If the Drug Enforcement Administration (“DEA”) shows up to conduct an inspection or audit, one of the FIRST documents they will request to review is your most recent biennial inventory. A DEA registrant’s ability to produce current and accurate biennial inventory documentation upon request has the power to start a DEA visit off with success…or distress if you have not completed one. 

Completing a biennial count for all federally scheduled controlled substances (“DEA controlled substances”) is a federal requirement and matter of regulatory inspection readiness that all registrants ordering and maintaining a controlled substance inventory must adhere to. Accordingly, understanding how to properly conduct and document DEA biennial inventory is essential to compliance risk management for DEA-registered veterinary hospitals and veterinary professionals.

Breaking Down DEA Biennial Inventory Requirements

21 CFR 1304.11 sets forth DEA inventory requirements. As noted in 21 CFR 1304.11(c): “After the initial inventory is taken, the registrant shall take a new inventory of all stocks of controlled substances on hand at least every two years. The biennial inventory may be taken on any date which is within two years of the previous biennial inventory date.”

21 CFR 1304.11(a) outlines “general requirements” that DEA inventories must adhere to, which include the following:

• Contain a complete and accurate record of all controlled substances “on hand” on the date the inventory is taken;
• Be documented in written, typewritten, or printed form;
• Be maintained at the DEA-registered location; and
• Indicate whether the inventory was taken as of opening of business or as of the close of business on the inventory document.

“On hand” means all controlled substances in the possession of or under the control of the registrant. This includes all active stock, backstock, and any expired controlled substances at the registered location that have not been sent for reverse distribution to undergo destruction..

When to Conduct Biennial Inventory

As indicated above in 21 CFR 1304.11(c), DEA biennial inventory must be completed at least once every two years. The two-year period is not measured by calendar year. Rather, it is measured from the date of your initial DEA inventory or last recorded DEA biennial inventory (for DEA registrants that have been operating longer than two years). For example, if a veterinary hospital completed its last biennial inventory on June 15, 2024, the next DEA biennial inventory must be completed on or before June 15, 2026. 

Some veterinary hospitals choose to perform inventory counts more frequently as part of internal pharmacy inventory procedures. While additional counts can support stronger oversight and inventory reconciliation processes, the DEA requirement is every two years following the date initial inventory was conducted, at minimum.

Maintaining a clear schedule and documented history of past biennial inventories supports regulatory inspection readiness and reduces the risk of missing biennial inventory deadlines. Veterinary hospitals that track controlled substance usage trends through structured inventory intelligence tools often identify discrepancies long before conducting biennial inventory counts.

Who Conducts Biennial Inventory

Who is responsible for conducting DEA biennial inventory depends on the type of DEA registration. All DEA registrations must have a signee of record, and the signatory for the DEA registrations depends on whether the registrant is an individual practitioner or a facility-based business.

The named DEA registrant on the DEA registration being used to order controlled substances is responsible for completing biennial inventory. If a controlled substance inventory is ordered under an individual DEA Practitioner Registration, that individual is personally responsible for conducting biennial inventory. Individual practitioner registrations are connected to a specific person who is the only authorized signee for that registration with the DEA.

If a facility-based DEA Registration (such as a Hospital/Clinic DEA Practitioner Registration) is used to order and maintain a controlled substance inventory, the individual who submitted the registration application to the DEA is considered the primary signee; however, signing authority may also be granted to other authorized staff members. 

‍

 If you are not sure what type of DEA registration you have, this information is documented under the “Business Activity” section of DEA Form-223, the official Certificate of Registration registrants receive from the DEA.

If you are a DEA registrant but do not order and maintain a controlled substance inventory under your registration, the DEA biennial inventory requirement does not apply to you.

Documenting Biennial Inventory

As dispensers of controlled substances, DEA-registered veterinary facilities and professionals are required to include the same information on a biennial inventory as manufacturers, distributors, reverse distributors, importers, exporters, chemical analysts, researchers, and collectors. Specific information that must be included on a biennial inventory of dispensers is detailed in 21 CFR 1304.11(e).

The DEA does not provide a biennial inventory template; they provide regulations outlining requirements for how DEA biennial inventory must be performed and what needs to be documented. When a registrant accepts a DEA registration, they are automatically acknowledging that they understand all associated federal requirements that come with that privilege; therefore, the DEA expects DEA registrants to be knowledgeable on what the requirements are and to execute upon and follow them accordingly. 

Properly documenting biennial inventory and ensuring that all required information is included and correctly annotated involves more than referencing one specific regulation. All of 21 CFR 1304.11 as well as various other aspects of recordkeeping requirements under “Records and Reports of Registrants”, 21 CFR Part 1304, must be considered. While veterinary controlled substance operations and inventories vary, when it comes to documenting biennial inventory, certain required information is synonymous across the board. For this reason, creating a DEA biennial inventory template that can be used again and again is recommended.

DEA Registrant Information

When creating a DEA biennial inventory template, start by making sure that information for the DEA registrant is clearly documented at the top. This information needs to be consistent with the information the DEA has on file; therefore, the registrant’s DEA Form-223 Certificate of Registration should be referenced. Make sure that the name, address, and DEA registration number annotated on your DEA biennial inventory template matches the information reflected on the registrant’s DEA Form-223 exactly.

When Biennial Inventory is Performed

Per 21 CFR 1304.11(a), your DEA biennial inventory template should include space/fields to add the date on when the inventory is taken as well as whether the inventory was taken as of opening of business or as of the close of business.

Execution

Signature lines for the DEA registrant of record and an authorized witness to execute and date the biennial inventory document as verification that it was conducted by the DEA registrant (or DEA signatory), and a witness should also be included.

Separation of Schedule II and III-V

As indicated in 21 CFR 1304.04(f)(1), the DEA requires schedule II controlled substance records and inventories to be maintained separately from all other records of the registrant, which includes biennial inventory documentation. When using schedule II-V controlled substances, separate DEA biennial inventory templates should be used for schedule II and schedule III-V controlled substances.

What To Inventory

Per 21 CFR 1304.11(c), all DEA controlled substances “on hand” must be included during biennial inventory counts. Do not forget to include DEA controlled substances that may be refrigerated, compounded, stored in separate treatment areas, medical carts, and/or any satellite storage areas within the DEA-registered facility.

Note: Any DEA controlled substances dispensed from inventory awaiting patient pickup do not get included with biennial inventory counts. 

‍

State-Scheduled Controlled Substances 

Non-DEA controlled substances may not be included on DEA biennial inventory documentation. DEA separation requirements as noted in 21 CFR 1304.04(f)(1) apply not only to schedule II and schedule III-V DEA controlled substances, but also to any state-specific controlled substances and all other non-DEA inventory.

If the state you practice in has scheduled any “drugs of concern” as a controlled substance (example: gabapentin, propofol, xylazine, trazadone, etc.), a separate biennial inventory should be conducted and documented to ensure adherence to state biennial inventory requirements wherein state-scheduled medications can be included on the biennial inventory count documentation. 

State controlled substance regulations vary. While some states follow DEA biennial inventory requirements, others set forth specific dates and/or timeframes for when controlled substance inventory must be performed. Depending on where you practice, state laws may require controlled substance inventory to be conducted more frequently than biennially, as is the case for states like Illinois that require an annual controlled substance inventory, and the California quarterly schedule II controlled substance inventory requirement. Always verify state-specific controlled substance inventory requirements. As a reminder, state inventories do not replace DEA biennial inventory requirements, and state-specific biennial inventory documentation must be maintained separately from DEA required records on-site at the registered location to prevent “commingling” of records.

‍

Performing Biennial Inventory Counts

Ensuring that all required information is properly documented for all controlled substances in inventory during biennial counts is crucial. Specific controlled substance information that must be recorded is outlined in 21 CFR 1304.11(e). 

If you are creating a biennial inventory template, make sure that the following information is clearly documented for each controlled substance:

• Controlled substance name;
• Strength and dosage information;
• Form (injectable, oral, tablet etc.);
• Container size (mLs, tablets etc. per container); 
• Number of containers (non-expired opened and unopened);
•  Any of expired controlled substances in inventory awaiting disposal; and
• Totals (expired and non-expired in mLs, tablets, patches etc.)

When conducting biennial inventory counts, it’s important to also be mindful of the following:

•  Separation: In addition to ensuring that DEA schedule II and schedule III-V controlled substances are inventoried separately during biennial counts, any expired DEA controlled substances must also be clearly separated out from non-expired controlled substances on biennial inventory documentation. As a best practice, send expired controlled substances for reverse distribution prior to conducting biennial inventory counts to make the process easier. 
• Liquids: DEA regulations require liquid schedule II controlled substances to be physically drawn up for an exact count during biennial inventory, whereas liquid schedule III-V controlled substances may be “eyeballed”. Of note, while the DEA permits “eyeballing” of schedule III-V controlled substances, “eyeballing” is not recommended because not all controlled substances are easy to “eyeball” and your biennial inventory should be as exact as possible.
• Pill counter applications and tools: The fact that physical inventory counts are labor-intensive and time-consuming is undeniable. Many pill counter and inventory apps exist today that help streamline inventory counting processes. While these tools can be beneficial in decreasing the amount of time spent on conducting counts as well as reducing errors, DEA does not permit their use when conducting counts for official DEA inventories. As noted in 21 CFR 1304.11(a), controlled substances must be physically counted and include all controlled substances “on hand”. 

Step-by-Step: How to Complete a DEA Biennial Inventory

Breaking the biennial inventory process into clear steps helps reduce confusion and disruption. For this reason, creating DEA biennial standard operating procedures are strongly recommended as a best practice. When conducting DEA biennial inventory using a properly formatted template:

Step 1: Verify that the DEA registrant’s information is accurate and record when inventory is being conducted.
Select a date within the current two-year period. Document whether the inventory will reflect counts at the beginning or close of business. This choice must be clearly noted.

Step 2: Compile controlled substances
Identify every location where controlled substances are stored. Include treatment areas, surgical suites, safes, cabinets, refrigerators, and any emergency kits. Make sure scheduled II controlled substances are documented separately from schedule III-V controlled substances and all non-DEA drugs and items.

Step 3: Physically count each controlled substance
Perform full, physical counts for all controlled substances. Record all controlled substance information and inventory quantities carefully.

If you are located in a state with additional state-scheduled controlled substances and/or specific inventory requirements outside of DEA biennial inventory requirements, make sure to document a separate state biennial inventory accordingly.

Step 4: Execute and retain original biennial inventory documents.
Ensure biennial inventory document(s) are signed by the designated DEA individual of record and the authorized witness who assisted with the biennial counting process. Store the original, executed biennial inventory document(s) with other DEA-required records in a “readily retrievable” manner that is available for review upon request at the DEA-registered location for a minimum of two years to meet DEA requirements (or longer depending on the state where you practice).

A clear, consistent biennial inventory process strengthens controlled substance audit trail documentation and reduces the chance of omissions.

Common Biennial Inventory Mistakes That Increase Compliance Risk

Even well managed veterinary hospitals can encounter issues when conducting a biennial inventory. Common mistakes include:

• Failing to include controlled substances located in all storage areas;
• Failing to properly separate out each controlled substance according to its associated National Drug Code (“NDC”) number as individual line items;
• Incorrectly assigning controlled substance drug schedules;
• Neglecting to use a separate biennial inventory form for schedule II and III-V controlled substances;
• Failing to document when biennial inventory is being conducted;
• Forgetting to fully execute original biennial inventory documentation;
• Neglecting to include expired controlled substances remaining in inventory; and
• Including non-federally scheduled drugs on biennial inventory with DEA controlled substances. 

Strong compliance risk management during biennial inventory depends on accuracy, consistency, and documentation discipline.

Simplifying Biennial Inventory With Automated Systems

Automated inventory systems do not replace the human elements necessary for physical inventory counts of controlled substances as well as execution of DEA biennial inventory documents from the DEA Registrant (or DEA registration signatory) and an authorized witness on original DEA biennial inventory records. That being said, automation can significantly help with DEA biennial inventory as well as a myriad of other aspects of overall inventory management processes. The benefits that automated inventory management systems provide by streamlining data, ensuring accuracy, and generating a “readily retrievable” digital dispensing record is undeniable. 

Whether your veterinary hospital operates a separately registered pharmacy requiring adherence to specific pharmacy inventory procedures, or controlled substances are in-house dispensed to veterinary patients from primary inventory, automated systems support controlled substance inventory management by tracking and maintaining “real-time” records of dispensing activity and current “on hand” quantities.

When properly implemented, automated systems can:

• Optimize controlled substance tracking;

• Reduce transcription errors during documentation;
• Replace guesswork with precision;
• Maintain consistent audit trail documentation for every transaction;

• Support inventory reconciliation processes;
• Provide clear visibility into usage patterns;
• Track and serialize medications in real-time;
• Integrate with existing software and systems; and
• Generate inventory reports that transform raw data into clear, actionable insights.

CUBEX solutions are designed to support veterinary hospitals and veterinary controlled substance operations of all types, shapes, and sizes with secure controlled substance management solutions and standardized workflows. By integrating dispensing controls with inventory oversight, CUBEX helps veterinary hospitals maintain stronger documentation integrity and improve visibility with controlled substance tracking. While automation does not eliminate the requirement to conduct a physical biennial count, the benefits automated systems provide through consistent audit trail documentation and increased inventory reconciliation process accuracy can help make the biennial inventory process faster, more accurate, and less disruptive to overall operations.

Biennial Inventory, Audit Trails, and Inspection Readiness

Conducting mandatory DEA biennial inventory counts as a DEA registrant does more than just “check a box” for regulatory inspection readiness. The physical counts conducted during biennial inventory are a structured opportunity to verify that your controlled substance tracking aligns with actual inventory levels. 

Accurate biennial inventory counts support overall regulatory inspection readiness and DEA compliance by demonstrating:

• Adherence to DEA biennial inventory requirements per 21 CFR 1304.11(c);
• Organized audit trail documentation;
• Consistent pharmacy inventory procedures; and
• Proactive DEA compliance risk management.

DEA-registered veterinary hospitals and professionals operate within a highly regulated framework. When DEA biennial inventory is considered part of a broader controlled substance management strategy rather than an isolated task, it helps support and protect the DEA registrant, the veterinary hospital/clinic, the veterinary team, and the business itself.

‍