Independent Pharmacies Must Be Prepared For DEA Inspections | AAP 2025

Ron Friedman grew up working in his father’s independent pharmacy in Virginia with his two older brothers, which he says was a formidable part of his education. Friedman’s father ran the pharmacy for over 30 years, dispensing medication to patients from behind the counter largely unbothered by the state’s board of pharmacy or any federal agencies. Friedman said he likes to refer to this period—from roughly the 1960s to the 1980s—as the golden age of pharmacy.

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Friedman’s father dissuaded his three sons from joining him in the pharmacy profession, so Friedman went on to be lawyer, working as a federal prosecutor in the US Attorney’s Office in Seattle for 22 years. He ended up focusing on the pharmacy industry, not because he wanted to go after pharmacies, but because his time there happened to coincide with the rise of prescription drug abuse.

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Throughout his career at the Attorney’s Office, Friedman came to realize that nobody was there for independent pharmacies, so he started his own private practice where he helps pharmacies navigate interactions with the Drug Enforcement Administration (DEA).

“it's a very different climate now,” Friedman said. “In certain ways, it could not have shifted more dramatically. The DEA is much more rigorous. States are much more rigorous. All parts of law are more rigorous. They are visiting discipline upon pharmacies and fines upon pharmacies. By their methods, it's taken a lot of the wins out of pharmacy—and not just independents, but across the board.”

In a presentation titled “DEA Inspections and Red-Flag Dilemmas —What’s a Pharmacy to Do?” given at the American Associated Pharmacies (AAP) Annual Conference, held April 10 to 12 in Austin, Texas, Friedman discussed risks associated with civil violations arising from a DEA inspection, best practices for responding to a DEA inspection, how to identify any red flags, and best practices for dispensing.

Friedman said that everything began to change when the opioid epidemic really took hold in the US. In response, the DEA hurt a lot of independent pharmacies and put them under severe restrictions. Independent pharmacies now face a daunting landscape of red flags, documentation requirements, and potential penalties that can cripple their operations. Throughout his presentation, Friedman focused on two main areas: DEA inspections and red flags.

DEA inspections are when diversion investigators come to a pharmacy. These are usually investigation-based—the DEA thinks there is something wrong—or they can be random. The DEA is only authorized to review pharmacy records, primarily to conduct a controlled substance audit. They examine biennial inventories, invoices, DEA Form 222s, CSOS records, destruction logs, and prescriptions to ensure all elements are accurate and accounted for.

The audit starts with the inventory and tracks all incoming and outgoing substances, including current stock. If discrepancies arise, the DEA may respond with a letter of admonition or a Memorandum of Agreement. Although the DEA can't fine pharmacies directly, they work with the US Attorney’s Office to pursue civil penalties, often attaching steep monetary fines to each violation found.

To protect your pharmacy, Friedman said to always be prepared for an inspection and to treat it like a fire drill. Periodically review records, spot check prescriptions, and conduct internal audits or inventories. Create forms to document these checks, showing you're actively monitoring compliance. Maintain written policies for theft, red flags, and anti-diversion, even if basic. Establish a clear protocol for inspections: who to call, who handles DEA interactions, and how to notify your attorney. Keeping accurate, up-to-date records and showing good faith efforts can make a big difference.

Friedman then moved on to discuss red flags. He began with talking about the concept of “corresponding responsibility.” This traditionally meant that pharmacists must verify a prescription is properly written, not forged, and came from a licensed prescriber. However, that changed in 2012 with a DEA administrative law judge’s decision in a case involving CVS in Florida. The decision shifted that responsibility dramatically to where pharmacists must now actively identify and resolve red flags before dispensing.

Red flags include cash payments, long travel distances, suspicious behavior, or signs of doctor shopping. However, these indicators are not officially listed in any DEA regulations, US Code, or even the DEA’s own Practitioner’s Manual. Friedman said this lack of clarity puts pharmacists in an impossible position and forces them to make judgment calls without firm guidance. Without proper structure, pharmacists are caught between serving legitimate patients, especially those managing chronic pain, and avoiding regulatory scrutiny.

Friedman said that the best advice he can give is to follow your gut. He added if something feels off—whether it’s the quantity, the patient, or the prescriber—don’t ignore that feeling. As the dispensing pharmacist, it’s important to clearly document why you declined to dispense and cite specific red flags. Even if you resolve a concern and dispense the medication, you should document that too. Friedman finished by saying that independent pharmacies provide unmatched service, and that care is recognized by every generation.

“Today, at independent pharmacies, the patient experience is completely different,” Friedman said. “It's so intimate … The greatest deterrent to diversion is direct pharmacist-patient interaction—reminding a patient about the responsible use of medication. That doesn’t happen at [chain pharmacies]. [The DEA] has to remember what's most important to the dispensing of medication. [They] need to act in a way that will enshrine independent pharmacies and promote them and realize just how important it is to stemming diversion.”

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