December 22, 2011

Kristin Fitzgerald 

Environmental Protection Agency 

Office of Resource Conservation and Recovery

5304P

Washington, DC 20460 

Via Electronic Transmission to Fitzgerald.Kristin@epa.gov

Re: Questions on the Reverse Drug Distribution System 

Dear Ms. Fitzgerald:

Thank you for contacting the Healthcare Distribution Management Association (HDMA) with questions 

regarding drug reverse distribution. We hope you find the answers included in the attachment to this 

letter helpful as you continue to develop the pharmaceutical waste rule. 

In preparing this response, we wanted to clarify certain points and assumptions underlying some of our 

answers, particularly when our explanations cannot be very extensive. Specifically,

 To HDMA, the term “process” means the act of determining that the product may receive credit 

from the manufacturer followed by a determination of the product’s disposition, such as whether 

the unit is suitable for resale or donation, should be returned back to the manufacturer in 

accordance with the manufacturer’s return goods policy, or arrange for proper disposal according to 

applicable EPA, state and DEA regulations and laws. 

 You will note that in several places, we state that decisions are based on the manufacturers’ return

goods policies. In these policies, manufacturers defined the products, quantities and other 

conditions that must be met when returning a product so that the manufacturer is able to 

determine suitability for potential reuse or other disposition of the product. On average, a forward 

distributor obtains supplies from approximately 1,1001healthcare product manufacturers, and each

manufacturer has developed their own return goods policy or policies that vary from drug to drug or

manufacturer to manufacturer and can change at any time. Moreover, typical forward distribution 

companies inventory nearly 56,000 healthcare products. Thus, given the sheer numbers of different 

drugs and manufacturers, we found it impossible to provide a single answer for several of the 

questions.

 

1

 The exact number is constantly fluctuating with changes in the marketplace. The 1,100+ number is the measured standard for 

the industry for 2011 but reflects an average of the most active and broadest manufacturers. Table 6. 2011-2012 HDMA 

Factbook. The Facts, Figures & Trends in Healthcare. 2011. 
HDMA Responses to EPA on RD

December 22, 2011 2

 HDMA has prepared these questions jointly with our forward and reverse distributor members. 

However, they may, on their own, choose to provide responses to some of the questions. 

If you have any questions, please do not hesitate to contact me at 703-885-0240 or at 

aducca@hdmanet.org.

Sincerely,

Anita T. Ducca

Vice President, Regulatory Affairs
HDMA Responses to EPA on RD

December 22, 2011 3

Attachment – Answers to EPA’s Questions for Reverse Distributors

Provided by the Healthcare Distribution Management Association

December 22, 2011

General Questions about the Returns Process

1. Who initiates the return?

 Typically, the reverse distributor’s (RD) customer has a process in place for determining when 

to send a return. 

 These processes vary for each facility.

Does the RD alert the healthcare facility that credit is available for certain pharmaceuticals or do 

healthcare facilities periodically go through inventory to return un-needed items?

 As noted above, healthcare facilities typically have processes in place for reviewing inventory 

and returning products.

 The typical industry practice is that a customer ships the product back to a RD at which point 

the RD evaluates the product for credit worthiness. 

 The RD usually maintains records of manufacturers’ return goods policies which will include 

credit information. Once the products are processed at the RD, credit eligibility is 

determined in accordance with the product manufacturer’s return goods policy.

2. Does the RD have reps that go to healthcare facilities to pull and prepare pharmaceuticals for 

shipment to the RD? 

 It depends on the business model of the RD and on arrangements with the customer/ 

healthcare facility. 

 If an RD employee performs this process, it is usually at the customer’s request. 

If so, does the rep know which items will/will not receive credit?

 The person pulling the product on behalf of the customer, in order to place it in reverse 

distribution, does not have knowledge about which products will receive credit and which 

will not. 

 Credit determination is assessed at the RD facility and is based on the product 

manufacturer’s return goods policy.

3. Is credit received per container? 

 Each manufacturer has its own policies regarding what will and will not receive credit.

 Credit can be given per container.

 These policies vary from manufacturer to manufacturer and are subject to change. 
HDMA Responses to EPA on RD

December 22, 2011 4

Per pill if container has been opened?

 Yes, it may be possible to obtain credit on a “per pill” count, also referred to as a partial 

return, contingent on the manufacturer’s return goods policy.

4. Do healthcare facilities return pharmaceuticals from the patient floors (e.g., drugs that have been 

re-packaged)? 

 It is possible, yes, and the healthcare facilities would probably have a better understanding 

of this type of return and their frequency.

Are re-packaged pharmaceuticals creditable?

 Generally, no, but there are instances where a manufacturer’s return goods policy will permit 

credit for repackaged pharmaceuticals. Availability of credit may depend upon the product 

condition and the reason for the return (e.g., a manufacturer-initiated recall of all products

from the market for safety reasons).

5. Once the shipment arrives at the RD facility, what is the timeframe for processing?

 Processing time varies by company, and is performed in accordance with local, state and 

federal requirements applicable to the RD’s facility.

 Allowing sufficient flexibility in the timeframe for processing products is critical for the 

industry to accommodate various business models, customer needs, and state, local and 

federal regulatory requirements, including DEA, DOT and FDA.

6. Are generic brands creditable?

 Yes, in accordance with the manufacturer’s return goods policy.

7. Do expired items typically get credit?

 Generally, the expired items are eligible for credit in accordance with the manufacturer’s

return goods policy.

8. How is the RD paid for its services? 

 On the advice of counsel, HDMA declines to facilitate a response to this question. HDMA 

antitrust policy forbids discussion in HDMA-sponsored activities of prices for services, 

components of prices for services and other related matters involving terms and conditions 
HDMA Responses to EPA on RD

December 22, 2011 5

of sale. A company must exercise its independent business judgment in pricing its services 

and products, dealing with its customers and suppliers and choosing the markets in which it 

will compete. 

Does the RD receive a percentage of the credit? 

 See above.

Is there a flat fee?

 See above.

Are there additional charges to the healthcare facility for waste management?

 See above.

9. Under what circumstances would a healthcare facility return pharmaceuticals to a (forward) 

distributor in lieu of sending to a RD? 

 Depending on the contractual agreement with the customer, returns from a healthcare 

facility to a (forward) distributor could be due to issues such as mis-shipped product, overorders, damaged product, recalled product or general returns.

Do you process pharmaceuticals from (forward) distributors?

 Yes

10. When pharmaceuticals are received at the RD, are they ever shipped to another RD’s facility for 

crediting?

 Yes, depending on the instructions in the product manufacturer’s return goods policy.

11. Do you accept non-pharmaceutical products?

 Yes 

12. How long are pharmaceuticals kept on-site after providing credit? 

 It varies. Products are processed in accordance with the local, state and federal 

requirements applicable to the RD’s facility.
HDMA Responses to EPA on RD

December 22, 2011 6

How long are the pharmaceuticals that become hazardous wastes kept on-site? 

 Waste is stored in accordance with EPA, RCRA or state environmental agency requirements 

which vary based on the location’s generator status (i.e., CESQG, SQG and LQG status).

On average, how long does it take a pharmaceutical to cycle through your facility?

 It varies. Products are processed in accordance with the local, state and federal 

requirements applicable to the RD’s facility and based on manufacturer return goods policy 

instructions.

Shipment 

1. Are returned pharmaceuticals shipped to the RD via commercial mail carrier or USPS or private 

hauler? 

 Yes, returns are shipped by any of the above mentioned methods. 

Is the shipment tracked and is the healthcare facility notified by the RD that the shipment has 

been received? 

 Shipping, tracking and notification vary.

Do healthcare facilities notify the RD that a shipment has been sent?

 Shipment notification varies.

2. Does the board of pharmacy require RDs to keep an inventory of everything received at an RD? 

 Boards of Pharmacy requirements vary by state.

 FDA regulations also require establishment of distribution procedures and maintenance of 

certain distribution records in accordance with current Good Manufacturing Practices. See 

21 C.F.R. § 211.150 (distribution procedures), §211.196 (records of name, strength of dosage 

form, name and address of consignee, etc.).

3. Are controlled substances shipped separately from other pharmaceuticals? 

 Controlled substances are shipped in accordance with DEA regulations which do not 

specifically require segregation. 
HDMA Responses to EPA on RD

December 22, 2011 7

Can you explain more about the process of handling returned controlled substances?

 Controlled substances are handled in accordance with DEA regulations. These regulations 

are extensive and cover security for storage, shipment, handling, accompanying order forms 

and other documentation. See 21 C.F.R. 1300 and the following sections for a complete 

description. 

4. Have there been incidences where shipments have been lost or stolen?

 Cargo theft and loss information for forward and reverse distributors is available from FDA 

(through its Cargo Theft Website) and DEA (through DEA Form 106), as well as through local

law enforcement. FDA reporting is voluntary. DEA reporting is required under the Agency’s 

regulations.

2 While we do not track individual incidents on an industry level, forward and 

reverse distributors have secure systems for management of these incidences and are in 

compliance with all applicable state and federal requirements.

Waste Determination and Management

1. What percentage of returned pharmaceuticals is typically RCRA hazardous waste once it is 

determined credit will or will not be given? 

 We estimate that 5 percent or less of returned pharmaceuticals are classified as RCRA 

hazardous waste. 

Typically, do pharmaceuticals that meet RCRA’s definition of a hazardous waste get credit? 

 Waste classification does not have bearing on credit. Credit is based on the manufacturer 

return goods policy.

Do you ever manage non-hazardous pharmaceuticals as RCRA hazardous waste?

 It varies, but the practice depends, for example, on the RD’s business model, the 

requirements of the licensed treatment, storage and disposal facilities and EPA, state, local 

and federal requirements.

2. Is the manufacturer always contacted prior to disposal of a creditable pharmaceutical?

 Not always. It varies by manufacturer and contractual arrangements.

 

2

21 C.F.R. 1301.74(c). 
HDMA Responses to EPA on RD

December 22, 2011 8

For a non-creditable pharmaceutical?

 It varies by manufacturer and contractual arrangements.

3. What percentage of returned pharmaceuticals is sent back to the manufacturer versus being 

disposed of directly by the RD?

 RDs do not dispose of pharmaceuticals directly (unless they are a licensed treatment, storage 

and disposal facility). However, the percentages they send back to manufacturers vary 

depending, for example, on the RD’s business model. 

 RDs manage pharmaceuticals in accordance with state, local and federal requirements and if 

necessary, arrange for disposal by a licensed contract disposal company.