Community Pharmacy Inspection Program Annual Report, Fiscal Year 2017-2018

Executive Summary

Health Canada helps protect Canadians by authorizing the legitimate use of controlled substances and precursor chemicals using a risk-based assessment and evaluation process, and by performing compliance and monitoring activities such as inspections to minimize the risk of diversion.

The Office of Controlled Substances (OCS) of the Opioid Response Branch regulates the distribution and sale of precursors and controlled substances. This includes administering legislation, regulations, policies and operational activities that support the monitoring of controlled substances such as oxycodone, morphine, fentanyl, and heroin and precursor chemicals used to make these and other drugs. This administration allows for oversight of legal controlled substances, and can therefore reduce the risk of substances moving from legitimate channels to illegal markets.


The Controlled Substances Program of the Regulatory Operations and Regions Branch (RORB-CSP) carries out the operational functions that ensure controlled substances are appropriately managed and monitored. Its compliance and enforcement mandate includes inspecting community pharmacies to ensure compliance with the Controlled Drugs and Substances Act (CDSA) and its associated regulations. OCS and RORB-CSP operate under the authority of the CDSA and its associated regulations including the Benzodiazepines and Other Targeted Substances Regulations, the Narcotic Control Regulations (NCR), the Precursor Control Regulations and Parts G and J of the Food and Drug Regulations. The CDSA provides a framework to control substances that can alter mental processes and that may produce harm to health and to society when diverted or problematically used. Its purpose is to protect public health and maintain public safety by balancing the legitimate need for access to these substances for medical, scientific and industrial purposes with the need to minimize the risk of their diversion to the illegal market.

Health Canada conducts compliance and monitoring activities such as inspections to ensure regulated parties (pharmacists, researchers, licensed dealers, etc.) are compliant with the CDSA and its regulations. Employees work with other groups within Health Canada and with external partners including the Royal Canadian Mounted Police, local law enforcement, the Canada Border Services Agency, and provincial and territorial professional licensing authorities such as the colleges of pharmacists and the colleges of physicians and their professional associations. The program is designed to minimize potential situations in which controlled substances could be diverted to illegal markets, and to ensure that researchers, health care practitioners and patients alike are engaged in the proper storage, use and disposal of these substances. In addition, Health Canada may refer suspicious activities to the relevant provincial or territorial regulatory authority, and share information with those bodies and/or law enforcement agencies to assist in investigations when requested.

Through these and other activities, Health Canada is committed to minimizing the diversion and problematic use of controlled substances.

Problematic Prescription Drug Use

Problematic prescription drug use, particularly problematic opioid use, represents a complex and growing problem for public health and public safety in many communities across Canada.

As frontline health care service providers, pharmacists are important partners in supporting public health initiatives to prevent problematic opioid use. Increasing the number of pharmacy inspections and collecting, analyzing and reporting on the data will support the outcomes of Health Canada’s new Federal Action on Opioids, which focuses on:

  • better informing Canadians of the risks of opioids;
  • supporting better prescribing practices;
  • supporting better treatment options for patients;
  • improving the evidence base upon which policy decisions are made; and
  • reducing the availability and harms of street drugs.

What We Do – Community Pharmacy Inspection Program

The objectives of the Community Pharmacy Inspection Program are to: promote compliance among pharmacists; strengthen cooperation and communication between Health Canada, pharmacists and their provincial authorities and associations; and facilitate national information sharing to address problematic prescription drug use including problematic opioid use.

In 2015, Health Canada announced that it would conduct 1000 compliance promotion inspections in community pharmacies across the country by March 31, 2019. The selection of community pharmacies to be inspected is random but representative of the distribution of the estimated 10 000 community pharmacies across Canada. 100 planned inspections were completed from April 2015 to March 2016, and 300 per year were planned for fiscal years 2016-17, 2017-18 and 2018-19. Additionally, Health Canada carries out “targeted” inspections of pharmacies based on collected information that indicates an elevated risk of diversion or non-compliance with the CDSA.

Community Pharmacy Inspections Program Annual Report, Fiscal Year 2017-2018

This report provides a summary of findings from the inspections of selected community pharmacies for the fiscal year 2017-18 (April 1, 2017 - March 31, 2018). 301 inspections were completed during this fiscal year.

During a pharmacy inspection, Health Canada inspectors examine relevant information such as purchase records, prescription records, loss and theft reports, destruction protocols, inventory reconciliation, and security measures. Inspectors are looking for discrepancies between records and actual inventory, gaps in security measures, and overall practices in the management of controlled substances. Observations, which are linked to regulatory requirements, are recorded in an inspection report which is provided to the pharmacist to promote and encourage compliance, and to undertake corrective action. In cases where significant discrepancies are observed, Health Canada may undertake further compliance action such as a targeted inspection at the pharmacy at a later date, and/or sharing the findings of the inspection with the relevant provincial regulatory College for follow-up.

The education of pharmacists on the requirements of the CDSA and its regulations may reduce the incidence of these types of observations.

  1. Record Keeping Requirements

    Under the CDSA and its regulations, pharmacists are required to keep records of all transactions, such as refills, prescription transfers, and orders received in respect of controlled substances. Inspectors verify records kept by pharmacists to ensure their accuracy.

  2. Security Requirements

    Security requirements under the CDSA are also verified during an inspection. These requirements are in place to help pharmacies reduce the risk of loss or theft of products containing controlled substances. Inspectors check security practices such as alarm systems, access control, and the submission of loss and theft reports to Health Canada.

  3. Provide, Sale and Return Requirements

    The NCR also requires that pharmacists appropriately carry out all activities related to the management of controlled substances, such as providing and selling controlled substances, as well as returning unused substances to vendors. This includes requirements around prescription filling and refilling, the return of controlled substances by the pharmacist to a licensed dealer when unused, and the management of methadone prescriptions.

Risk-Based Approach

In collaboration with inspectors across the country, OCS developed and implemented a risk-based approach to pharmacy inspections that characterizes and describes observations as critical, major or minor based on the risk of diversion. The purpose of this approach is to ensure national uniformity in the classification of observations and to assist in assigning inspection ratings as compliant or non-compliant.

When classifying an observation as critical, major or minor, inspectors will consider the scope (number of occurrences and quantity of product) and severity (potential for diversion) of the deficiency or deviation from the requirements of the CDSA or its regulations. In addition, the previous compliance history, implemented corrective actions and the diligence of the pharmacist to correct previous observations (i.e. willingness to comply) can be taken into consideration.

  1. Critical Observations

    Observations classified as critical represent the most serious contravention of the CDSA or its regulations. An observation is considered critical if it involves the possibility of deliberate fraud, misrepresentation, or falsification of information to circumvent the CDSA or its regulations, or if it clearly increases the immediate risk of diversion, prevents the detection of diversion, or prevents the pharmacy from taking action to address the risk of diversion. An example of a critical observation would be if the inventory reconciliation from the inspection revealed large, unexplainable negative variances.

  2. Major Observations

    Observations classified as major represent a serious contravention of the CDSA or its regulations. An observation is considered major if it may increase the risk of diversion, impairs the detection of diversion, or impairs the pharmacy from taking action to address the potential risk for diversion. An example of a major observation would be if a pharmacy did not report the loss or theft of controlled substances to Health Canada.

  3. Minor Observations

    A minor observation represents a deficiency or deviation from the CDSA or its regulations. A minor observation may be issued if the pharmacist is generally able to prevent, detect and take actions to address potential risks for diversion, but improvements could be made. An example of a minor observation would be if some prescriptions were filed in the regular prescription file and not in the narcotics and controlled drugs file, as required.

  4. Non-compliant Inspection Rating

    An inspection rating of non-compliant will be assigned to a pharmacy if one or more critical observations are identified, or if the inspection identifies that the pharmacist has failed to take all reasonable steps to protect all controlled substances on their premises or under their control, demonstrated by a combination of several major observations.

    When a non-compliant rating has been assigned to an inspection, Health Canada initiates compliance and/or enforcement actions, such as a referral to the provincial professional or territorial licensing authority or, when there is reason to believe that diversion is actively occurring at a pharmacy, a referral to law enforcement. Health Canada can also consider restricting a pharmacist’s privileges to order narcotics. Lastly, a follow-up “targeted” inspection may take place at the non-compliant pharmacy at a later date to verify that corrective actions have been implemented.

Inspection Results

Over the course of the fiscal year 2017-18, community pharmacy inspections were conducted using the risk-based approach; the following is a summary of the results. The inspection results will help inform future compliance promotion activities for community pharmacies and will eventually assist Health Canada in developing guidance for pharmacists on how to comply with the CDSA and its regulations. The risk-based approach was designed to be flexible and accommodate for changes as needed.

It should be noted that due to variations in provincial and territorial regulations and practice guidelines with the CDSA, there are differences in the frequency of some observations from province-to-province. Health Canada works with pharmacy regulatory authorities to ensure consistency in the application of the CDSA across Canada.

Out of the 122 inspections conducted in Ontario, 13 (11%) were rated as non-compliant. Out of the 96 inspections conducted in the Western region, 7 (7%) were rated as non-compliant. Out of the 83 inspections conducted in the Quebec/Atlantic region, 9 (11%) were rated as non-compliant. Most non-compliant pharmacies were referred to the relevant provincial regulatory authorities for further review or action, as needed.

Inspection Results from April 2017 to March 2018
 Type Observation rating Ontario

(122 inspections)


(96 inspections)

Quebec/ Atlantic

(83 inspections)

Security-related observations Critical 15 8 3
Major 237 198 183
Minor 39 16 23
Subtotal:   291 222 209
Records-related observations Critical 0 0 0
Major 20 28 58
Minor 29 90 128
Subtotal:   49 118 186
Provide/Sell/ Return – related observations Critical 2 1 0
Major 7 45 16
Minor 2 5 31
Subtotal:   11 51 47
Other observations Critical 0 0 0
Major 1 0 7
Minor 3 4 17
Subtotal:   4 4 24
Total:   355 395 466

Targeted Inspections

In addition to the 301 community pharmacies that were inspected under the Problematic Prescription Drug Use (PPDU) initiative, inspectors also conducted targeted inspections of community pharmacies, when there was intelligence to suggest that certain pharmacies may not be in compliance. During the fiscal year 2017-18, a total of 257 targeted inspections of community pharmacies occurred across Canada. Of these inspections, 46 (18%) were rated as non-compliant and most were referred to the relevant provincial regulatory authorities for further review or action, as needed.

Targeted Inspection Results from April 2017 to March 2018
 Type Critical Major Minor Total
Security-related observations 27 551 36 614
Records-related observations 1 68 178 247
Provide/Sell/ Return – related observations 1 43 16 60
Other observations 0 4 11 15
Total: 29 666 241 936
Inspection Data from April 2017 to March 2018 by Province
Province Inspected Number of Inspections
Planned for 2017-18 Completed in 2017-18
Random Targeted Random Targeted
British Columbia 65 21 38 39
Alberta 53 17 35 18
Saskatchewan 16 6 11 7
Manitoba 18 9 12 14
Ontario 125 82 122 87
Québec 88 44 59 46
New Brunswick 9 13 7 14
Prince Edward Island 4 1 2 2
Nova Scotia 13 14 9 18
Newfoundland and Labrador 12 4 6 12
Totals 403Table note * 211Table note ** 301 257


In addition to conducting inspections to promote compliance with the CDSA and its regulations, the Community Pharmacy Inspection Program provides the opportunity for Health Canada to identify common issues that may lead to an increased risk of diversion of controlled substances. These issues could be addressed through the development of national guidance documents.

The most common observations cited within a pharmacy inspection report during this past year were consistent with previous years. Health Canada continues to explore ways to promote compliance with the CDSA and its regulations including active engagement with national- and provincial-level organizations, such as pharmacy colleges, that are partners in reducing risks associated with the diversion of controlled substances. The risk-based approach to inspections will be adapted to address issues related to potential diversion. Increasing security measures within a pharmacy and the education of pharmacists on requirements for controlled substances that were unaccounted for during an inspection may reduce the incidence of security-related observations. In addition, a new guidance document regarding how to report losses and thefts has recently been developed and posted on Health Canada’s website to promote compliance with the regulations.

Forward Planning

The risk-based approach to inspections will be used going forward to carry out targeted inspections based on the results found in regular pharmacy inspections, while Health Canada continues to evaluate how business intelligence can be used to identify areas of non-compliance. Therefore, the data presented for fiscal year 2017-18 may differ from the data presented in upcoming fiscal years.

The implementation of the Community Pharmacy Inspection Program in 2015 has had an immediate, observable, and positive impact on regulatory compliance within the pharmacist community. We anticipate that these positive results will lead to further enhanced rates of compliance in subsequent years, which will in turn contribute to Health Canada’s efforts to reduce the harms associated with diverted prescription drugs, particularly problematic prescription drug use in Canadian communities.

Page details

Date modified: