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Inventory Management, Independent Pharmacies

Navigating Regulatory Compliance with Datarithm

Datarithm Team March 27 2024

As you well know, pharmacies are highly regulated, with stringent requirements aimed at safeguarding the integrity of medications and ensuring patient safety. These regulations can be incredibly challenging to stay on top of—especially for independent pharmacies who already have so much on their plate. After all, your compliance obligations cover nearly every aspect of your operations, from drug ordering and inventory management to transfer and disposal, and there are significant ramifications to any misstep or shortcomings revealed by an audit, investigation, or complaint. All this to say that attention to detail is critical to compliance and it pays to be proactive.

pharmacy regulations

The regulatory landscape presents specific challenges for independent pharmacies, including:

1. Complex Requirements

In particular, the DSCSA (Drug Supply Chain Security Act) introduces complex serialization and verification requirements that can be challenging for pharmacies to implement manually. 

2. Record-Keeping

Pharmacies must maintain extensive records related to the receipt, distribution, and dispensing of pharmaceutical products, including transaction information, transaction history, and transaction statements. 

3. Risk of Penalties

Non-compliance can result in significant penalties, including fines and potential criminal liability. Compliance is not optional; it's a legal requirement. 

4. Patient Safety

Ensuring compliance is not only about adhering to regulations but also about safeguarding patient safety by preventing counterfeit or harmful medications from reaching patients. 

Fortunately, technology can help your pharmacy tremendously. By investing in effective inventory management technology, you can transform your ability to take on compliance challenges, automate compliance processes, and benefit from real-time monitoring and reporting.  

regulatory compliance independent pharmacy

In Compliance, It Pays to Be Proactive 

Regulations are constantly evolving to keep up with changes in the market, technology, and new methods of theft, fraud, and deception. This can make staying on top of the compliance requirements themselves a full-time job, not to mention ensuring your staff is educated and prepared as well.

One proactive measure you can take is to assign a compliance officer, whether it’s yourself or another responsible staff member. This person should be familiar with every part of your pharmacy’s operations, but also have the time available to assess ongoing compliance requirements, risks, and needs. Understandably, this may be a tall order so you can also consider appointing a small compliance committee that meets regularly—quarterly, if not monthly. Another benefit to appointing a compliance officer or committee is that it demonstrates to federal agencies how seriously you take your compliance work. 

Part of this work should also include regular internal audits, along with documented policies and procedures for steps your pharmacy will take in the event of a compliance violation, whether actual or suspected.  

Ongoing, comprehensive training for pharmacy technicians and staff is essential too. It’s important here to lead with the importance of compliance—patient safety—so your entire team is engaged with that as their priority. This training should be tailored to each staff member or technician's role, and they should be required to certify their completion of training each time.  

The Far-Reaching Scope of Pharmacy Regulations

As we mentioned above, regulations touch every aspect of your pharmacy’s operations. In particular, inventory management is inextricably linked with compliance. A few of the areas you must be diligent in maintaining compliance include: 

Prescription Drug Ordering:

Each time you place a medication order, it must be done through the DEA Form 222 and you must also be able to confirm you’re ordering legitimate medications through legitimate sources. To stay compliant, your pharmacy must keep careful documentation of not only every single order you’ve placed, but every shipment you’ve received as well.

Transfer and Disposal Compliance:

Transfers and disposals are a crucial piece to inventory management, and you must have well-documented processes and policies in place to ensure you’re meeting compliance requirements as you carry these out.

Prescription Fraud and Drug Security:

You’re required to maintain robust monitoring and processes to both identify and prevent prescription fraud, as well as to ensure security measures that prevent the theft of drugs. This applies not only to the medications you have on hand in your inventory, but those in transit as well.

Pharmacy Benefit Manager (PMB) Compliance:

If your pharmacy works with PMBs, you must stay compliant with them for contractual obligations and to avoid civil liability, as well as to avoid federal scrutiny for insurance fraud.

DSCSA Compliance:

One of the critical regulations that pharmacies must adhere to is the Drug Supply Chain Security Act (DSCSA). The Drug Supply Chain Security Act (DSCSA) is a federal law in the United States designed to enhance the security of the pharmaceutical supply chain. It was enacted to address concerns about counterfeit and potentially harmful medications entering the supply chain. Key provisions of the DSCSA include: 

  • Serialization: Manufacturers are required to place unique identifiers, including product serial numbers, on each unit of medication. This allows for traceability throughout the supply chain.

  • Verification: Wholesale distributors and dispensers (including pharmacies) must verify the authenticity of pharmaceutical products before dispensing them to patients.

  • Tracing: The DSCSA mandates that pharmaceutical products can be traced back to their manufacturer, helping identify the origin of any suspect or counterfeit products.

  • Notification: In the event of a suspect or illegitimate product, pharmacies must promptly notify the FDA and relevant trading partners

Inventory Management Compliance:

Effective inventory management not only helps you gain control of your inventory and costs, improve cash flow, and save time, but it also helps reduce your compliance risk and scrutiny from the DEA and other federal regulatory agencies. Your pharmacy needs to have well-documented, comprehensive inventory tracking in place for every drug coming into and leaving your store. 

Pharmacy Technology Can Streamline Compliance 

While it’s no longer advisable to manage your pharmacy operations with manual inventory methods, it’s near impossible to ensure compliance without the help of technology. Pharmacies need software that helps them track and verify the authenticity of pharmaceutical products, ensuring compliance and patient safety. At Datarithm, we understand the complexity and scope of compliance for pharmacies today. Our perpetual inventory management solution is here to help you navigate these challenges, providing: 

Serialization and Verification:

Datarithm's software includes serialization and verification features that automate the tracking and verification of pharmaceutical products. This ensures that pharmacies can easily comply with DSCSA requirements, reducing the risk of errors and penalties.


With Datarithm, pharmacies can achieve end-to-end traceability of pharmaceutical products. This means that they can quickly trace the origin of any product in their inventory, enhancing transparency and safety.

Automated Record-Keeping:

The software simplifies the record-keeping process by automating the generation and maintenance of transaction information, transaction history, and transaction statements required by the DSCSA.

Alerts and Notifications:

Datarithm includes alerts and notification features that promptly inform pharmacies of any suspect or illegitimate products, allowing them to take immediate action and ensure patient safety.

Other Key Features to Look for in Inventory Management Software 

Compliance is so critical and so far-reaching, that any inventory management solution you select needs to be able to offer tools to help you meet regulatory requirements. For truly robust and effective software, you should also look for the following key features: 

Real-Time Tracking:

The software should provide real-time visibility into inventory levels, allowing pharmacies to react promptly to stock shortages or surpluses.

Automatic Reordering and Restocking:

Automation is essential for any pharmacy looking to optimize their inventory management. With automatic reordering, the system can monitor inventory levels in real-time and automatically generate purchase orders when a stock falls below a certain threshold. This eliminates manual tracking and reduces the risk of running out of essential medications, human error and saves time on manual inventory tasks.

User-Friendly Interface:

The software should be user-friendly, enabling pharmacy staff to quickly learn and use the system effectively.

Integration Capabilities:

The ability to integrate with other pharmacy systems, such as point-of-sale and electronic health records, is crucial for seamless operations.

Reporting and Analytics:

Robust reporting and analytics features provide insights into inventory trends, helping pharmacies make data-driven decisions.

Comprehensive and Effective Inventory Management Will Help You Thrive

Any independent pharmacy owner can tell you, there is a big difference between thriving and surviving. The role you play in your community is vital and cannot be understated. And the reality is that you’re up against unique challenges and a complex regulatory landscape that changes on a dime. Fortunately, we’re in an era where accessible technology can make a big difference. As the chain pharmacies continue to evolve and as DIR fee changes loom, now more than ever is the time to implement comprehensive inventory management software that can help you:  

  • Reduce costs and minimize waste. 
  • Ensure you have the right medicine in stoc.
  • Automate processes to save time and ensure accuracy.
  • And track regulatory compliance efforts so you can also ensure patient safety. 

Our guide below explores the impact of pharmacy inventory management, essential strategies, and showcases real-life case studies of how Datarithm has empowered independent pharmacies like yours to achieve remarkable results.  

The Ultimate Guide to Pharmacy Inventory Management; download now

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