Spotlight on Animal Health Business Operations: A Legal Update Husch Blackwell LLP. March 5, 2015
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1 Spotlight on Animal Health Business Operations: A Legal Update Husch Blackwell LLP March 5, 2015 Environmental Compliance, Planning and Management Systems I. Introduction A. Manufacturers and distributors, their officers and their employees face a number of environmental compliance responsibilities and obligations B. The following provides a brief overview of those obligations that may impact the animal health industry and suggestions for development of an environmental management system (EMS) to identify, address and assure compliance C. This summary is limited to traditional environmental and general chemical regulatory programs and does not cover regulatory programs that regulate the testing and licensing of pharmaceuticals or veterinary devices II. Environmental Statutes and Regulations United States A. Most environmental regulatory programs are promulgated, implemented and enforced by a combination of Federal, State and local regulatory programs B. Often minimum regulatory program requirements are established by the US Environmental Protection Agency (EPA) and are primarily implemented and enforced by state, and is some limited cases local, regulatory agencies C. EPA retains oversight of permitting, regulatory development and enforcement activities by the states and local agencies and is generally authorized to initiate enforcement actions independent of enforcement action by a state or local agency D. Clean Air Act i. General 1. Regulates the emission of air pollutants under several broad programs 2. EPA establishes National Ambient Air Quality Standards (NAAQS) based on peer reviewed criteria for the protection of public health and welfare 3. The states are obligated to develop regulatory programs, including emission standards and permitting, that are designed to attain and maintain the NAAQS
2 4. Such state programs must be approved by the EPA and, when approved, become part of a State Implementation Plan (SIP) ii. National Emission Standards for Hazardous Air Pollutants 1. Original standards promulgated on pollutant by pollutant basis a. Asbestos standard applies to demolition and renovation activities b. Very few standards promulgated under this program 2. In 1990 Congress amended the statute to identify 189 hazardous air pollutants (HAPs) and direct EPA to promulgate standards for the maximum achievable control technologies (MACT) for various categories of sources that emit HAPs a. Pharmacueticals Production Standard i. Applies to manufacturing operations that manufacture a pharmaceutical product (generally SIC Codes 2833 and 2834); process, use or produce HAP; and are located at a plant site that is a major source of HAP emissions ( 10 tons per year of any HAP or 25 tons per year of all HAP in the aggregate) 1. New facilities 2. Existing facilities, including modification and reconstruction ii. Standards for storage tanks, process vents, equipment leaks, wastewater management iii. Includes requirements for monitoring, recordkeeping, reporting b. Other generalized standards may also apply; such as various standards for surface coating of plastic and other miscellaneous products iii. Title V Permitting 1. The 1990 amendments also implemented a new comprehensive operating permit program 2
3 2. Operating permits for major sources are now required that incorporate all applicable requirements at a permitted facility 3. Although the operating permit program was not intended to impose new substantive emission limits or standards, the new permit program requires periodic reporting of compliance status, permit deviations and responses to excess emissions arising from startup, shutdown and malfunction events 4. Operating permits have a 5 year terms and renewal application must be submitted at least 6 months prior to permit expiration in order to continue operations past expiration in the event the renewal permit is not issued on time E. Clean Water Act i. Establishes requirement for water quality standards, effluent limitations and permitting obligations for discharges to waters of the US 1. Discharge of process or sanitary wastewater to navigable waters requires a permit 2. Discharges of stormwater that require permitting are generally covered by general permits issued by state regulatory authorities 3. Some monitoring and reporting may be required depending on the nature of the discharge and the requirements in a particular general permit ii. Spill Prevention, Control and Countermeasures (SPCC) Planning 1. The SPCC rule provides requirements for oil spill prevention, preparedness, and response to prevent oil discharges to navigable waters F. Resource Conservation and Recovery Act (RCRA hazardous waste) i. Generator standards 1. All wastes must be characterized as hazardous or non hazardous 2. Hazardous waste cannot be stored on site for more than 90 days (with some very limited exceptions) without a RCRA permit 3
4 3. A number of standards apply to such storage, including standards for containers and tanks, waste management practices, labeling, recordkeeping and manifesting off site shipments of hazardous waste 4. Most significant non compliance risks are: a. Hazardous waste identification and characterization problems b. Failure to meet generator standards for temporary storage (e.g., labeling, container aisle space, recordkeeping, among others) ii. Avoid obligation to obtain RCRA permit 1. Management of hazardous waste in strict compliance with generator standards is necessary to avoid the need for obtaining a RCRA permit for treatment, storage or disposal 2. RCRA permitting requirements entail a number of onerous requirements, particularly the need to undertake a corrective action program to identify and remediate solid waste management units throughout a facility (e.g., former landfills, impoundments, leaking process sewers, past spill locations, and others) G. Emergency Planning & Community Right To Know Act (EPCRA) i. Release reporting 1. Releases of hazardous substances or extremely hazardous substances (as defined by regulation) in quantities that exceed a reportable quantity (RQ) in any 24 hour period must be immediately reported to various federal, state and local authorities 2. EPA position on immediate is within 15 minutes of discovery of the release 3. Often the actual amount released is not known within 15 minutes; therefore, general industry practice is to report releases of listed substances unless the amount released is reasonably known to be below an RQ ii. Toxic Release Inventory (TRI) reporting 1. Plants that manufacture, process or use listed chemicals in amounts that exceed regulatory thresholds must report releases of those 4
5 chemicals annually (including accidental and intended releases or discharges to air, land or water) H. Toxic Substances Control Act (TSCA) i. Applies to chemical substances and mixtures 1. Important exclusion for drugs or devices as defined in the Federal Food, Drug and Cosmetic Act when manufactured, processed or distributed in commerce for use as a drug or device 2. Raw materials, intermediates and products that are also manufactured, processed or distributed for other uses are subject to TSCA requirements ii. Import and export requirements 1. Imported chemicals and mixtures must be accompanied by either a positive certification that the shipment is subject to TSCA requirements and complies with those requirements or a negative certification that the shipment is not subject to TSCA regulation a. Drugs that are subject to the exclusion described above must be accompanied by a negative declaration b. Enforced by U.S. Customs and Border Protection 2. If a chemical that is subject to certain TSCA reporting, testing or similar requirements is exported, notification to EPA may be required prior to or upon export a. The export of drugs that are subject to the exclusion described above do not require notification iii. Reporting 1. Pursuant to the Chemical Data Reporting (CDR) regulations, manufacturers (including importers) are required to report to EPA information concerning the manufacturing, processing, and use of certain chemical substances listed on the TSCA Chemical Substance Inventory a. As with the import and export requirements, chemical substances and mixtures that are exclusively manufactured, 5
6 processed or distributed in commerce as a drug are not subject to the CDR regulations 2. The next reporting cycle will be in 2016 iv. Other Requirements 1. Testing 2. Screening of new chemicals or new uses of existing chemicals 3. Information collection and reporting I. Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) i. Regulates the manufacturing, distribution and sale of pesticides 1. Pesticides generally include any substance or mixture of substances intended for preventing, destroying, repelling or mitigating any pest 2. Fungi, bacteria, viruses or other microorganisms on or in living animals are not pests 3. Therefore, many any animal drugs are not regulated by FIFRA 4. Products for which a pesticidal action is claimed are generally regulated by FIFRA (e.g., a product that claims to minimize or prevent microbial growth in use) ii. FIFRA requirements include product registration and labeling, manufacturing establishment registration, recordkeeping, reporting III. Europe A. Generally similar requirements i. Notable exception wastewater typically regulated as a hazardous waste ii. New EU chemical regulatory directives are leading to increasing requirements imposed by the Company s customers for compliance certification with the directives B. Moving ahead of US in regulation of toxic chemicals i. Registration, Evaluation and Authorization of Chemicals (REACH) Directive places obligation on industry for the registration of chemical substances and demonstration that the manufacture and use of such substances are safe for human health and the environment 6
7 ii. Restriction of Hazardous Substances (RoHS) Directive restricts the use of six chemical substances in electrical and electronic equipment may apply to certain veterinary diagnostic or treatment devices 1. Lead, mercury, cadmium, chromium VI, polybrominated biphenyls (PBB) and polybrominated diphenyl ethers (PBDE) iii. Biopesticide Regulation 1. Similar to FIFRA requirements for antimicrobial products C. Moving ahead on product life cycle regulation i. Waste Electrical and Electronic Equipment (WEEE) Directive imposes for product registration; collection and disposition of WEEE; standards for treatment, recycling and disposal; and reporting D. By way of example, similar regulatory frameworks are established for veterinary medicinal products i. Directive on the Community Code Relating to Veterinary Medicinal Products 1. Establishes a centralized process for granting marketing authorization of veterinary medicinal products and rules for product supervision after authorization 2. Recent Annex to the Directive focused on the use of veterinary antibiotics that are important to human health in order to address development of resistance in bacteria ii. Regulation laying down Community Procedures for the Authorisation and Supervision of Medicinal Products for Human and Veterinary Use and Establishing a European Medicines Agency 1. Establishes procedures for the authorization, supervision and pharmacological review of human and veterinary medicinal products IV. China A. Increasing regulatory attention B. Generally regulated at local or regional level C. Often little consistency from region to region D. Domestic and foreign corporations regulated entirely differently V. Enforcement A. Process 7
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