                 EPA/HQ Summary  -  Communications with Inmar

Attendees

Inmar Participant:
Kristin Alstad
EPA/HQ Participant:
Drew Lausch

Dates:  December 16, 2016; January 5, 2017; January 10, 2017; January 12, 2017

Location:  E-mail Exchanges

Summary

EPA HQ posed a question to a representative from Inmar, which provides reverse logistics services, supply chain analysis, and asset recovery solutions services, regarding prescription drugs (Rx) and the "aging" process that occurs when otherwise potentially creditable pharmaceuticals are held based on the manufacturer's current return policy. As an example, EPA noted its experience that a manufacturer does not take back indated (non-expired) items even though the drug meets all the creditable criteria  -  except that it has not yet expired  -  adding that pharmaceuticals may sometimes be held for many months or even longer during the "aging" process.

EPA stated its understanding that "aging" would only occur in the case of Rx drugs and not with other items such as over-the-counter medications (OTCs) and dietary supplements but requested clarification.  EPA also asked about the rationale for "aging" pharmaceuticals; in other words, why certain pharmaceuticals that would otherwise be creditable cannot be returned for credit until the expiration date is met.

Inmar indicated that EPA is correct that "aging" applies almost exclusively to Rx and added that, although there are a few exceptions with certain higher value "OTC Pharma" type products (e.g., test strips, meters), this probably constitutes less than .1%.  Inmar further stated that there are minimum product dollar values typically associated with what items will be "aged" due to the additional cost and, since most OTC items are inexpensive as compared to Rx, the additional expense is not warranted.
 
Inmar also indicated that this process is entirely driven by the policies that the manufacturers set for eligibility of credit for returned Rx, adding that eligibility for credit may not require drugs to be expired.  Inmar further stated that it is not unusual for drugs to be eligible for credit at some point prior to the expiration date  -  in other words, a drug may become eligible for credit (based on the manufacturer's policy) when it is within three months of the expiration date.

EPA also posed a question to Inmar regarding the differentiation between Rx drugs versus OTCs and dietary supplements (non-Rx) in terms of the crediting process, particularly noting that manufacturers and retailers may enter into contacts where the retailer receives an upfront rebate for assumed non-salables, as opposed to manufacturer's credit after the fact (i.e., distinction between "swell allowances of adjustable rate policies" and traditional return policies).  EPA added that the swell allowance/adjustable rate policy model appears to be used more (or perhaps even exclusively) for non-Rx, although the Agency was not certain on this point and asked for feedback.

EPA's take-away, based on Inmar's feedback, is that the swell/adjustable rate policy credit model is seldom used for Rx (e.g., 1% or less of the time) but is much more commonly used for non-Rx and/or other types of retail items that become unsalable for whatever reason.

