California Enforces Broad ‘Stewardship Program’ Requirement for Pharmaceutical Companies | Hogan Lovells
The California Pharmaceutical and Sharps Waste Management Act (Public Resources Code Sections 42030 through 42036.4) requires the establishment and implementation of statewide programs for the collection, management, and disposal of Proper Disposal of Pharmaceutical and Sharps Waste Generated at Covered Homes (collectively, “Covered Products”). The law applies to manufacturers of any brand name or generic drug, sold, offered for sale, or distributed in the State of California in any form, with certain exemptions, as noted below. If there is no manufacturer with state ties, then the law applies, in descending order, to distributors, remanufacturers, brand owners and importers of covered products sold in California (collectively, “entities covered”).
The law required covered entities to have a responsible stewardship program in place by January 7, 2022, which provides for the safe and convenient collection, transportation and disposal of drugs and “sharps” waste generated at home. , including hypodermic needles, lancets. and other similar items. Companies had the option of adopting their own stewardship program or joining a program established by a 501(c)(3) stewardship organization; in either case, the program had to be reviewed by the California State Board of Pharmacy and then provided to CalRecycle by July 7, 2021 for approval.
To date, three stewardship organizations have submitted program plans to CalRecycle:
As of June 23, 2022, CalRecycle approved MED-Project USA’s plan, which represents more than 200 covered entities, with the requirement that it be fully implemented by September 5, 2022.
The Drug Takeback Solutions Foundation program, which applies to approximately ten covered entities, was conditionally approved on February 16, 2022, with the requirement that the plan be fully implemented by November 13, 2022.
UltiMed, Inc. has submitted its own plan for home-generated sharps waste. As of June 23, 2022, CalRecycle determined that UltiMed’s plan did not yet meet all applicable requirements and requested that a revised plan be submitted within 60 days.
Shortly after the effective date of the law, covered entities were required to submit a list of covered products, as well as a list and description of any drugs or sharp objects that did not meet the definition of a covered product, at the California State Board of Pharmacy. These lists must be updated annually by the Covered Entity or a stewardship organization on behalf of the Covered Entity. Stewardship programs must also submit annual reports to CalRecycle that outline program activities during the previous year, as well as a budget for the stewardship program for the following year. Covered entities are responsible for payment of all administrative and operational costs associated with the stewardship program in which they participate, including the costs of collection, transportation and disposal of covered products as well as quarterly administrative fees which cover the costs of implementation and enforcement of the Act.
CalRecycle has a “Pharmaceuticals and Sharps Enforcement Team” that provides compliance monitoring and enforcement of pharmaceutical and sharps waste management. Inspectors determine compliance through research and field inspections. This enforcement team has already sent advisory letters to several companies doing business in the state, advising them that they appear not to be complying with the law due to their failure to put a recovery plan in place. stewardship. CalRecycle may impose administrative penalties of up to $10,000 per day for noncompliance with the law, unless the violation is intentional, knowing or reckless, in which case it may impose administrative penalties of up to $50,000 per day.
By June 30, 2022, CalRecycle was required to publish the list of stewardship programs and covered entities that comply with the law, with the list to be updated annually thereafter; it’s online here. Distributors and wholesalers of Covered Products, as well as pharmacies and other retailers that sell Covered Products are required to monitor the List and notify CalRecycle if it determines that a Covered Product it is selling is from an entity covered that is not on the list. Covered entities that are not on the list but demonstrate compliance with the law before CalRecycle publishes its updated list may request a letter of certification from CalRecycle stating that they are in compliance with the law.
The law contains exceptions for all organic products and all combination products that include an organic product, as well as for vitamins, supplements, herbal and homeopathic remedies, cosmetics, soap, household products (eg. example, laundry detergent, cleaning products), personal care products, medical devices provided they do not contain a covered drug, animal drugs, solutions used for kidney dialysis and drugs for which a pharmaceutical stewardship program or drug take-back program is provided in the state under an FDA Required Risk Assessment and Mitigation Strategic (REMS). Companies that are unsure whether their products may be exempt should seek legal counsel and, if appropriate, be prepared to respond to the California Pharmaceutical & Sharps Enforcement team, or otherwise ensure the implementation of a management program state approved.