What We Can Do about Wasted Pharmaceuticals

The medicine is still perfectly good. Millions of uninsured or underinsured people need the drugs. Yet the pharmaceutical industry incinerates billions of dollars’ worth of unopened, unused, and unexpired drugs each year in America. This waste leads to both economic and environmental challenges. The good news is the problems companies create when they destroy unused medicine aren’t difficult to solve.

Waste in the Pharma System

Why is there so much waste in the system? There are several reasons, including:

• Manufacturers, wholesalers, and pharmacies carry extra drugs because of financial and patient health reasons. From a PR standpoint, whenever there’s a drug shortage, it’s headline news. Typically, when stock levels get within 3 to 12 months of expiration, the product is considered unsellable.
• Pharmacies can get a credit from their distributor for returning medicine they won’t dispense before it expires.
• Entities like nursing homes and assisted living facilities often have surplus medicine. Typically, prescriptions are dispensed in 30- or 90-day supplies. But patients may have a dosage change or move facilities, or they may pass away.
• Packaging can get damaged in transit or during the manufacturing process. The inner product itself may still be completely viable, but often these are destroyed.
• Clinical trials that test new drugs often use FDA-approved drugs in conjunction with the test drugs. At the end of those clinical trials, administrators have no option other than to destroy these FDA-approved drugs.

Problems Inherent in Destroying Medicine

Destroying all this medicine leads to two significant problems. One is environmental: Destroyed medicine can end up in the water and the air.

Some studies have found that 41 million Americans have drinking water that contains pharmaceutical pollutants. And while medicine isn’t flushed directly into our water streams anymore or put into landfills, the current best standard for destruction is incineration, which isn’t great either. Incineration has been associated with higher incidences of cancer, respiratory symptoms, and congenital abnormalities.

The other problem caused by choosing to destroy perfectly usable medicine is that patients whose medication costs are too high continue to go without. This burden on low-income households adds costs to the entire healthcare system.

Prescription drug costs have been steadily increasing for decades. The current average is $3,000 per household per year. Lack of medication results in more deaths each year than opioid overdoses and car accidents combined. This isn’t only extremely detrimental to those individuals and      their families; it also affects our entire healthcare system. Patients who skip medications cost the healthcare system $400 billion a year because of increased emergency room visits, doctor visits, and more expensive treatment for sicker patients.

Rising Drug Costs and Widening Inequities

The rising cost of prescription drugs affects financial livelihood and contributes to widening inequities. A Kaiser Health News and NPR survey found that 41% of Americans have medical debt — that’s 100 million people. About 12% report debt of $10,000 or more. It’s the primary reason why people file for bankruptcy. Two-thirds of Americans who are in this situation end up putting off care for themselves or a family member.

Another recent Kaiser Family Foundation poll showed that Black and Hispanic respondents reported substantially higher rates of having trouble affording prescription medicine. The poll showed that about 25% of white respondents couldn’t afford the cost of prescription drugs, whereas the numbers increased to 30% for Black respondents and 40% for Hispanic respondents.

These populations of color can be disproportionately uninsured, underinsured, and/or low income. Not only do they face life-and-death consequences for not taking their meds, but also they often face the largest barriers to access.

Medicine Donation as a Solution

Thankfully, a sensible solution exists. Drugmakers, wholesalers, pharmacies, nursing homes, and more can donate their unused medicine rather than destroying it — simple as that.

Many companies are already doing this, but more still needs to be done. Surplus drug donation is currently legal in 40 states across the United States. Local and state legislatures are helping to eliminate legal barriers to assist the process and protect the environment.

The companies that make a concerted effort to donate their unused supply may do it for smart business reasons. They can enjoy various kinds of savings, from decreased destruction costs to reductions in onerous staff time that might be needed to properly sort, record, and process the destruction of medicine. Many companies will also receive tax savings because pharmaceutical donations are incentivized, in contrast to destruction — with some stipulations.

These companies gain intangible benefits, too, especially when they focus on community impact by providing medication to patients who would otherwise go without. Drug donation program studies have reduced inpatient stays by 200 days per 1,000 patients. Ninety percent of patients in a different study showed that, by accessing a drug donation program, they experienced improved health, a better understanding of their prescriptions, and more agency over their healthcare.

A third benefit is a reduction in the organization’s environmental impact, which is good for everyone.

The ability to connect surplus medicine, whether it’s from a nursing home, a manufacturer, or a pharmacy, to patients in need is an opportunity to change folks’ lives, improve their health, and create a more equitable healthcare system.

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About George Wang

George Wang is co-founder of SIRUM, where he leads SIRUM’s work to save medicine. While at SIRUM, George has forged strong medicine donor partnerships with major manufacturer, pharmacy, and nursing home corporations. George has provided input on a dozen state medicine donation laws and policies, has helped get the U.S. Environmental Protection Agency to encourage facilities to work with SIRUM, and works as a liaison to the National Conference of State Legislatures to provide updates on drug donation programs. Before co-founding SIRUM, George worked in academic research and experimental design, during which time he co-authored nine peer-reviewed publications and discovered and named a gene for neural plasticity (GRLD-1). He graduated with a PhD from Stanford University in biology and Phi Beta Kappa from The Ohio State University.

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This pharmaceutical industry article is adapted from the GLG Teleconference “Inflation Reduction Act: Implications for Pharmaceutical Industry, PBMs, and Payers.” If you would like access to this event or would like to speak with pharma industry experts like George Wang or any of our approximately 1 million industry experts, contact us.