Narcotic Reconciliation and Security


Published: August 2012

Legislative References:

Additional References:

College Contact: Pharmacy Practice


The theft and diversion of controlled substances has been steadily on the rise and there is evidence that the misuse of prescription drugs is a factor in other violent and non-violent crimes. Greater awareness concerning security has been elevated at all levels of the distribution chain from the manufacturer to the pharmacy. The Narcotic Control Regulations (NCR) places the responsibility on the pharmacist to protect the narcotics in their possession; therefore, narcotic security should be a priority with every pharmacist and pharmacy owner. Where a pharmacist is shown to be negligent or careless in the management and protection of narcotics inventory, he or she is at risk of losing their narcotic privileges from Health Canada, and/or of being the subject of a College Investigation.

Narcotic Security:

Narcotic Control Regulations
42. A pharmacist shall report to the Minister any loss or theft of a narcotic within 10 days of his discovery thereof.
43. A pharmacist shall take all reasonable steps that are necessary to protect narcotics on his premises or under his control against loss or theft.

Although the regulations require pharmacists to take all reasonable steps to protect the narcotics under their control, the regulations do not define what is considered reasonable. Unlike other specific requirements for purchase and sales records, general security is left open to interpretation. A pharmacist must consider a number of issues when developing policies and procedures to meet the requirements of the NCR. Narcotic security is not just about placing narcotics in a safe or locked cabinet. Narcotics can be lost through forgeries, diversion, damages, miscounts or theft, both external and internal. Pharmacists and designated managers are expected to be familiar with and have in place policies and procedures to monitor and prevent narcotic losses.

In planning the security of narcotics, the pharmacist should consider a number of factors, including, for example, the basic layout of the premises, the procedures that have been implemented to track narcotic inventory, and the systems in place to hire and screen prospective new staff. The pharmacist should be able to demonstrate what precautions have been taken to ensure that narcotics are not easily accessible by anyone entering the premises. For example, in the event that the security of the pharmacy has been breached or compromised, it would be reasonable for a registrant to demonstrate that they implemented more stringent security measures or sought assistance from police or security companies. Additional recommendations are provided below.

Physical Security:

What to Consider:

  • Incidence of drug abuse/crime in the area;
  • Accessibility by public to the dispensing area or drugs;
  • Visibility of narcotic storage on shelves or lock-ups;
  • Staffing to ensure that dispensary area is not left unattended; and
  • Control of any keys required for access to narcotics or pharmacy;
  • Pharmacy hours of operation (ie. limit active inventory if open late or 24 hours

No one method of security is better than any other and there are a variety of methods that could be utilized including dispersing the storage of narcotics across the inventory, utilizing a locked cupboard and/or, installing a large safe. Whichever method or combination of methods is used, the pharmacist is required to implement systems and procedures to ensure proper control of the inventory and to protect against losses.

For additional information, please contact your local police services or refer to the
Guidelines for Ensuring the Safety and Security of you and your Staff in the Pharmacy from the Ontario Pharmacists’ Association. This is located under Tools & Forms in the members section of the OPA website.

Narcotic Sales Report

Narcotic Control Regulations

    • 38. Where, pursuant to a written order or prescription, a pharmacist dispenses a narcotic, other than dextropropoxyphene or a verbal prescription narcotic, the pharmacist shall forthwith enter in a book, register or other record maintained for such purposes


    • (a) the name and address of the person named in the order or prescription;


    • (b) the name, quantity and form of the narcotic;


    • (c) the name, initials and address of the practitioner who issued the order or prescription;


    • (d) the name or initials of the pharmacist who sold or provided the narcotic;


    • (e) the date on which the narcotic was sold or provided; and


    (f) the number assigned to the order or prescription.

The Narcotic Sales Report is an important tool for curbing diversion and theft, when used and reviewed appropriately. The report should be cross checked against the narcotic prescriptions file to ensure that:

  • all reportable narcotics and controlled drugs are properly recorded, i.e., software is up to date;
  • all prescriptions are accounted for, i.e., no prescriptions are missing;
  • all narcotics and controlled drugs requiring a written prescription are accounted for and the prescriptions are valid; and
  • any unusual patterns of drug usage are identified and investigated if necessary.

It is important that Narcotic Sales Reports are accurate, as they need to be aligned to both inventory counts and reconciliations.

Narcotic Sales Reports should be checked regularly or spot checked depending on the practice. Pharmacies with high staff turnover, large part-time staffs, or rotating staff should review the reports more often.

For additional information on the recording of purchases of controlled substances, refer to the fact sheet on
Narcotic Purchase Records.

Managing Narcotic Inventory

The legislation does not specify that a pharmacist is required to maintain a narcotics inventory count; however, it is implied through the requirement that a pharmacist protect the narcotics under his or her control. Simply counting narcotics is not sufficient to protect the inventory, as an inventory count is simply a record of the amount of the stock that is present in a pharmacy at a given time. For a narcotic inventory count to be useful, it must be used as a starting point to enable narcotic reconciliations which will, in turn, pinpoint any shortages


It is recommended that narcotic inventory counts are done on a regular basis at minimum every six months with complete reconciliation (see below), in conjunction with random reconciliations on narcotics that have a high risk of diversion. The count should not be conducted by the same person who enters narcotic purchases into the purchase records. The introduction of perpetual inventory management systems in pharmacy software packages provides useful tools for facilitating the reconciliation process; however, many of these are still open to human error. When used, these systems should be reconciled against an actual physical count. Perpetual inventory counts alone should never be used for reconciliation purposes.


Additionally, inventories and reconciliations should be completed any time there is a:

  • change of ownership;
  • change of DM;
  • change in pharmacy staff;
  • theft or robbery; or
  • any event that creates concern that the security of drugs may have been compromised.
Narcotic Reconciliations:

Designated Manager – Medication Procurement and Inventory Management Policy states that:

The DM directs that a physical count and reconciliation of all narcotics, controlled drugs and targeted substances is conducted regularly, at least once every six months.

Reconciliations are done to validate that the inventory count on hand is accurate and that the pharmacist has met their obligation to protect or secure the narcotics as required by s.43 of the NCR. A narcotic reconciliation is a detailed audit of the quantity of a drug purchased and dispensed, compared with the current stock on hand to determine whether there are any losses or overages. The narcotic reconciliation can help identify a problem in dispensing processes or inventory control.

A narcotic reconciliation can only be done where there is a validated starting inventory and good record keeping processes which include retaining purchase records, filing prescriptions and maintaining narcotic sales reports. When all the systems and procedures are in place and inventories are done on a regular basis, reconciliations can be done relatively easily. Where systems are not in place, reconciliations can be time consuming.

Narcotic Reconciliation Process Narcotic Reconciliation Process

  • Starting Inventory: Begin with the validated inventory from the previous reconciliation (validation means that the inventory was reconciled — see below);
  • Add Purchases: Add all purchases from wholesalers and manufacturers, include any amounts purchased for emergency use from other pharmacies;
  • Deduct Sales or Prescriptions Dispensed: Deduct the number of tablets (capsules, ml., etc.) dispensed since the last inventory; include any amounts sold for emergency use to other pharmacies;
  • Expected inventory on hand: this refers to the inventory amount that is expected to be on hand based on the starting count, purchases and sales over a specific time period ;
  • Actual inventory on hand: i.e. actual physical inventory count
  • Reconciliation: Review of the actual and expected inventory on hand; further investigation would be required to reconcile any difference between the actual and expected inventory on hand

The reconciliation will determine whether the amount of stock on hand is what is expected. If the reconciliation does not match, it is necessary to determine the cause and take steps to address the issue. Once the reconciliation is complete, the amount of stock identified and validated becomes the new starting inventory. If the inventory on hand doesn’t match the expected inventory, the inventory on hand becomes the starting inventory for the next scheduled reconciliation. Any shortages must be reported to the
Office of Controlled Substances within 10 days. The pharmacy should maintain the documentation showing adjustments to the reconciliation for their own records especially where discrepancies are found and cannot be accounted for.

Problem Solving: Shortages or Overages
  • Ensure all purchases (invoices or emergency orders from other pharmacies) are accounted for;
  • Determine whether the shortage is a result of a balance owing — check the balance owing file;
  • Determine whether there is an error in record keeping when dispensing, i.e. switched brand, but the DIN was not changed on the record of dispensing;
  • Run a DIN report to check that all prescriptions for that drug are accounted for;
  • Ensure that all credits, returns or drugs awaiting authorization for destruction are accounted for;
  • Account for drugs used in compounds;
  • In the case of overages, determine whether they have occurred because completed prescriptions were not picked up and the drugs were subsequently returned to stock without reversing the transaction or claim;
  • Look for patterns of false claims where the claims were processed but drugs were never dispensed or purchased; and
  • If the pharmacy borrows or lends drugs from or to other pharmacies (not recommended), that all the drugs are accounted for.

Most shortages or overages can be accounted for; however, when large amounts of a drug are missing, the owner or DM may want to notify the police and if the pharmacy belongs to a chain, the head office should be contacted as per pharmacy policy. Large quantities of missing narcotics are usually associated with an internal theft or diversion problem. Similarly, overages may be an indication of poor record keeping processes or false billings. Where large quantities are involved, the DM or owner should begin by reviewing all systems and procedures including ordering, receiving, storage, and final dispensing of the drug.