Encyclopedia
The author explored secondary findings to create a multidisciplinary conceptual analysis of the reasons why pharmacy internal controls executed with greater diligence may be needed to avoid fraud/drug diversion. The author also provides a review of available internal control methods that can be used to mitigate diversion.
- COVID-19 pandemic
- internal controls
- pharmacy inventory
- drug diversion
- fraud
Pharmacy businesses operate as specialized merchandise organizations, providing healthcare products to the marketplace. To meet consumer demands in a timely fashion, pharmacies must store adequate types and quantities of products in inventory. According to the World Health Organization (WHO), managing pharmaceutical product inventory effectively is vital to the success of a pharmacy organizational unit. To manage inventory, it is important for pharmacies to develop comprehensive internal controls. Internal controls are defined as the methods used within an organization to safeguard assets, enhance reliability of accounting controls, increase efficiency of operations, and ensure compliance with laws and regulations.
1. Introduction
Pharmacy businesses operate as specialized merchandise organizations, providing healthcare products to the marketplace. To meet consumer demands in a timely fashion, pharmacies must store adequate types and quantities of products in inventory. According to the World Health Organization (WHO), managing pharmaceutical product inventory effectively is vital to the success of a pharmacy organizational unit. To manage inventory, it is important for pharmacies to develop comprehensive internal controls. Internal controls are defined as the methods used within an organization to safeguard assets, enhance reliability of accounting controls, increase efficiency of operations, and ensure compliance with laws and regulations.
2. The Present Status of Pharmacy Internal Controls
Generally, pharmacies have been able to develop effective internal controls and meet set standards. However, it is important to revisit standard business practices and perhaps implement new operating procedures in the wake of current events that significantly impact business operations and staff. Sometime in 2019, a novel coronavirus, COVID-19 emerged. COVID-19 spread rapidly and threatened the health and economies of the world’s nations. On 11 March 2020, the World Health Organization (WHO) declared COVID-19 a global pandemic. COVID-19 and the United States (U.S.) government interventions (e.g., nationwide lockdowns) designed, to stem the spread of the virus, have both caused significant macro- and microeconomic effects. This research highlights the possible need for better inventory management to reduce the misuse of pharmaceutical drugs from fraudulent and drug diversion activities.
