Responding to Controlled Substance Loss or Theft

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For additional resources to support pharmacy controlled substance distribution and losses compliance click HERE. 

FULL ARTICLE 

Controlled substance losses and thefts present serious legal, regulatory, and patient safety risks. Prompt identification, thorough investigation, and accurate reporting are critical to maintaining compliance and preventing diversion. 

Understanding Significant Loss 

Regulations do not provide a strict definition of “significant loss,” so pharmacies must use professional judgment when evaluating discrepancies. 

Factors to Consider: 

• Quantity lost relative to pharmacy volume  
• Type of controlled substance (high-risk/diversion potential)  
• Access points (staff access, workflow vulnerabilities)  
• Patterns of loss:  
  • Repeated small discrepancies over time  
  • Random vs. consistent occurrences  
• Whether a reasonable explanation exists  
• Local trends or indicators of diversion  

When in doubt, err on the side of caution and treat the situation as significant. 

Immediate Reporting of Discrepancies 

All pharmacy staff are responsible for: 

• Reporting any inventory discrepancies immediately to the pharmacist  

If a loss or theft is suspected: 

• Escalate internally to appropriate leadership (e.g., Pharmacist-in-Charge, compliance personnel, ownership)  
• Begin an internal investigation without delay  

Internal Investigation Process 

An initial investigation should be conducted promptly and may include: 

• Performing a full or targeted physical inventory  
• Reviewing:  
  • Purchase invoices  
  • Prescription records  
  • Returns and reverse distribution records  
• Examining security footage  
• Interviewing staff members  

Documentation: 

• Record all findings, timelines, and actions taken  
• Maintain clear, detailed investigation notes  

Required External Notifications 

If a theft or significant loss is confirmed (or suspected): 

Notify within 1 business day: 

• DEA Diversion Field Office (written notification)  
• Maintain a copy of the written notification with pharmacy records 

Also notify as required: 

• State Board of Pharmacy  
• Local law enforcement  

If uncertainty exists about whether the loss is significant: 

• Report anyway and continue investigating  

If later determined not to be a loss or theft: 

• Notify the DEA in writing with explanation  
• Maintain documentation supporting the conclusion  

DEA Form 106: Reporting Theft or Significant Loss 

DEA Form 106 is required to formally document theft or significant loss. 

Key Requirements: 

• Submit electronically within 45 days of discovery  
• Retain a copy for at least 2 years  
• Follow all applicable state regulations  

Information Included: 

• Pharmacy name, address, and DEA number  
• Date of theft or discovery  
• Local law enforcement contact information  
• Type of theft (e.g., burglary, robbery)  
• A list of missing substances, including:  
  • Drug name  
  • Strength and dosage form  
  • Container size  
  • NDC  

Handling Non-Significant Losses 

If a loss is determined not significant: 

• Follow all state specific regulations  
• Do not file DEA Form 106  
• Still document thoroughly, including:  
  • Date of loss or discovery  
  • Drug details (name, strength, NDC)  
  • Quantity lost  
  • Investigation findings  
  • Plausible explanation  

Note: 

• Clerical errors or miscounts should be corrected and documented but not reported via DEA Form 106  

Inventory Adjustments 

• Only a pharmacist should adjust:  
  • Pharmacy management system balances  
  • Perpetual inventory records  

All adjustments must be: 

• Accurate  
• Timely  
• Fully documented  

In-Transit Losses 

• If a shipment is lost before receipt:  
  • The supplier (e.g., wholesaler) is responsible for reporting  
  • Notify the supplier immediately  
• If the pharmacy has signed for and accepted delivery:  
  • The pharmacy assumes responsibility for reporting the loss  

Best Practices for Prevention & Compliance 

• Reconcile inventory regularly  
• Monitor for patterns or recurring discrepancies  
• Maintain strong internal controls and access restrictions  
• Train staff to recognize and report issues promptly  
• Document everything—even minor discrepancies  

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.