What Happened
Savage Family Pharmacy in Waynesboro, Pennsylvania agreed to pay $180,480 in civil penalties after the DEA alleged the pharmacy failed to comply with Controlled Substances Act recordkeeping and monitoring requirements between 2015 and 2019.
According to the government's allegations, the pharmacy did not adequately monitor its employees' conduct and failed to keep complete, accurate inventories and dispensing records for Schedule II controlled substances including oxycodone and hydrocodone. Incoming and dispensed inventory counts were altered, inventories were never reconciled against the pharmacy's perpetual log, and pages of that log were removed — allegedly by an employee who was diverting the drugs. As a result, tens of thousands of doses went unaccounted for and were potentially diverted. The civil investigation was triggered by a documented act of employee theft of controlled substances at the pharmacy in May 2019.
The settlement, announced in June 2020, resolved the pharmacy's independent obligation under the CSA to maintain systems adequate to prevent theft and fraudulent inventory practices. The pharmacy has since instituted a process for reconciling inventories against its perpetual log.
What Went Wrong
- Inventories were never reconciled against dispensing records. Even when counts were performed, they weren't checked against the perpetual log that should have tracked every unit in and out.
- Log pages were physically removed to hide shortages. An employee was able to erase evidence of missing drugs simply by tearing pages out of the paper log, with no backup or audit trail to catch it.
- Altered counts went unnoticed for years. Both incoming inventory and dispensed-count records were allegedly falsified over an extended period without triggering internal review.
How It Could Have Been Prevented
- Reconcile physical or electronic inventory counts against the perpetual log on a fixed schedule, not only when a discrepancy is suspected.
- Use tamper-evident or electronic logging for controlled-substance records so pages cannot simply be removed to conceal shortages.
- Require a second employee to independently verify inventory counts and log entries for Schedule II substances.
- Conduct unannounced spot audits of controlled-substance inventory as a standard compliance practice, not only after a reported theft.
Related Guidance
- Community Pharmacy Self-Assessment Checklist — Inventory and recordkeeping controls for retail pharmacies.
- Regulatory Guide — DEA recordkeeping and inventory obligations under the CSA.
- 15 Red Flags of Drug Diversion — Indicators including inventory discrepancies and altered records.
- Diversion Case Registry — Related pharmacy recordkeeping settlements.