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<p class="MsoNormal" style="MARGIN: 0in 0in 0pt; LINE-HEIGHT: normal"><font face="Calibri"><span style="FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman","serif"; COLOR: black">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
</span><span style="FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman","serif"; COLOR: black">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.</span></font></p>
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<p>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.</p>
<p>The summary is:</p>
<p class="MsoNormal" style="MARGIN: 0in 0in 10pt; LINE-HEIGHT: normal">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.<span style="mso-spacerun: yes">
</span><o:p></o:p></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 10pt; LINE-HEIGHT: normal"><span style="FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman","serif"; COLOR: black"><font face="Calibri">The report states a lower cost estimate that assumes a medicine collection amoutnts
similar to existing medicine return programs in Canada.<span style="mso-spacerun: yes">
</span>The high estimate assumes a six-fold higher collection amounts similar to some of the existing medicine return programs in Europe.</font></span></p>
<p class="MsoNormal" style="MARGIN: 0in 0in 0pt; LINE-HEIGHT: normal"><span style="FONT-SIZE: 12pt; FONT-FAMILY: "Times New Roman","serif"; COLOR: black"><font face="Calibri">Both the lower and higher cost estimates included expenses that the drug producers
likely can avoid in their program design, such as:<o:p></o:p></font></span></p>
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<font face="Calibri"><span style="FONT-SIZE: 12pt; FONT-FAMILY: Symbol; COLOR: black; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt "Times New Roman""><font size="3"> </font></span></span></span><span style="FONT-SIZE: 12pt; COLOR: black">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<o:p></o:p></span></font></p>
<p class="MsoListParagraphCxSpLast" style="MARGIN: 0in 0in 0pt 39.45pt; LINE-HEIGHT: normal; TEXT-INDENT: -0.25in; mso-add-space: auto; mso-list: l0 level1 lfo1">
<font face="Calibri"><span style="FONT-SIZE: 12pt; FONT-FAMILY: Symbol; COLOR: black; mso-fareast-font-family: Symbol; mso-bidi-font-family: Symbol"><span style="mso-list: Ignore">·<span style="FONT: 7pt "Times New Roman""><font size="3"> </font></span></span></span><span style="FONT-SIZE: 12pt; COLOR: black">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.<o:p></o:p></span></font></p>
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<div class="PlainText"><font size="2" face="Calibri">Margaret Shield PhD, Policy Liaison<br>
Local Hazardous Waste Management Program in King County<br>
cell 206-265-9732 <br>
<em>Local Governments for Health and the Environment - www.lhwmp.org<br>
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<div id="divRpF111993" style="DIRECTION: ltr"><font color="#000000" size="2" face="Tahoma"><b>From:</b> pharmwaste-bounces@lists.dep.state.fl.us [pharmwaste-bounces@lists.dep.state.fl.us] on behalf of Ed Gottlieb [EGottlieb@cityofithaca.org]<br>
<b>Sent:</b> Saturday, January 31, 2015 7:32 AM<br>
<b>To:</b> pharmwaste@lists.dep.state.fl.us<br>
<b>Subject:</b> [Pharmwaste] Est cost of take back per site?<br>
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The pharmaceutical lobby claims that the cost of take back programs is too high. </div>
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I'd like to estimate what it would cost and see how that compares, percentage wise, to other industries with product stewardship programs. </div>
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I don't know<span style="FONT-SIZE: 10pt"> </span><span style="FONT-SIZE: 10pt">w</span><span style="FONT-SIZE: 10pt">hat</span><span style="FONT-SIZE: 10pt"> 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? </span><span style="FONT-SIZE: 10pt"> </span></div>
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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.<br>
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In 2009, gross sales of <span style="FONT-SIZE: 10pt">pharmaceuticals in the </span>US totalled<span style="FONT-SIZE: 10pt"> 300 billion dollars [</span><a style="FONT-SIZE: 10pt; COLOR: rgb(17,85,204)" href="http://www.bls.gov/ppi/pharmpricescomparison.pdf" target="_blank">http://www.bls.gov/ppi/<wbr>pharmpricescomparison.pdf</a><span style="FONT-SIZE: 10pt">].
With the growth of health care costs, it is safe to assume that this is now a low number. </span></div>
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<div style="DIRECTION: ltr; BACKGROUND-COLOR: rgb(255,255,255)"><span style="FONT-SIZE: 10pt">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 </span>a lot<span style="FONT-SIZE: 10pt"> to cover the costs of a take back program. Using my assumptions, 300 million dollars is roughly $3500 per collection site per year. </span></div>
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<div style="FONT-SIZE: 10pt; DIRECTION: ltr">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. <span style="FONT-SIZE: 10pt"> </span></div>
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<div style="FONT-SIZE: 10pt; DIRECTION: ltr">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. </div>
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<div style="FONT-SIZE: 10pt; DIRECTION: ltr">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? </div>
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<div style="FONT-SIZE: 10pt; DIRECTION: ltr">Your thoughts are appreciated!</div>
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<div style="FONT-SIZE: 13px; FONT-FAMILY: Tahoma"><font size="+0"><span lang="en-US">
<div>Ed Gottlieb<br>
Chair, Coalition for Safe Medication Disposal<br>
</div>
<div>Industrial Pretreatment Coordinator</div>
<div>Ithaca Area Wastewater Treatment Facility<br>
525 3<font size="3" face="Times New Roman"><sup>rd</sup></font> Street</div>
<div>Ithaca, NY 14850</div>
<div>(607) 273-8381</div>
<div>fax: (607) 273-8433</div>
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