Drug disposal is a huge problem - last year the federal government passed the Safe Drug Disposal act which set guidelines for safe and responsible medication disposal.
Basically the best environmental disposal method is incineration, but that is expensive which is why pharmacies are starting to refuse to accept old unused medication.
The rationale behind mixing meds in kitty litter or coffee grounds was to discourage someone finding it in the garbage and diverting it for illegal use. But as noted, those methods still end up in the landfill to eventually end up in the water table.
I think it the next couple of years companies will set up an economical and responsible methods for collection and disposal, but right now your best bet is law enforcement collection days and your pharmacy (if they will accept it).
I am astonished that any doctor would accept meds from a patient to give to someone else - that is illegal!!