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VA Health Care: Pharmacy Inventory Management Could Benefit from System-Wide Oversight

GAO-18-658 Published: Sep 27, 2018. Publicly Released: Sep 27, 2018.
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Fast Facts

The VA, which provides health care for 9 million veterans, has faced challenges in managing inventory at its pharmacies. For example, VA medical centers have struggled to accurately account for and update information on medications in stock.

In this report, we found that VA cannot fully oversee management of pharmacy inventories system-wide because VA lacks

a comprehensive system to manage pharmacy inventory—a new system will not be implemented for up to10 years

a focal point for system-wide oversight.

We recommended that VA designate a focal point to oversee system-wide pharmacy inventory management.

This automated medication dispensing machine at a Department of Veterans Affairs medical center allows real-time tracking of inpatient medications.

This photo shows rows of containers going from floor to ceiling on both sides of an aisle.

This photo shows rows of containers going from floor to ceiling on both sides of an aisle.

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What GAO Found

Selected Department of Veterans Affairs' (VA) medical centers (VAMC) use generally similar approaches for managing their pharmacy inventories. For example, all VAMCs store certain medications in secured areas. However, GAO found that VAMCs have also taken unique approaches for procuring and tracking medications, as allowed under VA policy. For example, to better address medication shortages, one VAMC pharmacy GAO visited established a shortage committee that meets on a weekly basis. Another VAMC pharmacy uses an automated dispensing machine together with compatible software that allows the pharmacy to track the location of most inpatient medications in real-time (see figure).

Automated Dispensing Machine at a Veterans Affairs Medical Center

Automated Dispensing Machine at a Veterans Affairs Medical Center

GAO also found that VA's oversight of VAMCs' pharmacy inventory management is limited as VA lacks a comprehensive inventory management system or a focal point for system-wide oversight. In May 2018, VA signed a contract for a new electronic health records system that should allow VA to monitor VAMCs' inventories; however, VA officials expect implementation of this system to take up to 10 years. Based on a review of VA policies and interviews with VA officials, GAO found that VA has not designated a focal point with defined responsibilities for system-wide oversight of VAMCs' pharmacy inventory management. This is inconsistent with federal internal control standards for monitoring and establishing structure and authority to achieve an entity's objectives. Without a focal point for system-wide oversight, VA has limited awareness of the unique approaches that VAMCs use to manage their inventories and is missing an opportunity to evaluate these approaches. Additionally, VA cannot effectively share and standardize inventory management best practices as appropriate. Having a focal point is especially important given that VAMCs have historically had challenges in managing their inventories and a comprehensive pharmacy inventory management system may not be available for the foreseeable future.

Why GAO Did This Study

VA provides health care services, including pharmacy services, to approximately 9 million veterans each year. Since 2000, VAMCs have faced recurring challenges in managing their pharmacy inventories, including difficulties with accurately accounting for and updating inventory totals through their pharmacy systems.

GAO was asked to review VA pharmacy inventory management. This report (1) describes approaches selected VAMCs use to manage their pharmacy inventories and (2) assesses the extent to which VA oversees VAMCs' efforts to manage their pharmacy inventories.

To conduct this work, GAO visited a non-generalizable selection of five VAMCs chosen for the complexity of services offered and variation in location. GAO also reviewed VA national policies and local polices for the selected VAMCs and interviewed VA officials at the headquarters, regional, and local levels. GAO assessed VA's oversight of pharmacy management in the context of federal internal control standards.


GAO recommends that VA designate a focal point for overseeing VAMCs' pharmacy inventory management efforts system-wide and define the focal point's responsibilities. VA concurred in principle with the recommendation.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Veterans Affairs The Secretary of the VA should direct the Undersecretary for Health to designate a focal point for overseeing VAMCs' pharmacy inventory management system-wide and define the focal point's responsibilities. (Recommendation 1)
Closed – Implemented
As of March 2022, VA installed ScriptPro Inventory Management (SIM) software at 121 facilities. According to VA officials, since SIM is an interim measure pending full implementation of VA's new electronic health record (EHR) system developed by Cerner Government Services, Inc. (Cerner), the focus of installation and implementation of a perpetual inventory management system continues to be in VA medical facilities' outpatient pharmacies only. The inpatient pharmacy perpetual inventory will remain a gap until Cerner is fully deployed across the enterprise. According to VA officials and directives, as of October 2023, VA Pharmacy Benefits Management (PBM) functions as the focal point by developing standards for VA medical facilities and assisting Veterans Integrated Services Networks and VA medical facilities with compliance in the areas of pharmacy practice, including but not limited to medication procurement, security, storage, distribution and dispensing pharmacy inventory, and inventory management and disposal. For example, VA PBM provided documentation of its responsibilities to serve as the focal point of developing and providing education to VA medical facilities on inventory management as it relates to SIM. VA PBM has also organized communities of practice to allow users of various types of automation to discuss issues and share solutions across VA as well as a pharmacy email distribution group to share pharmacy inventory best practices across VA medical facilities. At this time, VA also updated its general pharmacy service requirements so that each pharmacy designates a full-time inventory manager designated to provide oversight of inventory management.

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Best practicesControlled substancesHealth care administrationHealth care servicesInternal controlsInventoryInventory controlInventory control systemsMedicinePharmacyVeteransVeterans affairsVeterans' medical care