The Hidden Challenges of Diversion in Retail Pharmacies

Controlled substance diversion is a persistent and costly issue in healthcare, with most of the focus traditionally placed on inpatient hospital settings. However, hospital-owned retail pharmacies (HRPs) present a unique set of vulnerabilities that can expose health systems to significant compliance risks and financial penalties if not properly addressed. As hospital-owned retail pharmacies take on bigger roles in care continuity, it has become integral for pharmacy leaders to understand and address these challenges. 

These pharmacies handle high volumes of controlled substances, often without the same level of automation and monitoring found in inpatient environments. As regulatory bodies like the DEA increase their scrutiny, organizations must ensure robust diversion prevention strategies are in place across every care setting.

The Scale of the Problem

The numbers below highlight the significant operational and financial risks associated with diversion in outpatient pharmacy settings:

These statistics emphasize the urgent need for health systems to implement comprehensive oversight. Let’s explore the specific operational and compliance challenges that make hospital-owned retail pharmacies particularly susceptible to diversion.

Key Challenges in Retail Pharmacy Diversion

1. Manual Processes

Retail pharmacies often lack the robust security measures of inpatient settings. While Schedule II drugs are locked up, Schedule III–V medications are often stored on open shelves, accessible to all staff. Space constraints in retrofitted hospital pharmacies make secure storage and monitoring even harder. Without automated systems, manual counts and checks are prone to errors, making it tough to spot discrepancies.

2. Inconsistent Reconciliation Practices

Pharmacy management systems (PMS) vary widely in capabilities and often don’t integrate with electronic medical records. Even with standardized systems, workflows like inventory tracking and handling expired meds differ across locations. Many pharmacies rely on manual reconciliation, which is time-consuming and error-prone, leaving gaps in controlled substance monitoring.

3. Staffing Challenges

Small teams in retail pharmacies handle high prescription volumes while managing patient care. Pharmacists often juggle multiple roles, leaving little time for inventory oversight. High turnover and limited training further complicate efforts to separate duties like ordering and inventory management, increasing the risk of diversion.

4. Growing Clinical Responsibilities

Hospital-owned retail pharmacies are expanding their roles, from managing specialty therapies to running “Meds to Beds” programs that ensure patients have their prescriptions before discharge. While these initiatives improve care, they also increase the volume of controlled substances dispensed, adding pressure to already strained operations and amplifying vulnerabilities.

Strengthen Your Diversion Prevention Strategy

Hospital and health system leaders who oversee retail pharmacy operations must hold these locations to the same rigorous diversion prevention and compliance standards as inpatient settings. By understanding the unique challenges hospital-owned retail pharmacies face, you can begin to build a more effective and comprehensive oversight strategy.To learn more about practical strategies and recommendations for protecting your retail pharmacies, check out our white paper “Preventing Drug Diversion in Hospital-Owned Retail Pharmacies.” This resource provides actionable steps for strengthening diversion monitoring, improving accountability, and ensuring compliance across your entire organization.