2.5 Inventory Management and Medication Safety

Quick Answer: Pharmacy inventory uses FIFO (First In, First Out) to rotate stock. DEA Form 222 is required for C-II orders. Medication safety includes Tall Man lettering for LASA drugs, barcode verification, and proper error reporting.

Inventory Management Principles

FIFO (First In, First Out)

FIFO means the oldest inventory is dispensed first:

• Place new stock behind existing stock
• Check expiration dates when stocking
• Return expired medications for credit or disposal
• Prevents dispensing expired medications

Reorder Points

Reorder Point = (Average Daily Use x Lead Time) + Safety Stock

Inventory Turnover

Turnover Rate = Cost of Goods Sold / Average Inventory Value

Higher turnover = more efficient inventory management

Ordering Controlled Substances

DEA Form 222 (Schedule II)

CSOS (Controlled Substance Ordering System)

• Electronic alternative to paper 222 forms
• Requires digital certificate
• Records maintained electronically
• More secure and efficient

Schedule III-V Ordering

• No DEA 222 required
• Regular invoice/purchase order
• Must maintain records for 2 years

Drug Recalls

FDA Recall Classes

Recall Procedures

1. Receive recall notification (from wholesaler, manufacturer, or FDA)
2. Identify affected products (lot numbers, NDCs)
3. Remove from inventory immediately
4. Quarantine products separately
5. Check dispensing records for affected patients
6. Notify patients if necessary
7. Return products following manufacturer instructions
8. Document actions taken

Medication Safety

Look-Alike/Sound-Alike (LASA) Drugs

Tall Man Lettering helps distinguish similar drug names:

High-Alert Medications

Error Prevention Strategies

Storage Requirements

Temperature Ranges

Light-Sensitive Medications

Store in amber containers or light-resistant packaging:

• Nitroglycerin
• Nifedipine
• Furosemide
• Methotrexate
• Vitamin A

Medication Error Reporting

Types of Errors

Reporting Systems

Error Documentation

When an error occurs:

1. Prioritize patient safety - address harm first
2. Notify pharmacist immediately
3. Document the error objectively (what, when, how)
4. Identify root cause - system vs. individual factors
5. Implement corrective action - prevent recurrence
6. Report as required - internal and external

Important: Error reporting should be non-punitive to encourage reporting and system improvement.

Controlled Substance Inventory

Biennial Inventory

Perpetual Inventory

• Running count updated with each transaction
• Required for Schedule II in most pharmacies
• Allows immediate detection of discrepancies
• Must reconcile with physical counts

Discrepancy Procedures

1. Recount inventory
2. Check dispensing records
3. Review receiving records
4. Document discrepancy
5. Notify supervisor/pharmacist-in-charge
6. Report significant discrepancies to DEA

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PAR Levels and Ordering Methods

Inventory is managed to keep stock available without overstocking. The PAR (periodic automatic replenishment) level is the minimum quantity that triggers a reorder.

Exam Tip: PAR is the trigger point. If stock drops below PAR, you reorder. JIT reduces carrying cost but risks stock-outs if demand spikes.

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Stock Rotation and Expiration

Pharmacies use FEFO (first-expired, first-out) so the product expiring soonest is dispensed first. Expired products are pulled from active stock and segregated for return or destruction.

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Drug Recalls and Required Actions

The FDA classifies recalls by severity, and the technician must act on each. Recalled product is removed from inventory immediately and quarantined.

Worked Example: A Class I recall is issued for a specific lot number of an injectable. The technician checks on-hand stock against the lot, pulls every matching unit, quarantines it, and documents the action, then follows manufacturer return instructions.

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Drug Disposal and Reverse Distribution

Disposal depends on the product. Hazardous drugs follow USP <800> and EPA rules; controlled substances require DEA-compliant destruction (often a reverse distributor or take-back program). Non-hazardous, non-controlled drugs may be returned to a wholesaler. The Safety Data Sheet (SDS) provides handling and disposal guidance for hazardous chemicals. The technician never simply discards controlled substances in the trash.