Reed Smith Client Alerts

The Northern California County of Alameda has apparently begun to seek payment from select pharmaceutical manufacturers pursuant to the Alameda County Safe Drug Disposal Ordinance (Alameda County Code Chapter 6.53, §§ 6.53.010-6.53.120). This Ordinance imposes on the manufacturers of pharmaceuticals the burden of establishing or participating in a Product Stewardship Plan designed to collect unwanted prescription pharmaceuticals from consumers. The unused pharmaceuticals will be collected at secured drug “disposal kiosks” located at various locations in the county, and supported by “outreach” materials aimed at alerting consumers and retailers of prescription medications to the program. Importantly, the regulations impose a duty on a manufacturer to collect not just its own drugs, but any company's drugs as well.

While the safe and proper disposal of pharmaceutical products is a laudable goal, Alameda County’s regulation is ill-conceived and arbitrary. The Ordinance itself is a collection of vaguely described provisions giving county bureaucrats seemingly unchecked open-ended power to collect fees, “set performance goals,” impose penalties, and issue administrative citations for supposed non-compliance. In addition to the collection requirements, the provisions raise a number of potentially thorny questions, including monitoring emissions and waste, worker health and safety, environmental impact, and handling controlled substances.

The Ordinance prohibits manufacturers from implementing any fee to recoup the cost of the “stewardship program,” either at the time the drugs are sold in Alameda County or when the drugs are collected for disposal. The Ordinance also exempts local pharmacies from any responsibility for collecting and disposing of unused drugs. This is true even though local pharmacies are most directly connected to the purchase of drugs within the county, and are in the best position to spread the cost of collection and disposal among the consumers who actually purchase, use, and dispose of the products.

The county’s actions follow upon the recent 9th Circuit decision in Pharmaceutical Research and Manufacturers of America v. County of Alameda, No. 13-16833, 2014 WL 4814407 (9th Cir. Sept. 30, 2014), in which the court upheld the Ordinance, and rejected plaintiffs’ arguments that the regulations shifted costs to producers outside the county and violated the dormant commerce clause. In particular, the panel concluded the Ordinance did not discriminate, on its face, against drug manufacturers outside Alameda County, because it applies to all manufacturers regardless of where they may be located, and did not directly regulate interstate commerce, since the regulations did not control behavior beyond county borders. Id. at *3.

Unaddressed were the arbitrary nature of the Ordinance, in which one manufacture might be held responsible for collecting unused medications of its competitors, or the complete lack of correlation between the costs of a Product Stewardship Program and the amount of pharmaceutical that might be distributed in the county, by a specific company. The panel noted that several issues had not been contested, including the regulation’s environmental, health, and safety benefits.

Regulations similar to the Alameda County Safe Drug Disposal Ordinance have been enacted in San Francisco, and Seattle (King County, Washington). Similar to the Alameda version, the San Francisco Ordinance is composed of an educational outreach component (San Francisco Environment Code, Chapter 22, §§ 2250-2254, Safe Drug Disposal Information) and a disposal part (Environment Code Chapter 22, §§ 2200-2219, Safe Drug Disposal Stewardship). The “Findings” portion of the San Francisco Ordinance mentions the Alameda and King County regulations, as well as the 9th Circuit decision in justifying the enactment and enforcement of a “take-back” program at this time.

Many counties already have in place successful drug disposal programs for unwanted pharmaceuticals. These counties include not only King County, Washington, but also the California counties of San Francisco, Alameda, Sacramento, and Yolo. Yet despite these voluntary programs often conducted with industry support, we anticipate further efforts to shift the costs of drug disposal onto manufacturers using the Alameda Ordinance as a model.


Client Alert 2014-343