Legal Constraints Potentially Affecting Medication Recycling
CRS Report for Congress
Legal Constraints Potentially Affecting
Medication Recycling
Emily M. Cowley
Law Clerk
American Law Division
Summary
In recent years, the rising costs of prescription drugs have motivated various
policymakers to implement cost-saving measures. In some cases, states have pursued
programs to collect and redistribute unused medications that would otherwise be
discarded. However, the ability to implement these so-called drug recycling programs
may be constrained by federal or state law or both. For example, medications classified
as controlled substances are regulated by the Controlled Substances Act (CSA).
Furthermore, drugs that require prescriptions, as many controlled substances do, are
regulated by the Federal Food, Drug, and Cosmetics Act (FFDCA). Additionally,
programs may encounter logistical problems related to billing under the Health
Insurance Portability and Accountability Act (HIPAA), which is not designed to
accommodate drug recycling. Despite these hurdles, states have begun to implement
drug recycling programs. Although the details of the laws vary among states, most
contain strict rules to ensure the safety of the medications. This report provides an
overview of the federal laws that may affect state drug recycling programs, as well as
examples of these state programs.1
Introduction
Problems for patients associated with dramatic increases in the cost of prescription
medications have generated a great deal of interest among the media, interest groups, and
legislators alike.2 Although no broad consensus exists regarding the causes of — and thus
solutions to — the rapid increase in many pharmaceutical prices, policymakers have
explored a number of options, including the recycling of unadulterated surplus drugs.
1 This report was prepared under the general supervision of Jody Feder, Legislative Attorney.
2 See, e.g., Andy Miller, Drug Recycling Gets a Fresh Debate, ATLANTA J.-CONST., Dec. 15,
Congressional Research Service ˜ The Library of Congress
Currently, many health care institutions, especially long-term care facilities (LTCFs),
routinely dispose of medications that otherwise have a useful life. This practice typically
occurs when drugs are dispensed to patients but remain unused because the patient
switches medication, is discharged, or dies. Studies have estimated that more than one
billion dollars worth of drugs are discarded each year in the United States.3 One way to
counter this costly practice is to recycle the unused medications. However, the ability to
implement recycling programs may be constrained by federal and/or state law.
Current regulation of pharmaceuticals and those who dispense them consists of a
complex system of federal and state laws. There are three federal laws discussed below
that may impede the practice of recycling medications. At the state level, state controlled
substances laws, pharmacy laws, and other rules promulgated by state boards of pharmacy
govern practices relating to the manufacture, distribution, and possession of medicines.
Nevertheless, state legislatures that have implemented drug recycling programs appear
to tailor them to conform to existing regulations. State laws vary greatly regarding who
may return and accept the medications, which medications may be recycled, and the
procedures in place to safeguard against adulteration or unlawful possession of the
medications.
Federal Laws Affecting Reuse of Drugs
Federal laws regulating pharmaceuticals pose potential obstacles to the
implementation of drug recycling programs. Specifically, many of the medications
covered by recycling programs are considered controlled substances and thus are subject4
to the requirements of the Controlled Substances Act (CSA). Furthermore, most, if not
all, of the drugs in question also require a prescription in order to be dispensed, and5
therefore are regulated by the Federal Food, Drug, and Cosmetics Act (FFDCA) — thus
adding another layer of federal statutory regulations. Additionally, programs to recycle
medications may also encounter logistical problems relating to billing under the Health
Insurance Accountability and Portability Act (HIPAA).6
Controlled Substances Act
One potential impediment to drug recycling programs is the CSA. Enacted in 1970
with the main objectives of combating drug abuse and controlling traffic in controlled
3 See Thomas M. Morgan, The Economic Impact of Wasted Prescription Medication in an
Outpatient Population of Older Adults, 50 J. FAMILY PRACTICE 779, 780 (2001) (noting that one
billion dollars per year is a conservative estimate of the lost due to drug waste).
4 21 U.S.C. §§ 801 et seq.
5 Id. §§ 301 et seq.
6 Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, 110 Stat. 1936
(1996). Issues related to billing difficulties may also implicate Medicaid and Medicare programs.
See, e.g., CMS: Nursing Homes Must Return Unused Meds, UNITED PRESS INT’L, Mar. 27, 2006
(reporting that Medicaid requires nursing homes to return unused medications to pharmacies
when patients leave or die). However, these issues are beyond of the scope of this report.
substances,7 the CSA created a regulatory regime criminalizing the unauthorized
manufacture, distribution, dispensation, and possession of the substances covered by the
act.8 Enforced by the federal Drug Enforcement Agency (DEA), the CSA establishes civil
as well as criminal sanctions for its violation.
The CSA is relevant to drug recycling programs because most, if not all, of the costly
medications the programs seek to recycle are considered controlled substances under the
CSA.9 Practitioners who dispense or administer controlled substances listed on Schedules
II through V, including substances that may not require a prescription, must register with
the DEA.10 Entities that apply for federal registration to handle controlled substances and
those so registered must provide effective controls and procedures to guard against theft
and diversion of controlled substances in accordance with security requirements. These
requirements vary depending on the type of activity and the substances.11
However, unlike hospitals and pharmacies, most long-term care facilities (LTCFs)
are not registrants.12 Due to the stringent safety standards imposed on registrants,
registration may not be feasible or cost-effective for many facilities to implement.
Because of the prohibition against handling or possessing controlled substances without
DEA registration, the CSA seems to preclude LTCFs — or any entity not registered with
the DEA — from effectively participating in a drug recycling program. As a result, the
DEA distribution system, which is designed to prevent diversion by establishing a closed
distribution loop among registrants for purposes of tracking all entities that handle
controlled substances prior to dispensing, often prevents LTCFs from returning such
drugs to pharmacy stock and forces them to destroy any unused controlled substances.13
An alternative to recycling programs that LTCFs may wish to pursue is the
installation of automated dispensing systems (ADS). Similar to a vending machine, an
ADS is stocked with drugs by a pharmacy, which controls the device remotely and
programs it to dispense drugs on a single-dose basis. The DEA recently promulgated a
rule to allow this practice as a way to “mitigate the problem of excess stocks and
7 See 21 U.S.C. § 801.
8 See id. § 812 (establishing the five schedules of controlled substances). Substances included
on Schedule I have a high potential for abuse, no currently accepted medical use in treatment, and
lack of accepted safety for its use whereas substances on Schedule V have a relatively low
potential for abuse, a currently accepted medical use, and limited physical or psychological
dependence even if abused. Id. § 812(b).
9 For example, Hospice Atlanta listed morphine, oxycontin and percocet — each worth about
$70 — as medications they regret discarding. see Miller supra note 2.
10 See 21 U.S.C. § 822 (a)(2); see also §802 (defining practitioner as anyone who distributes,
dispenses, administers a controlled substance in the course of professional practice).
11 See 21 C.F.R. § 1301.71 (2006).
12 See American Medical Association, Council on Scientific Affairs, Recycling of Nursing Home
Drugs, Dec. 1997, available at [http://www.ama-assn.org/ama/pub/category/print/13655.html].
13 21 C.F.R. §§ 1300, 1301, 1304, 1307 (2006).
disposal.”14 Using this system, the drugs are not deemed to be dispensed until provided
by the ADS, so any unused drugs remain in pharmacy stock.
Federal Food, Drug, and Cosmetics Act
Recycling programs must also comply with statutes that regulate the safety and
efficacy of prescription drugs. Federally, this regulation occurs under the FFDCA. One
of the purposes of the FFDCA is to ensure drug safety by prohibiting the introduction of
adulterated or misbranded foods, drugs, or cosmetics into interstate commerce.15
Therefore, programs to recycle unused prescription drugs may encounter barriers if such
recycling could lead to drug adulteration or misbranding.
The federal Food and Drug Administration’s (FDA) policy guidance reflects these
concerns. In guidance that dates back to 1980, the agency states, “[a] pharmacist should
not return drug products to his stock once they have been out of his possession. It could
be a dangerous practice for pharmacists to accept and return to stock the unused portions
of prescriptions that are returned by patrons, because he would no longer have any
assurance of the strength, quality, purity, or identity of the articles.”16 However, the FDA
has no specific regulations regarding drug recycling programs and leaves these programs
to the discretion of the state so long as state legislation does not offend applicable
regulations relating to the safety and efficacy of prescription medications.17
Health Insurance Portability and Accountability Act
A smaller administrative obstacle to the effective implementation of drug recycling18
programs is the billing requirements under HIPAA. This law requires electronic
transactions for operations conducted by pharmacies — the entities that are responsible
for accepting unused medications in many recycling programs. Every transaction that
occurs within a pharmacy must be part of the HIPAA Transactions Code Set. However,
there is currently no code for returning an unused drug to stock for credit. Without this
14 See Preventing the Accumulation of Surplus Controlled Substances at Long Term Care
Facilities, 70 F.R. 25462, 25462 (May 13, 2005).
15 See 21 U.S.C. § 331(a).
16 Food and Drug Administration, Compliance Policy Guides, § 460.30, Return of Unused
Prescription Drugs to Pharmacy Stock (1980).
17 Florida House of Representatives Staff Analysis: Cancer Drug Donation Program, Dec. 19,
2005, available at [http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx
?FileName= h0371.HCG.doc&DocumentType=Analysis&BillNumber=0371&Session=2006]
(explaining that pharmacists may be legally liable for injuries arising from contamination or
adulteration of drugs they accepted and returned to stock.)
18 Providers that would participate in drug recycling programs are likely subject to HIPAA,
because HIPAA applies to health care providers who bill or receive payment for health care in
the normal course of business and do so via electronic medium. Health Insurance Portability and
Accountability Act, §160.103(B)(3)(1).
code, such transactions cannot be properly documented and accounted for, posing an
obstacle for pharmacists and doctors who would participate in drug recycling programs.19
Current State Practice
In recent years, several states have attempted to combat waste associated with20
discarding unused medications by creating drug recycling programs. These programs
aren’t “as simple as returning ‘leftovers.’”21 Rather, most state legislation typically
specifies who may return the unused medication, who may accept the medication, what
types of medications may be returned, and to whom the medications may be22
redistributed. This section provides examples of current practices regarding such
recycling programs.
Authorized Participants. Most laws specify who may return, who may accept,
and/or who may receive unused medications.23 Some states allow patients to donate,
while others restrict the practice to pharmacies, doctors and wholesale distribution
centers. Iowa, which falls in the former category, allows any person to donate unused
medications.24 In contrast, California law allows donations only from drug manufacturers,
licensed health care facilities, and pharmacies.
Authorized Medications. Some states do not place restrictions on the drugs
included in their recycling program, while others specify the types they will accept. For
example, Nebraska restricts its drug repository program to cancer drugs.25 Wisconsin
19 See Fred Gebhart, Medication Recycling: New Patients for Old Pills, 149 DRUG TOPICS 37
(2005).
20 As of 2005, the following states have medication recycling laws in place: Arkansas, Colorado,
Connecticut, Florida, Georgia, Hawaii, Indiana, Iowa, Louisiana, Minnesota, Mississippi,
Missouri, Montana, Nebraska, Nevada, New Jersey, New York, Ohio, Oklahoma, South Dakota,
Texas, Utah, Vermont, Virginia, Wisconsin, and Wyoming. see National Conference of State
Legislatures, Recycling Unused Drugs, State Legislatures: Trends and Transitions, Aug. 2005,
[hereinafter Trends and Transitions] available at [https://www.ncsl.org/programs/
pubs/slmag/2005/05SLJulAug_TandT.pdf]. Massachusetts and Rhode Island have laws to study
the effects of drug recycling programs. Id.
21 See Trends and Transitions, supra note 20.
22 Many of the recycling programs are intended to benefit the state’s low-income residents that
are not otherwise eligible for other state programs. For example, Maine legislation specifies that
to be eligible for the program, a person must have a family income below 350% of the federal
poverty level, and may not be receiving MaineCare prescription drug benefits. An Act to Plan for
a Pilot Program for Distributing Unopened Medicines and Medical Supplies, Private & Special
Laws, ch. 20 (Me. 2005) .
23 Most recycling programs are intended to benefit low-income residents who are not otherwise
eligible for other state programs. See, e.g., supra note 23. Rhode Island’s pilot program provides
for donation to medically indigent state residents. R.I. Gen. Laws §§ 23-25.4-1 et seq (2006).
24 See Iowa Code §§ 135M.1 et seq. (2005).
25 See R.R.S. Neb. §§ 71-2422 et seq. (2006).
began its recycling program as a cancer drug repository, but later expanded it to include
prescription drugs and supplies for all other chronic diseases such as diabetes.26
Additional Precautions. States also impose restrictions to ensure that the
medications are safe. Safety requirements are fairly uniform across most states. They
typically require that medications be in their original, unopened sealed packaging or in27
single unit doses that are individually contained in unopened, tamper-evident packaging.
Most states also prohibit the return of medications that will expire within six months or28
appear to be adulterated or misbranded in any way.
Despite the precautions states have attempted to build into their recycling programs,
some people remain unconvinced that these programs are completely safe.29 Critics argue
that insufficient safety controls may lead to adulterated, dangerous medicines, and drugs
that land in the wrong hands. They also argue that the actual process of repackaging30
medications can pose safety hazards. Nevertheless, states seem intent on continuing to
tailor their legislation in order to conform to existing law, while simultaneously acting as
laboratories to test new cost-effective measures.
26 See Wis. Stat. § 255.056 (2006).
27 See, e.g., Wyo. Stat. §§ 35-7-1601 et seq. (2006).
28 See, e.g., id.
29 See, e.g., Melissa Davis, Omnicare’s Recycling Headache, THE STREET.COM, Sept. 8, 2005,
[http://www.thestreet.com/stocks/melissadavid/10241462.html]. Patrick Burns of Taxpayers
Against Fraud argues that dangers posed by the repackaging process are above and beyond other
safety issues like contamination and misbranding. Id. Additionally, many interest groups such as
the Long Term Care Pharmacists Alliance oppose drug recycling programs, because they believe
the practice to be unsafe. See Long Term Care Pharmacy Alliance, Return and Reuse of Nursing
Home Drugs, at [http://www.ltcpa.org/policy/resources/papers/returnreuse.asp] (last visited July
30 Id.