[Pharmwaste] RE: Est cost of take back per site?

[Shield, Margaret]

Hi Ed, I've done various cost estimate scenarios over the years and I find that a per site estimate has its limitations.   The costs of a medicine return system are greatly influenced by how program operations are designed and on the total amount of medicines collected.  The amount of medicines collected per each drop-off site is influenced by how many nearby drop-off sites are also available to collect medicines from residents.  There are both fixed and variable costs to be considered.  Some costs, such as program promotion and administration are not directly related to the number of collection sites, and gain efficiencies with larger scales.  Perhaps the best approach is to make reasonable assumptions about the collection system design, and then estimate costs for various numbers of collection sites.


Please see attached for a public staff report to the King County Board of Health from May 2013.  On pages 10-11 there is an summary of costs analysis conducted to estimate the cost of the Secure Medicine Return Regulations to drug manufacturers.

The summary is:
Total costs to all drug producers selling medicines in or into the county are estimated in the ballpark of $1 million per year, which is less than 0.1% of annual medicine sales in the county or roughly a few pennies per prescription in costs to the drug producers.
The report states a lower cost estimate that assumes a medicine collection amoutnts similar to existing medicine return programs in Canada.  The high estimate assumes a six-fold higher collection amounts similar to some of the existing medicine return programs in Europe.
Both the lower and higher cost estimates included expenses that the drug producers likely can avoid in their program design, such as:

·    law enforcement staff time for transportation of all collected medicines if controlled substances are included, which is no longer required under the new DEA rule for collection of controlled substances, and

·    warehousing of drugs prior to final disposal, which can be avoided through program design where medicines are transported directly from collection sites to disposal facility.





Margaret Shield PhD, Policy Liaison
Local Hazardous Waste Management Program in King County
cell 206-265-9732
Local Governments for Health and the Environment - www.lhwmp.org

________________________________
From: pharmwaste-bounces at lists.dep.state.fl.us [pharmwaste-bounces at lists.dep.state.fl.us] on behalf of Ed Gottlieb [EGottlieb at cityofithaca.org]
Sent: Saturday, January 31, 2015 7:32 AM
To: pharmwaste at lists.dep.state.fl.us
Subject: [Pharmwaste] Est cost of take back per site?

The pharmaceutical lobby claims that the cost of take back programs is too high.

I'd like to estimate what it would cost and see how that compares, percentage wise, to other industries with product stewardship programs.

I don't know what percent of gross sales are used to pay for outreach, waste collection and disposal by industries with lifecycle programs.  Maybe the folks at PSI have some numbers?  Does the percent vary widely or are they in the same ballpark?  Could a pharmaceutical program be done for a similar or lower percentage?

A quick check shows there are approximately 67,000 pharmacies (Wiki) and 16,000 nursing homes (CDC) in the U.S. Couldn't find a number for narcotic treatment centers.  It is not likely that every pharmacy, long term care facility, and narcotic treatment center will become a collection site, even if the cost of the program is covered.  I'm going to optimistically assume high participation rate of 85,000 collection sites.

In 2009, gross sales of pharmaceuticals in the US totalled 300 billion dollars [http://www.bls.gov/ppi/pharmpricescomparison.pdf].  With the growth of health care costs, it is safe to assume that this is now a low number.

Not yet knowing what percent of gross sales other industries put into collection and disposal, I'm going to make a big assumption.  I'd guess that most people would agree that 1/10 of 1% of gross sales is not a lot to cover the costs of a take back program.  Using my assumptions, 300 million dollars is roughly $3500 per collection site per year.

Obviously, the start-up cost for a pharmaceutical program is significantly higher than the ongoing costs since drop boxes need to be purchased, staff needs to be trained, and outreach materials developed.  We should also assume there will be ongoing government oversight costs that need to be covered.

There is an economy of scale that applies here.  For example, if the manufactures chose to work together, one outreach program could be used nationwide, tweaking it for maximum effectiveness in different regions.  Also, the cost of a collection box (roughly 7-9 hundred) will come down some with large volume purchases.

Are my assumptions and quoted numbers reasonable?  How does the $3500/site figure compare to the start up and maintenance costs of your take back program?

Your thoughts are appreciated!

Ed Gottlieb
Chair, Coalition for Safe Medication Disposal
Industrial Pretreatment Coordinator
Ithaca Area Wastewater Treatment Facility
525 3rd Street
Ithaca, NY  14850
(607) 273-8381
fax: (607) 273-8433
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