November 3, 2011

EPA’s Questions for Reverse Distributors

General Questions about the Returns Process

1. Who initiates the return? Generally the entity seeking credit initiates the return. In a recall or 

withdrawal situation the manufacturer or manufacturer’s agent will initiate the return. Does the 

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

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

provide return policy to clients as well as to the RD being used. However, the RD does not know 

exactly what the healthcare facility will be sending back each time so it does not identify that 

the credit is available in advance. Most healthcare facilities return un-needed items on a 

periodic basis, often without regard to credit. It is more an inventory maintenance issue. There 

are some health care facilities that have the RD provide this service and manage credits.

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

shipment to the RD? Many RDs have representatives who will go to healthcare facilities to 

perform these functions and prepare returns, but not all. Typically this is an additional service 

and will depend on the resources of the healthcare facility. If so, does the rep know which items 

will/will not receive credit? Generally speaking, they will know common items which will 

receive credit, but there are instances when policies change without the knowledge of the 

representative or the facility. Occasionally, product line ownership changes will change the 

credit policy and items that previously received credit may not under the new owner’s policy or 

vice versa.

3. Is credit received per container? Manufacturer’s policies vary, but most provide credit based on 

the NDC (Consumer Container, case or shelf pack). Per pill if container has been opened? Some 

manufacturers provide credit for partial containers. This is where there is a large variation in 

the way policies are established and applied.

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

been re-packaged)? If it is established that items can receive credit, a facility will return 

pharmaceuticals from any location throughout the healthcare system. However, some 

healthcare facilities have policies which do not allow patient floor pharmaceuticals to be 

returned to the pharmacy and these facilities may have a different return process. Are repackaged pharmaceuticals creditable? Generally not.

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

paid for credit percentage or per item processed, so they are incentivized to process a return 

quickly. On average returns are processed within 3-7 business days, but backlogs in excess of 

weeks could occur. It will depend on the type and size of the RD. In the event of a large recall, 

facilities which are not properly prepared can become overwhelmed; this would drastically 

increase the processing time.

6. Are generic brands creditable? Again, this will depend on the generic manufacturers’ return 

policies. Damaged shipments are almost always creditable.
November 3, 2011

7. Do expired items typically get credit? Yes. Some manufacturer’s policies do not allow for the 

credit of unexpired pharmaceuticals. Generally manufacturer’s policy does not allow for credit 

prior to 30, 60, or 90 days in advance of the expiration date. This will vary greatly among 

manufacturers and types of pharmaceuticals. 

8. How is the RD paid for its services? Most RD’s are paid on a percentage of credit received, if they 

work for the healthcare facility. They may receive payment based on a per item basis if they 

work for the manufacturer. There are additional fees for onsite services, consulting, tracking, 

destruction, etc. Does the RD receive a percentage of the credit? Usually the percentage of 

credit is paid by the healthcare facility or other creditee. Is there a flat fee? Some RDs working 

on behalf of the manufacturer tend to have flat fees per service. Services such as processing an 

NDC, NDC look up, partial container count, damage codes are examples of services for which a 

flat fee per service is charged. Recall services will vary greatly and may have some flat fee 

components once the recall is established such as storage and destruction fees. Generally a flat 

fee per month is not the only charge. Are there additional charges to the healthcare facility for 

waste management? Yes, usually there are additional fees depending on the type of material to 

be managed. This will also vary greatly if there are controlled substances which need to be 

managed.

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

distributor in lieu of sending to a RD? In cases when a shipment is damaged or it was not 

ordered, it would be returned to the forward distributor for credit from the forward distributor.

The returns to forward distributors are contractual between the healthcare facility and the 

forward distributor. 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. RD’s working for the healthcare facility on a percentage of credit usually forward 

returns from their facility to the various RD’s for manufacturers. RD’s working for a 

manufacturer will forward returns shipped incorrectly or when ownership changes occur. In 

some instances RDs with multiple facilities will experience a backlog at one facility and forward 

returns to another internal facility that does not have a backlog.

11. Do you accept non-pharmaceutical products? Yes

12. How long are pharmaceuticals kept on-site after providing credit? This could vary greatly 

depending on contractual requirements as well as the space restrictions within a facility. 

Generally, contracts mandate that pharmaceuticals are maintained for 30 days after processing. 

This allows the manufacturer to audit returns and resolve disputes. The contractual timeline

can vary and a manufacturer may ask that a particular shipment be kept longer or shorter for a 

variety of reasons. During recall events pharmaceuticals could be held indefinitely depending 

on legal requirements. How long are the pharmaceuticals that become hazardous wastes kept 

on-site? Pharmaceuticals that become hazardous waste are kept the average 30 days as 

previously described. When the manufacturer releases the return the pharmaceuticals are 

“generated” as waste. The generated hazardous waste pharmaceuticals are kept up to the 

mandatory maximum of 90 days if the facility is a large quantity generator. Most waste is not 

stored up to this time. The average time currently at our facility is around 45 days from point of 

generation. Recall materials are kept longer as the manufacturer and/or regulatory agencies 
November 3, 2011

such as the FDA may not release the pharmaceuticals and require them to be kept as evidence 

for legal proceedings. On average how long does it take a pharmaceutical to cycle through your 

facility? On average 45 days for non-hazardous pharmaceuticals 85 days for hazardous waste 

pharmaceuticals. The hazardous waste pharmaceuticals are generated much less frequently 

and thus accumulated to transfer to a hazardous waste facility within the 90 day requirement as 

we are a large quantity hazardous waste generator. 

Shipment 

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

hauler? The size of the return and the client’s transportation arrangements dictate the 

shipment method. USPS mail carriers deliver returns, as do common shipping companies such 

as UPS and Fed-ex, as well as common carriers such as ABF and Yellow freight. It is highly

unusual for the creditee to return credits with their own vehicles, however it does happen 

occasionally and it may depend on size of shipment, security and location. Is the shipment 

tracked and is the healthcare facility notified by the RD that the shipment has been received? 

The RDs request and encourage the shippers to use track able methods and tamper evident 

devices. However, unless the RD has supplied the shipping method, there is no way for the RD 

to control that process. Do healthcare facilities notify the RD that a shipment has been sent? 

RDs often request notification, but do not always receive it. A Return Authorization Form (RAF) 

is frequently required, but large shippers are either provided many RAFs or are able to create 

their own. Controlled substances as regulated by the DEA are usually shipped under the 

specifications under the statute and regulation. Notification is often dependant on the 

contractual agreements made between the shipper and the RD.

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

Generally speaking yes, however these requirements vary greatly from state to state. All 

controlled substances are required to be inventoried. Some Over the Counter medications 

(OTCs) are required to be inventoried; again this will depend on the adoption of requirements 

by states. Stericycle maintains an inventory of all processed items at a minimum for our 

records.

3. Are controlled substances shipped separately from other pharmaceuticals? Depends on the 

level of the controlled substance. RDs encourage clients to separate the controlled substances, 

however again this is in the control of the shipper. Schedule III, IV, and V are usually shipped 

together and frequently with non-scheduled items, however they must be properly identified. 

Schedule II’s are generally separated due to the additional requirements for tracking under DEA 

regulations. Can you explain more about the process of handling returned controlled 

substances? First both the entity in possession of the controlled substance (CS) and the receiver 

of the CS must be registered with the DEA. As a registrant, there are very specific protocols for 

tracking, handling, storage and securement of these materials. For Schedule II CS the shipper 

must notify the RD in advance. The RD then must create a Form 222 requesting the shipper to 

send specific quantities of specific NDC’s. The shipper communicates the quantities to the RD in 
November 3, 2011

advance. The shipper does not need to ship everything identified on the Form 222 but must 

identify on the Form 222 what has been shipped. The shipper may not ship any amount in 

excess of what is identified on the Form 222. If there are excess amounts the RD is required to 

create another Form 222. Each Form 222 may have up to 10 line items. Each line item is for a 

specific drug in a specific dosage and presentation (NDC specific). One return may have multiple 

Forms 222 associated with it. Stericycle issues a unique RAF for each Form 222. Each Form 222 

must be verified to the item level usually requiring a pill count or liquid measurement for 

opened containers. For Schedules III, IV, and V a Form 222 is not required. A registrant must 

track inventory so usually there is an inventory with the shipment either physically or 

electronically and the inventory will be verified and discrepancies resolved. Non scheduled 

items are managed in much the same way as credit is requested but not always required by 

regulation.

4. Have there been incidences where shipments have been lost or stolen? This happens but is 

rare. Stericycle has procedures in place to verify shipments and reconcile inventories as part of 

our best management practices for all shipments we have pre-inventory for. CSs have specific 

requirements and if necessary a Form 106 will be provided to the DEA describing missing or lost 

controlled substances. In the event of any kind of diversion full cooperation is provided to law 

enforcement to prevent further diversion and retrieve any missing pharmaceuticals. Controlled 

substances are highly desired and security measures are constantly evaluated and tested.

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? Approximately 5.5-6% Typically, do pharmaceuticals 

that meet RCRA’s definition of a hazardous waste get credit? Yes. RCRA status has no effect on 

credit status. Credit status is determined by manufacturer policy which is generally based on 

expiration date, order quantities, and other factors. Do you ever manage non-hazardous 

pharmaceuticals as RCRA hazardous waste? Occasionally. For items that are hard to dispose of 

via non-RCRA incinerators or pose a health risk but are not RCRA, regulated hazardous waste 

incinerators may be utilized. There may be some circumstances where the manufacturer 

dictates the final disposal method.

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

based on the contracts Stericycle has with their clients. Typically, the credit information is sent 

to the manufacturer for review prior to disposal. Again, this may vary depending on contract. 

For materials under a recall again it will be dictated by the client therefore those policies will be 

followed. For a non-creditable pharmaceutical? If an item is presented for credit but will not 

receive credit then the manufacturer is still notified prior to disposal. If an item is sent for 

disposal only, then there is no notification. The generator may be notified if they present 

pharmaceuticals for disposal that are otherwise creditable.
November 3, 2011

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

disposed of directly by the RD? This varies greatly and will be dependent on if the material is 

sent for credit versus recall. Approximately 50% are sent back to the manufacturer or their 

designee. In the cases where they are shipped to another RD then most of the material is 

ultimately destroyed. It is rare that Stericycle is requested to keep the material when it is 

anything other than for a recall.