Healthcare Buildings / Operations/Management

Understanding Hazardous, Pharmaceutical and Medical Waste Risk

April 1, 2012

Green facilities management requires the effective handling of hazardous and non-hazardous waste. Every building manager has to have a plan for dealing with

John Kelsey

inevitable hazardous, flammable, corrosive, unstable and/or poisonous materials. This may include cleaning materials, pesticides, lead-based paints, lubricants and solvents, fluorescent light bulbs — the list goes on. For healthcare building managers and commercial building managers who have healthcare tenants, the list of hazardous materials extends to medical and pharmaceutical wastes.

This article is designed to raise awareness among commercial real estate managers by providing some background on pharmaceutical waste management to help them understand the proper design and deployment of waste collection systems that will keep their buildings safe and avoid regulatory problems. The article also touches on the impact that these types of tenants should have on lease agreements.

Who’s Responsible?

Healthcare facility operators have direct responsibility for the safe handling, management and disposal of pharmaceutical, medical and bio-hazard wastes, compressed gases, and even nuclear medical wastes and other byproducts. Commercial building managers who have healthcare tenants, including clinics, laboratories and doctors’ offices, have indirect responsibility in the event that a tenant fails to meet regulations and/or endangers other building tenants or visitors.

Landlords must rely on their healthcare tenants to implement well-designed collection systems, supported by training and efficient waste-handling procedures that comply with myriad federal, state and local regulations that govern pharmaceutical wastes. It is important that all parties understand the risks and set proper procedures to avoid the financial and public relations liabilities of poorly implemented programs.

Generally, the larger the organization the more likely it is to have a comprehensive management and disposal program. A remote lab that is legally affiliated with a hospital or major clinic will likely have a waste management program that is designed and administered by the parent organization. Because of the complexity of the problem, many medical and healthcare facilities turn to third-party providers that specialize in waste management. Regardless of the tenant’s sophistication, it pays to have a basic understanding of the issues.

Clinics turn to specialized service providers to manage, collect and properly dispose of medical wastes. Services often include collection system design and staff training.


An Alphabet Soup of Regulators and Regulations

Hazardous wastes, including wastes that are routinely generated during the normal operation of a commercial building, are controlled by the U.S. Environmental Protection Agency (EPA) under the Resource Conservation and Recovery Act (RCRA). RCRA lays out specific handling and disposal rules for each type of material. The Department of Transportation (DOT) regulates the movement of the materials as an inbound product and outbound from the generator’s site to the disposal facility.

For medical and pharmaceutical wastes it is much more complex. In addition to the EPA and DOT, the Food and Drug Administration (FDA), Office of National Drug Control Policy (ONDCP), Drug Enforcement Agency (DEA), and U.S. Fish and Wildlife Service (USFWS) also may have regulatory authority. State and local regulations, which can be different or even more stringent than the federal rules, have also been put in place in many jurisdictions. In many states, the State Board of Pharmacy or Department of Health will have regulatory authority. In almost every local community, the materials being sewered need to be communicated and approved by the local Public Owned Treatment Operator.

For a listing of U.S. and Canadian federal hazardous waste information resources, as well as state and provincial regulatory websites, visit


Basic Pharmaceutical Waste Management Practices

As with all hazardous wastes, pharmaceutical collection systems often include satellite storage areas (SSAs) that are located near to where the waste is generated and a main storage area (MSA) where the wastes from the SSAs are consolidated and packed for shipment to a disposal facility. In most small locations the process is simplified, and only an MSA is utilized.

However, for medical and pharmaceutical wastes the process is understandably more complex. For starters, unlike standard industrial hazardous collection points that are in locked storage areas and accessible only to authorized personnel, pharmaceutical storage areas are often placed in examination rooms and other semi-public areas. They must be secure. The simplest solution is to have the MSA in a locked room where only a few employees have access.

Also, waste management is not the primary responsibility of frontline healthcare personnel; they are concentrating on medical services and not waste management, so the process must be simple and well-integrated into the service delivery process. But, because of the nature of the wastes, medical facilities typically have different types of wastes that are governed by specific rules that require separate handling procedures. This complicates the disposal process for staff.

A typical medical facility requires several separate collection systems for different waste streams:

  •           Sharps*
  •           Biohazards*
  •           EPA RCRA hazardous
  •           Recyclables
  •           Non-regulated trash
  •           Sewer

(*Sharps and biohazards are often combined at smaller sites.)

Although it is not the landlord’s responsibility to audit for compliance, it is his or her responsibility to make sure that regulated waste is not discarded through the building’s regular trash removal system.


Effective Leases Minimize Risk

Commercial leases typically include provisions that prohibit the use and storage of hazardous or regulated materials without the consent of the landlord. A lease covering a healthcare tenant must note the exception and attempt to specify, to the extent possible, the permitted use and handling of materials. It must also stipulate that the materials are used and stored in compliance with applicable laws.

The lease should also detail that the healthcare tenant is responsible for the removal and disposal of its own medical wastes and that wastes are to be stored within the leased space at all times and never in an unsecured hallway, storage room, loading dock or other common area. Landlords should reserve the right to remove the medical wastes and bill the tenant for the costs of removal if the tenant fails to properly manage the wastes.

Indemnification provisions should also be included that assign liability for a tenant’s failure to meet the medical waste disposal lease provisions; and language should be included to cover the potential abandonment of medical wastes at lease termination. Depending on the materials that the tenant uses, such as radioactive medicine, there may also be business interruption risks for other tenants that should be addressed in the lease.

It is important to note that indemnification is limited by the tenant’s ability to pay the removal costs. Security deposits may be able to be used for minor cleanups, but beyond that the building owner could be saddled with the removal (and in some cases, remediation) costs under local, state and federal regulations.

It is clear that these last four paragraphs have one message: The landlord’s attorney must develop a custom healthcare lease document that addresses all of the risks for each tenant. Neglecting to address all of the issues exposes the building owner to considerable liability.

 Healthcare offices, clinics and labs can be great tenants, but they do present challenges and risks that are different from regular commercial tenants. It is important to have an understanding of the services that they will offer as well as the technologies, medical supplies and chemicals that they will be using. Look for tenants that have a track record and an established process for safely procuring, storing, using and disposing of the materials that they will consume in the course of their business.  

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