Appeals Court Upholds Calif. County’s Industry-Funded Drug Disposal Program

In a legal blow to the pharmaceutical industry, a federal appeals court upheld a California county ordinance that requires drug manufacturers to collect and dispose of unwanted medicines, a program that advocates say will serve as a national model.

By a 3-0 vote, the Ninth Circuit Federal Court rejected the appeal by three national brand and generic trade groups that had argued Alameda County’s 2012 ordinance violated the Commerce Clause of the U.S. Constitution by requiring interstate manufacturers to conduct and pay for the drug disposal program.

The three-judge panel countered that the ordinance neither discriminates against nor directly regulates interstate commerce, according to its Sept. 30 ruling. Specifically, the ordinance does not discriminate because it applies to all manufacturers that make their drugs available in Alameda County, the ruling said. Furthermore, the program does not directly regulate interstate commerce because it does not control conduct beyond the boundaries of the county.

The judges also said they could not determine if the ordinance substantially burdens interstate commerce because the plaintiffs provided no evidence it would affect the interstate flow of goods.

Plaintiffs in the appeal were PhRMA, GPhA and BIO.

The program, which aims to prevent accidental poisonings and abuse by children, as well as environment damage caused when drug products enter waterways, will become a national model for other local governments, said Alameda County Supervisor Nate Miley.

The first-of-its-kind ordinance requires all manufactures of brand and generic drugs that sell or distribute products in the county to operate and finance a Product Stewardship Program, which includes providing for the collection, transportation and disposal of unwanted drugs. The ordinance also requires manufacturers to promote the stewardship program through education and outreach materials.

Assuming manufacturers jointly operate the program, start-up costs would be roughly $1.1 million, and total annual costs to each manufacturer would be between $5,300 and $12,000, according to the ruling. Under the ordinance, manufacturers are prohibited from implementing a point-of-sale tax or fee to recoup costs.

PhRMA said it supports consumer education programs aimed at the safe use and disposal of medicines. But the group rejects Alameda’s approach, claiming it off-loads the costs of a local take-back program onto out-of-state consumers and businesses.

Mit Spears, PhRMA general counsel and executive vice president, said that the FDA and other federal agencies have noted that in-home disposal is one of the many easy options for consumers to dispose of expired and unused products. The FDA, for example, says almost all medicines can be safely disposed of by throwing them away in the household trash, if they are first mixed with an unpalatable substance, such as kitty litter, and placed in a container such as sealable plastic bag.

Meanwhile, PhRMA is reviewing its legal options and will decide next steps in consultation with member companies and co-plaintiffs, Spears said. The case could be appealed to the Supreme Court. — Neal Learner

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.