DEA Form 106 and Loss of Controlled Substances

US Pharm. 2015;40(12):43-45.

Upon discovery of a theft or significant loss of controlled substances, a pharmacy must report the loss in writing to the area Drug Enforcement Administration (DEA) field office on DEA Form 106 (FIGURE 1) either electronically or manually within one business day.^1,2 This seemingly simple directive is fraught with vagueness, opening it to interpretation and controversy (at least to lawyers), leading many a community and hospital pharmacy astray when it comes to reporting activity.

Reporting Thefts and Losses

Important questions to consider include: what is a “significant loss,” when does “upon discovery” begin, how long does the pharmacy have until the report is required, and what exactly is a “loss”? These and other inquiries were addressed in a 2005 rulemaking discussion. Pharmacists who are responsible for managing controlled substances inventories should be familiar with these regulations.³

The rule addresses the theft or loss of controlled substances. Obviously, this would apply to any diversion (of a significant nature) irrespective of the source of the loss or theft. Burglary, robbery, and employee theft are probably the most common types of illegal diversion. Inventory shrinkage from unintentionally dropped or otherwise unusable drugs may be another source of loss that a pharmacy may experience. Note also that all thefts, whether significant or not, must be reported. Only a “significant loss” is reportable.³

As to how long the pharmacy has to make the report, the rule discussion is clear: one business day. This means that the pharmacy has to fill out the DEA Form 106 within 24 hours of the discovery of the loss. The pharmacy may have to provide the DEA with updated information as it uncovers the source or cause of the loss for up to 2 months after the initial report. Updates also have to be in writing and submitted either electronically or manually.³

One day to make a report may be burdensome for some practitioners, but this reflects the DEA’s expectation that pharmacies will exercise tight controls over controlled substances inventories. As one commentator noted, “Another challenge providers and pharmacies have to face as a result of the short reporting window is that it may not be possible to determine within one business day whether a loss was, in fact, a theft. If the loss was a theft, then under the DEA’s regulations, it is reportable whether significant or not and local authorities generally should be notified to investigate the incident.”⁴

As a general operational guide, when a pharmacy is unable to determine whether a loss was a theft in one business day, a report of loss should be filed. Recognizing that the facts and circumstances of apparent thefts and losses can vary a great deal, the DEA has said that when in doubt, registrants should err on the side of notifying the appropriate law enforcement authorities, including the DEA, of thefts and losses of controlled substances.⁵ As such, it is a good rule of thumb for providers and pharmacies to be conservative in their approach to reporting in cases where controlled substances are missing and the significance or theft may be unclear.

The “upon discovery” portion of the rule means that the pharmacy needs to make a reportable loss once it has made a good-faith effort to learn that a loss has occurred. The discussion of the discovery requirement states that the “DEA has always viewed ‘upon discovery’ to mean that notification should occur immediately and without delay. The purpose of immediate notification is to provide an opportunity for DEA, state, or local participation in the investigative process when warranted and to create a record that the theft or significant loss was properly reported. It also alerts law enforcement personnel to more broadly based circumstances or patterns of which the individual registrant may be unaware. This notification is considered part of a good-faith effort on the part of the regulated industries to maintain effective controls against the diversion of controlled substances…. Lack of prompt notification could prevent effective investigation and prosecution of individuals involved in the diversion of controlled substances.”³

What Is Considered a Significant Loss?

The part of the rule that has generated the most controversy is the “significant loss” wording. What is significant to a single local corner drugstore may be very different from that of a major metropolitan healthcare system. “The rule itself provides guidance on how to quantify this mandate. When determining whether a loss is significant, a registrant should consider, among others, the following factors:

1) The actual quantity of controlled substances lost in relation to the type of business;
2) The specific controlled substances lost;
3) Whether the loss of the controlled substances can be associated with access to those controlled substances by specific individuals, or whether the loss can be attributed to unique activities that may take place involving the controlled substances;
4) A pattern of losses over a specific time period, whether the losses appear to be random, and the results of efforts taken to resolve the losses; and, if known,
5) Whether the specific controlled substances are likely candidates for diversion; and
6) Local trends and other indicators of the diversion potential of the missing controlled substance.”¹

It should be noted that this list is inclusive, not exclusive, meaning that other factors may be taken into account where appropriate. For example, the DEA has stated that the “loss by a pharmacy of a 100-count bottle of controlled substance tablets would be viewed as significant, whereas the same loss by a full line distributor may be viewed differently.”⁴ In another example, the DEA posited, “the repeated loss of small quantities of controlled substances over a period of time may indicate a significant aggregate problem triggering reporting even where the quantity lost in each occurrence, by itself, is not significant.”⁴ In other words, the loss of two or three tablets of oxycodone per day in a small pharmacy may go unnoticed or be insubstantial, but if this goes on for 3 or 4 weeks, with a net loss of 50 to 80 tablets, a problem with employee theft may be occurring.

Other factors to consider are the pharmacy’s overall sales history for controlled substances, so as to identify trends. Large increases could signal theft by employees or invalid prescriptions.⁴

Take note that all thefts or losses must be reported “in writing.” Telephone calls discussing losses will not protect the pharmacy from sanctions for failing to report. As stated by the DEA, “DEA controlled substance registrants are strongly encouraged to complete and submit the DEA Form 106 online.”² Note that only a DEA-registered pharmacy is allowed to utilize Form 106. The National Drug Code (NDC) for each controlled substance drug reported lost or stolen must be used on this form. It is also important to note that state laws may require the pharmacy to make reports to the Board of Pharmacy or other regulatory agency. This is in addition to, and not in lieu of, reporting to the DEA.

Examples of Diversion

As for examples of losses of controlled substances that may not seem significant, consider a very large metropolitan healthcare system where hundreds of thousands, if not millions, of doses of controlled substances medications are dispensed on an individual basis over the course of a year. Is the loss of 16,000 pills significant? This real-life example was discovered only after the death of a 29-year-old nurse and an overdose by a 32-year-old anesthesiology resident occurred in a single day at the University of Michigan Hospital System.⁶ Both were found in hospital restrooms.⁷ Eight cases of stolen controlled substances drugs were reported in 2014. However, no controlled substances losses were reported in two prior years by this same organization. Another large healthcare system located just a few miles away also failed to report any drug loss or theft during the same period of time when losses did, in fact, occur.⁶ The DEA is investigating both healthcare systems.

The Mayo Clinic has been involved in efforts to prevent the controlled substances drug diversion from the workplace and to rapidly identify and respond when such diversion is detected.⁸ These efforts have found that diversion of controlled substances is not uncommon and can result in substantial risk not only to the individual who is diverting the drugs but also to patients, coworkers, and employers. The study showed that in the United States, nearly 4 billion retail prescriptions were filled in 2010, with sales totaling $307 billion. The opioid hydrocodone combined with acetaminophen was the drug prescribed most frequently (131.2 million times). Although most of these sales resulted in the legitimate administration of medications to patients, a fraction of the agents prescribed are diverted for illicit purposes. These researchers found that although a relatively small portion of the nation’s drug supply is administered in a healthcare facility such as a hospital or outpatient surgery center, the nature of these practices provides ample opportunity for drug diversion.⁸

Outside of the pharmacy, theft can be of unopened vials; syringes or vials that have been tampered with, resulting in either substituted or diluted dosages being administered to the patient; or residual drug left in a syringe or vial after only a fraction of the drug that has been signed out was actually administered to the patient. This theft can also be of discarded syringes or ampules that have been properly disposed of in a sharps safety container.⁸

Studies have shown that 10% to 15% of all physicians develop a substance abuse problem in their lifetime, while 6% to 8% of nurses have used controlled substances in a sufficient enough quantity to impair professional performance.⁹ The drug abuse rate among pharmacists is twice that of general society.¹⁰ One study reported that 46% of pharmacists and 62% of pharmacy students have used a prescription drug without having obtained a prescription.¹¹ In addition, 20% of pharmacists surveyed reported they had used a prescription drug without a prescription at least five times or more in their lives.¹¹

Then there are the pharmacy technicians and other healthcare support personnel. In Maine alone, from 2003-2013, 41 pharmacy technicians lost their licenses for pilfering drugs from pharmacy shelves or even from the patients whose prescriptions they filled.¹² It stands to reason that some of the drugs used to sustain their drug habits come from the theft of controlled substances from pharmacy inventories. One study showed that about 45% of all controlled substances drug losses are from employee theft.¹²

Discussion

The loss of controlled substances from employee theft of small quantities at any one time makes it all the more difficult for pharmacy supervisors to determine not only that a loss has occurred but the source of the loss as well. Unless the pharmacy is doing daily or weekly inventories of controlled substances, it may be nearly impossible to tell whether a loss has occurred or if the loss is significant. In large-scale pharmacies, ongoing daily or weekly counts of controlled substances may be necessary to determine if there are significant losses or patterns of losses that are occurring.

When a pharmacy discovers that controlled substances losses have likely occurred, the best practice is to fill out a DEA Form 106 and send it in electronically or manually. Waiting too long can result in DEA investigations and, perhaps, sanctions for not timely notifying the DEA that a loss or theft has taken place.

REFERENCES

1. 21 CFR §1301.76(b).
2. Theft or loss of controlled substances—DEA Form 106. www.deadiversion.usdoj.gov/21cfr_reports/theft/index.html. Accessed November 10, 2015.
3. DEA. Reports by registrants of theft or significant loss of controlled substances. 21 CFR Part 1301. Final rule. August 12, 2005. www.deadiversion.usdoj.gov/fed_regs/rules/2005/fr0812.htm. Accessed November 6, 2015.
4. Reporting thefts and losses of controlled substances for providers and pharmacies. Lexology. September 28, 2012. www.lexology.com/library/detail.aspx?g=f3ce9368-7853-481f-a00d-f6ad80505f19. Accessed November 6, 2015.
5. DEA. Reports by registrants of theft or significant loss of controlled substances. 21 CFR Part 1301. Proposed rule. July 8, 2003. www.deadiversion.usdoj.gov/fed_regs/rules/2003/fr0708.htm. Accessed November 6, 2015.
6. Counts J. Drug thefts at U-M hospital: a nurse’s death, a doctor’s overdose and 16,000 missing pills. MLive. October 26, 2014. www.mlive.com/news/ann-arbor/index.ssf/2014/10/drug_thefts_at_u-m_hospital_a.html. Accessed November 10, 2015.
7. Doctor nearly dies of an overdose from drugs stolen at UM hospital. Washtenaw Watchdogs. March 18, 2014. www.washtenawwatchdogs.com/doctor-nearly-dies-of-an-overdose-from-drugs-stolen-at-um-hospital/doctor-nearly-dies-of-an-overdose-from-drugs-stolen-at-um-hospital. Accessed November 8, 2015.
8. Berge KH, Dillon KR, Sikkink KM, et al. Diversion of drugs within health care facilities, a multiple-victim crime: patterns of diversion, scope, consequences, detection, and prevention. Mayo Clin Proc. 2012;87(7):674-682. www.ncbi.nlm.nih.gov/pmc/articles/PMC3538481/. Accessed November 12, 2015.
9. Bittinger A, Abramowitz LH. Health care diversion. American Health Lawyers Association. https://www.healthlawyers.org/Events/Programs/Materials/Documents/PHLI14/t_abramowitz_bittinger.pdf. Accessed November 10, 2015.
10. Sochoka J. Pharmacist drug abuse. Pharmacy Times. January 17, 2013. www.pharmacytimes.com/blogs/piller-of-the-community/0113/pharmacist-drug-abuse. Accessed November 10, 2015.
11. Combs J. Pharmacists get addicted, too. Drug Topics. June 1, 2009. http://drugtopics.modernmedicine.com/drug-topics/news/modernmedicine/modern-medicine-now/pharmacists-get-addicted-too. Accessed November 10, 2015.
12. Schalit N, Christie J. Behind the pharmacy counter: the unseen drug theft problem. Pine Tree Watchdog. September 4, 2013. http://pinetreewatchdog.org/behind-the-pharmacy-counter-the-unseen-drug-theft-problem/. Accessed November 10, 2015.

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