Solving The Problem of Safe Medication Disposal with Jason Sundby

April 8, 2021

Jason Sundby has over 30 years of experience in operations, risk management, administration and IT leadership. He is CEO of Minneapolis-based Verde Environmental Technologies, Inc., creator of the Deterra Drug Deactivation and Disposal System and a privately-owned company committed to developing research-based scientifically proven solutions to reduce drug abuse, misuse, and negative environmental impact.

Sundby is a founding partner of Atlas Capital Partners, a venture capital firm investing in companies that are post-revenue, on the verge of rapid growth, and possessing a defensible competitive advantage. Prior to Atlas, Sundby was vice president of corporate administration at Regis Corporation and director of risk management for the Star Tribune.

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John: Welcome to another edition of the Impact Podcast. This is a very special edition of the Impact Podcast. I have got with us today, Jason Sundby. He is the CEO and the chairman of the board of Verde Environmental Technologies Inc. They have got a great product he is going to be talking about today. Welcome to the Impact, Jason.

Jason Sundby: Thank you, John. I appreciate you having me on.

John: Jason, before we get talking about what you are doing at Deterra Systems and at Verde Environmental, I want you to first share a bit of your background leading up to this leadership role in the very important work that you are doing right now.

Jason: Well, I appreciate the opportunity to speak with you. My career is long and varied. I started out in the newspaper business and my first job was an environmental analyst. One of my ultimate goals was to work with all of our production folks to reduce the amount of hazardous chemicals that it takes to put out a newspaper. We did that. We went from a large quantity generator of hazardous waste to a conditionally exempt generator. We went from oil-based petroleum based inks to soy-based inks. And so, that is where I kind of started. My employer at the time, I went to the University of Minnesota for undergraduate, and I think they didn’t think I was smart enough, so they sent me off to school again. They sent me to the Harvard School of Public Health. So I came back. That helped me a lot, obviously in that role as an environmental analyst and subsequent roles that I grew into.

Jason: They still didn’t think I was all that smart, so they sent me off to Wharton for a little while. Then I came back from that and I think at that point they decided okay, it is not taking hold so no more education for this guy. So, I worked in the newspaper business for 23 years. I worked in a Fortune 300 company for a dozen years as the Head of Corporate Administration. I left there and formed a small private equity firm called Atlas Capital Partners with five other partners. We invested in a company called Verde Environmental Technologies. It was one of our very first investments and we saw a lot of potential for this. The company itself was started by two very smart chemist and a doctor of pharmacology. So I took a position on the board and about three years later the shareholders and other board members asked if I would take over the leadership role and take on the responsibility of being a CEO. A year later I took on the chairmanship as well. It has been a great ride. It is very easy to get out of bed in the morning when the company you are leading has a mission like we do.

John: You were kind enough to send me in. For our listeners out there that want to learn more about what we are about to talk about, Deterra Systems, which these are just two examples you were kind enough to send me these. We are going to get into this in a second. You could go to www.deterrasystem.com. I have the website up in front of me. Talk a little bit about first the problem that you were solving. When you invested in this company, you are investing because you are solving one of the biggest problems we have, environmentally speaking, in America. Talk a little bit about that first.

Jason: Yeah, you know, it is really a two-fold problem with unused and unwanted pharmaceuticals. People hang on to them. I have seen one study that shows 70% of the four billion prescriptions that are given out every year 70% remain unused. Some portion of them remain unused. A large portion of those are opioids and abusable drugs. So when we set out on this path, it was really for abuse deterrent. That is the “deter” part of Deterra. And the environmental protection piece, the “terra” part of Deterra. So, we were really trying to help. One of the tools, this is not panacea, but it is one of the tools that we can use to really prevent abuse, misuse, addiction, overdose, and death with abusable painkillers and benzos. And because there have been found to be over a 140 different pharmaceutical compounds in our lakes, rivers, streams, and in our drinking water, we needed to work on that. We needed to work on those two big societal problems.

Jason: One thing we are really proud of is that it is a tool that is being used for those two purposes, but we did not want to help with those two big problems by throwing yet another plastic bag on the trashy. Our product renders the drugs inert. They are irretrievable. They can not reach out. But the plastic material that we use is actually made out of a sustainable crop. It is made out of sugar cane, so it has a really low carbon footprint. So as the sugar cane grows in the field, it absorbs the carbon dioxide in the air. So it is part of that cleansing process. It is then turned into resin and used to make the film for these pouches. So, not only is it sustainable in a prop perspective, but it is also made in a manufacturing plant down in Texas that runs on nothing but wind power. And they use a process that reduces the amount of ink that they need to print on this and to clean that up. So it really is a very green product, as green as we can make it today. It is I’m Green certified, USDA Biobased certified, all of those things. Just to give you how long we were looking for this type of film material. We have 13 U.S. issued patents and 33 international patents, and it took us longer to find this green pouch material than it did to get those patents issued. Anybody that has dealt with patents knows it is a long process.

John: A long time. Let us go back and go over the journeys. When you add Atlas and you have Atlas, when did you guys make your first investment and realize these chemists had come up with this good solution, sustainable solution to this very big problem?

Jason: Yeah. The company itself has been around since 2011. We invested early in 2012. We took the Series A. We have been in it from the beginning and it really struck us. Part of our investment thesis is to invest in companies and products that are going to leave the world a little better place than when we found it. So we were five partners that had some success in our careers. But one of the things we wanted to do is not just provide financial support but help grow the company. That is why we would take board positions and be somewhat internal consultants and help them grow and think about things that maybe chemists and pharmacologists don’t think about. You know, marketing plans and things like that.

John: Capital plus wisdom.

Jason: Well, hopefully it is an equal part. I am not quite sure. But yeah, it really worked out well for us in our portfolio. We have a number of companies like this, but this is really the one that we believe has some huge growth potential. Moreover, it is very mission driven. We are trying to save lives and trying to save the environment, and we will do well while we are doing good. How was that?

John: I got it. And so when you invest it, how long from time in investment to launch of the product actually?

Jason: So actually the product itself when it first came out one of the products that they had made was like fentanyl patches and it looked like a big band-aid with a pad in the middle that had carbon woven into it. So you would take this used fentanyl patch, put it on that pad of carbon, pull off the release liner folded over, and it was called CONTRAPATCH. And then early on we realized that actually putting this carbon in a pouch would do the same thing with the patch and it would also do it with pills, patches, liquids, sublingual films, creams, pretty much any form factor. So we really moved away from CONTRAPATCH and went towards. The product was first launched as Medsaway. That product, the pouch product, was actually developed under a two-phase contract with the National Institute on Drug Abuse, part of NIH. So it is a three-party contract. It was NIDA. It was Verde Environmental Technologies. And it was Mercer University’s College of Pharmacy. We would test different types of activated carbon with different pharmaceutical compound, psychoactive pharmaceutical compounds. We would do testing. Mercer University would do testing. We would send in those results to NIDA, and of course they would validate all of that. So that was phase one was to prove the Science. And that is easy. I mean, that is kind of Chemistry 101 early on, right?

John: Okay.

Jason: The second part was great. You know what? We know the science works. We know you can destroy these drugs. We know that they can render them inert. But are people going to use it? So we did usability survey for our NIDA contract and we distributed through pharmacies actually in the state of Delaware. We handed these out, kind of co-dispensed as it were and we will talk about that too. But co-dispensed these pouches to a certain group of people and asked them to do a survey, and we got a great response on the survey. It was in the 20-plus percent range, which is a great response for a survey. And what we found was 96% of those people used it and had no problem using it. So it was ease of use. We had one person that said, “What do I do with the carbon inside?” So we adjusted our instructions and said leave the carbon in. And then we found that an additional 96% of those people used it within four weeks and of those 47% used it within 24 hours, which tells you two things. They do use it and they had unused and unwanted drugs already in their medicine chest if they were to be able to use it within 24 hours of being given a new prescription.

Jason: So all of this being said, the product itself, the science itself has been proven and all of that information, all of our test results, our survey data, we also had multiple, I think we are up to five or six right now, independent studies written up either in JAMA Surgery, JAMA Pediatrics, Mayo Clinic has done a study on it, and those all hang out on our website. We are really proud of our science. And that is the big differentiator between us and other competitors is that we will show you our science. We will show it to you anytime.

John: Your transparency is second to none. For our listeners and viewers who just joined us, we have got Jason Sundby. He is the CEO and Chairman of the Deterra. You can find a Deterra System at www.deterrasystem.com. Drug activation system. So when did you actually go to market? Was it a B2B first or B2C first or both?

Jason: It is actually mainly a B2C and a B2G, so business to government. We started down the consumer path but realized that in the midst of this opioid crisis, trying to get consumer awareness of not only a new product but a new market or that nobody has really talked about deactivated and destroying their unused drugs, it is like trying to boil the ocean. And in the middle of that crisis, you needed to boil the ocean in 15 minutes. So, we followed it back to who are the people that are impacted the most by this crisis. Well, that is payers. That is the healthcare systems, the pharmaceutical manufacturers, the distributors, everyone in that healthcare side. We really looked at and sell to anybody that touches pharmaceuticals. From those manufacturers, distributors, healthcare systems, and I can get into a little more information on that if you would like. Down to pharmacies, to law enforcement, and then ultimately the people that help clean this problem up on the back end. The coalitions and the folks that are trying to end this problem.

Jason: So we have sold into every one of those market segments. We sold at Mallinckrodt Pharmaceuticals. I have just give you a few marquee names. We have sold on the distributor side. We sold to AmerisourceBergen. We sold to Cardinal Health and McKesson. On the healthcare side, we sold to Cigna and Express Scripts, Mayo Clinic. We have sold to Cleveland Clinic all the way down to our partners with the National Hospice and Palliative Care Organization. They use it for end-of-life. We have sold into big pharmacies, regional pharmacies. We have sold to the DEA. We are endorsed by the DEA Educational Foundation and by CADCA, the Community Anti-Drug Coalitions of America. We are really proud of this. We are endorsed by those two CADCA and DEA Educational Foundation. We are endorsed by letter from them where the only product, both have been in existence for about 30 years, and we are the only product of any type, of any kind. They do not even endorse pencils, but we are the only product they have ever endorsed in there exists. And so, we are really proud of those partnerships. They are on the frontline.

John: Jason, you launched about when? A year ago?

Jason: We rebranded to Deterra in 2015.

John: Okay.

Jason: It was when we really started the growth and we had exponential growth ever since then. It has gone from being a low 6-digit company to being in the 8-digit companies. We are a private company, so I don’t divulge all that information.

John: Right.

Jason: We have done that in five years. I am really proud of that.

John: You are not only highly educated and have a tremendous career behind you, but you are an entrepreneur at heart as well beside an investor. So, if this specific journey was a baseball game, are we in the top of the second inning or the bottom of the sixth? Where are we right now?

Jason: Well, as far as accomplishing our mission of getting unused and unwanted drugs out of people’s homes, we are leading off of first.

John: First. Got it. We are on the top of the first. Okay.

Jason: We are at the top of the first. I mean, we have sold enough product now. If used a capacity to a deactivated over, I believe the last number I saw was over 600 million dose of units.

John: Let us talk about it. You sell this to someone and they take it at home with them or comes to their yards.

Jason: Yeah, it is delivered to them and given to them.

John: Right. How does it work? Explain, like I would rip the top open and what do I do?

Jason: Absolutely. I have one as well.

John: Good.

Jason: That is it. If you look at the back, there are three really easy steps.

John: It seems so easy.

Jason: Inside this pouch is a certain amount and kind of activated carbon in a water soluble pod. So think like a dishwasher in detergent pod. You open it up. You add pills, patches, liquids, all the form factors we have talked about, capsules. You fill it halfway full with warm tap water. That opens up that pod of carbon and it dissolves the pills in the capsules. You leave it open for about 20 seconds for the air to come out of the carbon. It is extremely porous. You zip it closed. It has got a double zip lock device on the top. You shake it a couple of times and throw it in the household trash. And again, through that process of adsorption, the molecule of the drug is bound onto the surface of the carbon. It is an electrical bond and it can not be back extracted. It can not be broken. You can not wash it out. So it won’t leach out in a landfill. It is unabusable and irretrievable at that point. Again, with the green pouch that we use, it really is an environmentally friendly way of getting rid of your unused drugs.

John: Given that we are in the top of the first inning, which is just amazing and wonderful at the same time. Do you also have dreams and visions with your board and with your team to take this to Asia, South America, Europe, and other parts of the world? I assume this problem is viewed around the world.

Jason: It is, and that is a really good question. We already sell in some parts of the world. You have to remember, 80% of the pharmaceutical, 80% of the opioids that are prescribed in the world is in the U.S.

John: Oh, that is discouraging.

Jason: We don’t like pain here. We are pain averse, I guess, is the nomenclature. So, we wanted to start in our country, start in the US, and grow up from there. We are having conversations in Canada. We have shipped to Guam. We have shipped to Germany. And a lot of it is through the DOD. The DOD generates unused drugs. And those laws in Europe and certainly on Guam are very strict about what you can do with them. And so, it is easier to ship our product there and deactivate them on the spot than it is to ship them the unused drugs back here and try and deal with it differently here. So yes, our vision is global, without a doubt.

John: I know you have the Gone for Good campaign and the SAFE Project that is coming up in April. Talk a little bit about those for our listeners and our viewers, Jason, please.

Jason: Yeah. SAFE Project is a great group. They are not for profit. They were founded by Sandy and Mary Winnefeld. Sandy was a four-star admiral. He was the Vice Chair of the Joint Chiefs of Staff. Sandy and Mary unfortunately lost their son to an opioid overdose. He had gone through treatment a number of times. They believed he was clean and on the right path. They dropped him off at College. Three days later they got a call and parent’s worst nightmare, finding out that their son died. But he started with opioid painkillers and move down that path. Once he couldn’t get those anymore, it moved on to harder drugs. But a very smart kid. And again, if this can happen to that family, it can happen to anybody’s family, and it does. So, they form SAFE Project. We formed a partnership with them. They run the Gone for Good campaign, and we have done two iterations of it now in 2020 and we are coming up on April again where people go to their website and they will put in their address and we will mail them in a pouch. Actually, I have got one right here. I am never too far from these, by the way. It is, you can tell. So we will mail this out. It is a pouch with some educational material on SAFE Project and it will go straight to your home.

John: Well, that is wonderful.

Jason: Yeah, they are great folks to work with.

John: And in April, you also have the RX Drug and Heroin Summit. Can you talk a little bit about that as well?

Jason: Right. We have been participating in that for about 6 years. This year we are sponsoring a panel discussion. We have a number of really, really good people that have great experience. So just so I can get this right, I am going to read this off. The presentation, the panel discussion, is called Opioid Abuse Starts at Home: How an At-Home Drug Deactivation and Disposal Campaign Can Effectively Fight the Crisis in Your Community. The panel is made up of our partners, people that have done this work and have handed out Deterra. So the University of Houston, Community for New Direction in Columbus, Ohio, CADCA, again, the Community Anti-Drug Coalitions of America. It is moderated by the Honorable Mary Bono. People might recognize that name. Mary was a 15-year Congressperson from California. She is on our advisory board and she is also the chairman of the board of CADCA.

John: Oh, that is wonderful. Yeah.

Jason: That will be a good one for your listeners if they are interested to tune into.

John: Yeah, that is wonderful. That is an extraordinary Summit. We will make sure that is up on our website when we post the show. Jason, we are coming out of this COVID-19 tragic worldwide pandemic. From all the people that you know in business, government, healthcare, law enforcement, has there been an upraise during this very anxious and difficult period in opioid use which then means there is a greater need even for your product more than ever before?

Jason: Absolutely. And again, it is another very unfortunate statistic. During this pandemic, what do we ask people to do? You know, shelter and place. Go home. We are not sure whether they are going to have a job or how that jobs going to work. They have got kids at home that they are trying to teach and fulfill their responsibilities at work. And so, it leads to some despair and a loss of hope. They are very uncertain about the future. And what do people do when they have despair? They look for outlets. They self-medicate. Some people go to the liquor cabinet. A lot of people go to the medicine chest. And those unused and unwanted opioids that are sitting in there are really easy target not only for the people in your home, but for the people that come into your home. So this last kind of rolling 12 months, the number of opioid overdose deaths has risen from 70,000 in 2019. This last 12 months it is up somewhere around 82,000. And it looks like it is going higher than that. So the importance of getting these drugs out of your home has never been more important or timely than it is right now.

John: Jason, is it going to come in date soon? Like out here in California, we have Rite Aid and CVS and Walgreens. Will I be able to go into any of those great brands and just find this on the shelves there soon?

Jason: Yeah, one of the things that we are really working on and there is some really good legislature in a few States, but it is the idea of co-dispensing. We have examples. Mayo Clinic in a few of their facilities is actually co-dispense Deterra. Twin City Orthopedics, which is the fifth largest Orthopedic Surgery Group in the country, co-dispenses and has for about four or five years. But basically the idea is if you are given a script for an opioid, in that dispensing bag at the pharmacy, your little white bag, it would go with Deterra. And I will paraphrase what they say, but it is a little educational card that says, “Look, you have been prescribed a very powerful painkiller. Take them until you can handle the pain with an unsaid Advil Tylenol. And if you have leftover drugs, please use this Deterra pouch to deactivate and dispose of those drugs. Get them out of your home and out of the environment.”

Jason: That has really worked quite well for both of those groups. There is legislation talking about co-dispensing now. And if you think about it, it is kind of like diabetic supplies. So if we want, a diabetic gets insulin or their medication. In that same bag goes testing strips, lancets, things like that. So it is co-dispensing, and it is easily done. So again, I am more of a proponent of people being handed this free of charge and I am agnostic as to who pays for it. There is a lot of money in that. So pharmaceutical distributor, pharmacy supply chain, and I don’t choose sides. All I know is that if we really want to have an effect on the opioid crisis and the pollution of unused drugs, it needs to get into people’s hands and it needs to happen today. So, we are making great progress. We have already seen a couple of State Attorney Generals, other officials, actually take these products and distribute them throughout their State. So they have handed out Deterra. I don’t know if you can see this. My very clever marketing people took my business card and turn it into a label to show that these can be labeled. Anybody can put their name on it. And so, these Attorney General, that was their seal and distributed by on that pouch.

John: Smart. Hey, you know from a business perspective, do you have any competition? Because I have never heard of any competition out there. I have never seen it and heard of it when I was studying for this interview. I couldn’t find any. Is there anything that is really comparable to your great product?

Jason: Well, there are competitors. I will go out so far as to say they are not comparable. Again, we deactivate and destroy the drug. We render it inert. There are competitors out there that suspend it in a gel-like material, but it doesn’t destroy the drug. It just makes it a little less attractive. It is somewhat easily defeated. There are others that actually even use carbon in their process, which they know that we hold the patent rights to that right. But typically they don’t use the right amount and kind of carbon. They actually deactivate the drug. So yes, there are. Because all of these are private companies and there is no way to really try, we believe we have about 80% of the market share.

John: That is great. You know Jason, this has been amazing. You really are solving a huge problem. I am so grateful for your time today and thanks for sending these samples. They will go to good use with our family members and also employees. For our listeners out there, to find and order this very important product, you can go to www.deterrasystem.com. Jason, any final words before we say goodbye just for today?

Jason: No. John, I really appreciate you having me on. This is a very important and timely topic, and we need to get the word out. With your help, we will do that. I want everyone to make it through this pandemic and get back to their lives. If we can prevent people from becoming addicted to abusable drugs and keep these out of our drinking water, that is our mission and that is what we are going to keep working towards.

John: Well, you are winning the mission. And since we are in the top of the first inning of you running this great company, you are always invited back to share the continued journey and success story of the Deterra. You are making a huge impact and that is why I invited you on, Jason. Your company is making huge impact and you are succeeding in your goal as you said at the top of the show to making the world a better place. And for that, I am so grateful. Thank you so much.

Jason: Thank you. I appreciate that. Thanks, John.

John: Thank you.

Jason: Take care.

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