If you have chlorinated water, that will kill any bacteria growing on the sand. You're also rinsing it to dislodge any detritus that may be stuck in it as well. I'm also pretty certain that it won't absorb any chemicals or medications, so you should be safe there as well.
In my experience, the only issue I've heard about regarding medications that had a residual effect on tank inhabitants was using copper based treatments, which are toxic to invertebrates. This is why enthusiasts who keep reef tanks are leery about buying used aquariums because the copper can be absorbed by the silicone used to seal the aquarium.
