HomePublicationsInsightsImpacts of Decree 10.388 on reverse medication logistics

Impacts of Decree 10.388 on reverse medication logistics


After 10 years of discussion, on June 5, 2020, the decree nº 10.388, which institutes the reverse logistics system for expired or unused medicines and their packaging after disposal by consumers. The document includes all pharmaceutical industry supply chain, impacting manufacturers, importers, distributors and consumers, according to the terms of Decree No. 7.404 of 2010. The measure aims to reduce damage to the environment, as each kilogram dumped incorrectly can contaminate up to 450 liters of water, according to the Preservometer, responsible for measure the results of Interfarma's Reverse Logistics Plan (Research Pharmaceutical Industry Association).
reverse medicine logistics - ILOS Insights

Figure – After 10 years of discussion, a decree on the reverse logistics of medicines is signed. Photo: Pexels

If companies in the pharmaceutical sector were already suffering losses in relation to the cost of losing the product (amount spent on its manufacture, packaging and distribution), since the reverse logistics of this sector does not allow the reallocation and resale of medicines due to their chemical and biological characteristics , the application of this decree may bring some other financial impacts to pharmaceutical companies. The first one would be related to the transport costs, necessary to return the items from the collection points to the factories. In addition, it is necessary to consider the amounts spent on both labor and the final destination of these materials, which can be by incineration, by co-processors or by Class I sanitary landfills, as determined by the decree. These costs, if not controlled, can lead to a decrease in pharmaceutical companies' profit margins.

Prior to its signature, there was no sectoral agreement valid throughout the country on this subject, but some measures were already being followed. In São Paulo, for example, the installed factories must, by 2021, reach the goal of 3,03 kg of medicines per collection point and have 80% of municipalities with more than 100 thousand inhabitants with at least one delivery point for each 20 inhabitants, with the risk of non-renewal or non-issuance of environmental licenses if not complied with. Together, another project that took place in parallel was the Conscious Disposal Program, by Brasil Health Service (BHS), which collected and correctly disposed of 500 tons in 10 years of operation (until June 2019), being the largest medication collection project expired or in disuse in Brazil.

The decree establishes its application in 2 phases. In the first of these, which started on the day the document becomes effective, performance groups will be set up, responsible for implementing reverse logistics systems and structuring monitoring systems through annual reports on the volume of drugs returned and disposed of in an environmentally correct manner. In the second phase, which should start 120 days after the conclusion of the first phase, service providers, communication plans and the installation of fixed collection points in pharmacies and drugstores will be enabled, in which consumers will be responsible for disposing.

Pharmaceutical market entities, such as the Brazilian Association of Distribution and Logistics of Pharmaceutical Products (Abrandilan), showed support for this measure, considered an important step towards taking care of the urban environmental agenda. According to the executive president of the Associação Brasileira do Atacado Farmacêutico (Abafarma), Oscar Yazbek Filho, a technically and economically viable solution was reached, which renders the best gains for the environment. According to him, the model is efficient, as the medicine must follow the same path taken to reach the final destination, reducing the impacts on the environment. It was a joint effort by the entities to mitigate the impacts caused by the original proposal.

 

References:

http://www.planalto.gov.br/ccivil_03/_Ato2019-2022/2020/Decreto/D10388.htm

https://www.newcastlesys.com/blog/the-hidden-costs-of-reverse-logistics#:~:text=In%20addition%20to%20providing%20a,company’s%20bottom%20line%20as%20well.

https://pfarma.com.br/noticia-setor-farmaceutico/mercado/5707-logistica-reversa-medicamentos.html

https://panoramafarmaceutico.com.br/2020/06/09/decreto-de-logistica-reversa-e-publicado-e-bhs-celebra-500-toneladas-de-medicamentos-ja-coletados/

https://panoramafarmaceutico.com.br/2019/09/05/logistica-reversa-de-medicamentos-e-oportunidade-para-varejo-prestar-servico-a-consumidor/

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