--- title: Pharmacy Distribution of Controlled Substances description: Key requirements, documentation standards, and the Five Percent Rule for pharmacies distributing controlled substances to other registrants. --- [Skip to content](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-distribution-of-controlled-substances#main-content) English Show submenu for translations Montana Family Pharmacies Open main navigation Close main navigation - English Show submenu for translations - Contact us Contact us How can we help you? - There are no suggestions because the search field is empty. 1. [Regulatory and Compliance](https://kb.montanafamilypharmacies.com/reg-and-comp?hsLang=en) 2. [DEA Compliance Program](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en) 3. [Distributions and Losses](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#distributions-and-losses) April 4, 2026 # Pharmacy Distribution of Controlled Substances ## Pharmacy Distribution of Controlled Substances **RELATED LINKS**  For additional resources to support pharmacy controlled substance distribution and losses compliance click [HERE](https://members.montanafamilypharmacies.com/dea-compliance-program/).    **FULL ARTICLE:**  Pharmacies may distribute controlled substances to other authorized registrants under specific conditions. These activities must be carefully managed to ensure compliance with federal and state laws, maintain accurate records, and prevent diversion.    **The Five Percent Rule**  Pharmacies registered to dispense controlled substances may distribute limited quantities without registering as a distributor, provided they comply with the **Five Percent Rule**:  - The receiving entity (pharmacy or prescriber) must be properly registered under the Controlled Substances Act (CSA).   - The total number of controlled substance dosage units distributed must not exceed **5% of the total number of dosage units dispensed** by the pharmacy in a calendar year.   - Distribution of Schedule II controlled substances requires a **DEA Form 222**.   If a pharmacy exceeds or anticipates exceeding this 5% threshold, it must register with the DEA as a distributor.      **Common Distribution Scenarios**  Controlled substance distribution may occur in the following situations:  - **Pharmacy-to-pharmacy transfers**   - **Pharmacy-to-prescriber transfers** for the purpose of general dispensing to patients   All such distributions must comply with federal and state regulations.      **Documentation and Recordkeeping Requirements**  Accurate documentation is critical for all controlled substance distributions. Pharmacies must generate and maintain a detailed invoice or record for each transaction.  Each distribution record must include:  **Supplier and Purchaser Information**  - Name (as listed on DEA registration)   - Address (as listed on DEA registration)   - DEA registration number   **Controlled Substance Details**  - Drug name   - Dosage form (e.g., 10 mg tablet)   - National Drug Code (NDC)   - Number of dosage units (e.g., 100-count bottle)   - Number of containers distributed   Additional requirements:  - Schedule II distributions require a completed **DEA Form 222**   - All invoices and DEA Form 222 records must be maintained in a **readily retrievable manner for at least 2 years**       **Suspicious Orders Monitoring**  Pharmacies must remain vigilant in identifying suspicious orders, including unusual quantities or patterns of distribution.  - Any suspicious order must be reported through the **Suspicious Orders Reporting System (SORS)**   - For Schedule II distributions, DEA Form 222 records must be submitted to the DEA by the end of the month in which the transaction occurred       **Monitoring Compliance with the Five Percent Rule**  Ongoing tracking is essential to ensure compliance:  - Maintain a **monthly running total** of:   - Controlled substance units distributed   - Controlled substance units dispensed   - Use the following formula to calculate compliance:     Percent Distributed=(Units Distributed / Total Units Dispensed)×100     - If the percentage approaches **5%**, the pharmacy must:   - Immediately stop distributing controlled substances **OR**   - Register with the DEA as a distributor       **Best Practices**  - Regularly audit distribution records for accuracy and completeness   - Maintain organized, readily retrievable documentation   - Monitor distribution trends monthly   - Train staff on identifying and reporting suspicious orders   - Ensure compliance with both federal and state-specific requirements   Maintaining strict controls over controlled substance distribution helps protect the integrity of the supply chain and reduces the risk of diversion.    Disclaimer: These tools and templates are intended for general informational purposes and are provided by Montana Family Pharmacies as a service to pharmacies. While we try to keep the information timely and accurate, we make no guarantees. These tools and templates are not a substitute for legal, regulatory, or professional advice.  Policies and procedure, templates, checklists, and other tools should be customized to fit the specific needs and regulatory requirements of your pharmacy.  Montana Family Pharmacies disclaims any liability for any damages, losses, or other consequences arising from the use or reliance on the tools or policy templates.      - [DEA Compliance Program](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#main-content) - [DEA Readiness](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#dea-readiness) - [Licensing and Registration](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#licensing-and-registration) - [Safety and Security](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#safety-and-security) - [Ordering and Inventory](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#ordering-and-inventory) - [Prescriptions](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#prescriptions) - [Distributions and Losses](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#distributions-and-losses) - [Optional Programs](https://kb.montanafamilypharmacies.com/reg-and-comp/dea-compliance-program?hsLang=en#optional-programs) - [Hazardous Drug Program](https://kb.montanafamilypharmacies.com/reg-and-comp/hazardous-drug-program?hsLang=en#main-content) - [Hazardous Drugs and USP-800](https://kb.montanafamilypharmacies.com/reg-and-comp/hazardous-drug-program?hsLang=en#hazardous-drugs-and-usp-800) - [Wholesaler CSMP Guide](https://kb.montanafamilypharmacies.com/reg-and-comp/wholesaler-csmp-guide?hsLang=en#main-content) - [Navigating CSMP Audits](https://kb.montanafamilypharmacies.com/reg-and-comp/wholesaler-csmp-guide?hsLang=en#navigating-csmp-audits) - [Wholesaler Controlled Substances](https://kb.montanafamilypharmacies.com/reg-and-comp/wholesaler-csmp-guide?hsLang=en#wholesaler-controlled-substances) - [Wholesaler Injunctive Relief](https://kb.montanafamilypharmacies.com/reg-and-comp/wholesaler-csmp-guide?hsLang=en#wholesaler-injunctive-relief) - [Operations and Compliance Checklists](https://kb.montanafamilypharmacies.com/reg-and-comp/operations-and-compliance-checklists?hsLang=en#main-content) - [Ops & Compliance](https://kb.montanafamilypharmacies.com/reg-and-comp/operations-and-compliance-checklists?hsLang=en#ops-compliance) - [Pharmacy Daily Ops Program](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#main-content) - [Licensing, Legal, and Administrative](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#licensing-legal-and-administrative) - [Staffing, Supervision, and Access Control](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#staffing-supervision-and-access-control) - [Facility, Equipment and Environmental Controls](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#facility-equipment-and-environmental-controls) - [Inventory Management and Drug Handling](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#inventory-management-and-drug-handling) - [Procurement and Vendor Management](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#procurement-and-vendor-management) - [Pharmacy Systems and Patient Records](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#pharmacy-systems-and-patient-records) - [Prescription Intake and Processing](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#prescription-intake-and-processing) - [Dispensing, Labeling, and Clinical Review](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#dispensing-labeling-and-clinical-review) - [Patient Interaction and Services](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#patient-interaction-and-services) - [Workflow Exceptions and Prescription Adjustments](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#workflow-exceptions-and-prescription-adjustments) - [Special Sales and Packaging](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#special-sales-and-packaging) - [Daily Operations and Continuous Compliance](https://kb.montanafamilypharmacies.com/reg-and-comp/pharmacy-daily-ops-program?hsLang=en#daily-operations-and-continuous-compliance) # Montana Family Pharmacies [mailto:email@email.com](mailto:email@email.com) Copyright © 2026, Montana Family Pharmacies