The vast majority of Pharmacies are dispensing controlled substances in compliance with the DEA and State Regulations. However, we regularly hear about a Pharmacy, prescriber, wholesaler, or manufacturer in the news breaking those regulations and trying to circumvent public safety for profit. Now that the COVID-19 pandemic is winding down [fingers crossed], we are once again starting to see a focus on the public health emergency of drug addiction and abuse. Here at PRS, we get questions from Pharmacy Owners about what they should do to ensure their Pharmacy is appropriately receiving, handling, storing, dispensing, and training employees related to controlled substances. In this blog, we will go over some of the items Pharmacies should be doing. This blog is not meant to be a complete manual on Controlled Substances in the Pharmacy, but we will cover just those areas we receive the most questions and concerns.

Power of Attorney

We will assume that you have already obtained your DEA Permit. The next step is to get a power of attorney with the pharmacists that will be signing for and ordering controlled substances. And remember, the power of attorney must also be revoked upon the termination of a Pharmacist or when their duties will no longer include signing for and ordering controlled substances. You will also need to ensure your Pharmacists have received a Controlled Substance Order System (CSOS) Signing Certificate, which permits them to sign for ordering controlled substances via CSOS electronically.


When the Pharmacy receives controlled substances, the Pharmacist must verify their receipt and sign and date the invoice confirming receipt. The Pharmacist must also update any perpetual inventories with the receipt of the controlled substance. For ease of access, and as required by some states, your invoices should be split into the following three-tier system for Medication and filed separately:

  1. C-II
  2. C-III through C-V
  3. Non-Scheduled

This may require you to work with your wholesaler to have them split the invoices if they are not already doing so.


The DEA requires all Pharmacies to conduct an inventory of their controlled substances upon the initial receipt of the first controlled substances order, and then at least biennially (every two years) after that. However, many states require the inventories to be conducted more frequently than every two years. There may also be differences in what products need to be inventoried. For example, California requires Schedule II controlled substances to be counted quarterly, but all other DEA controlled substances are still counted biennially. California also requires that the Pharmacy compare the inventory totals with the expected total based on purchases and dispensing.

Inventories will also need to occur if there is a change in the Pharmacist-in-Charge or ownership.

Reporting Thefts and Losses

What about thefts and losses of Controlled Substances? If you have a theft or loss of a controlled substance, you must report the loss to the DEA via the DEA Form 106. The Form can be completed online using Theft/Loss Reporting Online (TLR), or you can complete and send Form 106 (paper version) to your Local Diversion Field Office. In most events, you will also be required to report the theft or loss to your State Board of Pharmacy. If the loss resulted from theft, you should report the theft to local law enforcement.

Red Flags

Pharmacies and their employees need to be aware of Red Flags and ensure their front-line employees are trained on Red Flags to protect controlled substances. Red Flags are signs that a controlled drug may be used for diversion or abuse. We will briefly cover some of the red flags related to doctors, prescriptions, and patients:

Red Flag AreaExamples
  • The Prescriber writes significantly more prescriptions (or in larger quantities) compared to other practitioners in the area
  • The Prescriber writes prescriptions for antagonistic drugs, such as depressants and stimulants, at the same time
  • The Prescriber is writing prescriptions in patterns, same drugs, and quantities
  • Groups of patients appear with similar prescriptions from the same Prescriber
  • Numerous strangers suddenly show up with prescriptions from the same physician
  • Cocktail order of an opiate, benzodiazepine, and muscle relaxer
  • Legitimate prescription pads may be stolen from physicians’ offices and later written for fictitious patients.
  • A patient may alter the physician’s legitimate prescription.
  • A patient may have prescription pads from a legitimate doctor; however, they may have them printed with a different call-back number, which may be answered by an accomplice attempting to verify the illicit prescription.
  • A patient may call in a prescription and then give their telephone number for call-back confirmation
  • A Patient may create and print prescriptions for nonexistent doctors or to copy legitimate doctors’ prescriptions.
  • The prescription looks too good; the Prescriber’s handwriting is too legible
  • Quantities, directions, or dosages differ from usual medical usage
  • Prescription looks to have been rejected by another Pharmacy
  • The patient appears to be returning too frequently
  • Drug abusers often request prescriptions for “uppers and downers” at the same time
  • A patient appears presenting prescriptions written in the names of other people
  • A patient frequently claims loss of controlled substance prescriptions
  • The patient always pays cash and often requests brand name products
  • Patient fluctuates between cash and insurance
  • The patient has multiple controlled prescriptions from multiple prescribers
  • The patient is not from your normal practice area


Your employees need to be trained on all relevant aspects of your controlled drug compliance program, including recognizing Red Flags. The training should cover ordering, receiving, inventory, filling, dispensing, returning, and disposal of controlled drugs. Your employees need to know their responsibilities, and when something seems out of sorts, they need to speak up and let you know.

How can PRS Help?

The PRS Controlled Drug and Red Flag Program (REDFLAGTrack) is designed to ensure that Pharmacies are doing their part to prevent diversion and comply with the DEA requirements for protecting and controlling access to controlled drugs.

To learn more about the PRS Controlled Drug and Red Flag Program, please visit the Controlled Drug and Red Flag page, or you can give us a call at 1-800-338-3688.