumer to
contact RD in case of need to return
medication (Note: this procedure applies to all
medications, not just controlled substances.)
• Upon receipt of request, RD determines
approximate volume of return, name, address,
phone number of consumer or agent, and
sends out appropriately sized mailing kit with
enclosed tracking label (UPS, FedEx, etc.)
• That transaction initiates the internal audit trail
at the RD
• Upon receipt, the RD logs in the returns with
all applicable information.
Payment and Disposal
• The RD stages the controlled substances for disposal
with other routinely collected controlled substances.
• A record of the transaction is sent to the manufacturer
and a fee is assessed as previously contracted.
• The relevant data is retained by the RD as required by
the CSA. A copy of the data, minus the patient-specific
information, is forwarded to a central database for
tracking of dispensed but unused medications.
• The RD disposes of the controlled substances through a
routine witnessed incineration including a Form 41.
• ARCOS reporting would seem to be irrelevant, but if
required, a specific DEA number for this purpose could
be issued.
Proposed Changes in 21 CFR
1304.11 Inventory Requirements
Addition: (e)(iii) Exception. In the
case of receipt of a controlled
substance from a non-registrant or
their agent, the name of the
manufacturer must be included if
available.
Proposed Changes in 21
CFR1304.22(e)(3) Records
Addition: (3) For each controlled substance in finished form received
from a non-registrant (consumer or their agent.)
(i) The name of the substance.
(ii) Each finished form (e.g., 10-milligram tablet or 10-milligram
concentration per fluid ounce or milliliter) and the number of
units or volume of finished form in each commercial container
(e.g., 100-tablet bottle or 3-milliliter vial).
(iii) The number of dispensing containers of each such finished form
received from the non-registrant or their agent, including the
date of and number of containers in each receipt and the name
and address of the person from whom the containers were
received.
(iv) Where possible, the manufacturer or distributor of record of the
finished form.
(v) The number of units or volume of finished forms and/or
commercial containers disposed of including the date and
manner of disposal, the quantity of the substance in finished
form disposed, and the signatures of two responsible employees
of the registrant who witnessed the disposal.
(vi) The number of the traceable common carrier label.
Proposed Changes in 21
CFR1304.33(f) Reports to ARCOS
Addition: (f) Exceptions.
(i) A registered institutional practitioner who
repackages or relabels exclusively for
distribution or who distributes exclusively to
(for dispensing by) agents, employees, or
affiliated institutional practitioners of the
registrant may be exempted from filing reports
under this section by applying to the ARCOS
Unit of the Administration.
(ii) A reverse distributor who receives
controlled substances from a consumer or
their agent.
Proposed Changes in 21
CFR1307.21(d) Procedure for
Disposal
Addition: (d) Nothing in the above
procedures shall prevent a
consumer from mailing an
unwanted, unused controlled
substance which has legally been
in their possession or the
possession of their agent to a DEA
approved reverse distributor for the
purpose of destruction as
authorized.
SUMMARY
• Regulations regarding accessibility to
controlled substances have
continuously evolved over time
• It is time to take the next step to provide
an environmentally sound, easily
accessible, secure system to remove
unwanted controlled substances from
the legitimate consumer marketplace.
• Reverse distributors provide the logical
infrastructure for this activity.
QUESTIONS?
Mary Hendrickson,RPh,MBA
Director of Quality & Regulatory Affairs
Capital Returns, Inc.
[email protected]