The EPA’s effort to simplify pharmaceutical waste management could unintentionally obscure the hazards that the waste poses to companies accepting expired and returned drugs for disposal.

The Environmental Protection Agency is hoping to reduce the amount of hazardous pharmaceuticals that end up in water bodies by regulating the industries that handle them.

A new regulation (RIN:2050-AG39), which goes into effect Aug. 21, affects health-care facilities, retail stores, and reverse distributors that handle pharmaceuticals that qualify as hazardous waste.

Reverse distributors receive unwanted, returned, or unusable products and may return them to their manufacturers or dispose of them,...