Drug Diversion in Veterinary Practices: Prevention & Response (2026)

Drug diversion is the theft or misuse of controlled substances by someone inside the practice — most often a staff member taking ketamine, opioids, or other controlled drugs for personal use or resale. It is one of the most serious risks a veterinary practice faces, and because the practice owner holds the DEA registration, the owner is the one held accountable when it happens.

This guide covers diversion end to end: what it looks like in a veterinary setting, why the owner is exposed, the warning signs, how to prevent it, how to respond when you suspect it, and the reporting obligations that attach. It is longer than our other articles because diversion is where recordkeeping, security, personnel, and reporting all meet — and where getting it wrong costs the most.

What diversion looks like in a vet practice

Diversion in a veterinary practice rarely looks like a dramatic break-in. It is usually quiet, internal, and built on the fact that controlled substances move through the practice constantly and are measured in small, hard-to-verify amounts. Common methods:

Wasting fraud. A staff member records more drug as “wasted” than was actually discarded and keeps the difference. Waste is the single most exploited gap, because a wasted amount is, by definition, gone — there is nothing left to count.
Short-dosing patients. Drawing up a full dose, administering part of it to the animal, and diverting the rest. The patient still gets sedation, just less than charted.
Substitution / tampering. Removing drug from a vial and replacing the volume with saline so the container still looks full. The count matches; the drug is gone.
Pocketing during transactions. Taking a vial or tablets and covering the gap with a falsified or omitted log entry.
Exploiting weak records. Where logs are reconstructed at end of shift, or one shared log covers multiple containers, an entry can simply never be made.
Skimming receiving. Diverting product between delivery and the log entry, before it is ever counted into stock.

The through-line: diversion thrives wherever a controlled substance is not tied to a specific, reconciled, witnessed record. The drugs most often diverted in veterinary medicine are ketamine, opioids (such as hydromorphone, fentanyl, and buprenorphine), and other injectable anesthetics and sedatives — drugs with both clinical value to the diverter and street value.

Why the practice owner is exposed

This is the part that makes diversion a business risk, not just an HR problem: the consequences land on the registrant.

The DEA registration belongs to the practice or the registrant whose name is on it. When controlled substances cannot be accounted for, the DEA does not primarily ask “who took them” — it asks “did the registrant maintain the records, security, and controls the law requires.” Diversion by an employee is, almost by definition, evidence that one or more of those controls failed.

So an owner who discovers diversion faces exposure on several fronts at once:

Recordkeeping and security findings. The diversion itself reveals gaps — un-witnessed waste, weak access control, unreconciled logs — and each gap is a potential violation under 21 CFR.
Civil penalties, assessed per violation, which are routinely counted in the dozens.
The registration at risk. In serious cases, the DEA can suspend or revoke the registration. For a veterinary practice, that means losing the ability to stock the drugs anesthesia and euthanasia depend on.
A triggered inspection. Diversion and the loss reporting that follows are recognized triggers for a DEA inspection of the practice.
State board exposure — separate action by the state veterinary board.
Patient-safety fallout — short-dosed animals received inadequate sedation or analgesia.

The uncomfortable truth: a practice cannot fully prevent a determined employee from attempting diversion. What it can do is build controls that catch it fast and a record that shows the practice did everything required. That distinction — caught quickly with clean controls, versus discovered late amid sloppy records — is the difference between a manageable incident and a threat to the registration.

Warning signs of diversion

Diversion shows up in two places: in the drugs and records, and in the people. Owners should watch both.

Signs in the drugs and records:

Counts that don’t reconcile — running balances that drift from the physical count, especially repeatedly or for the same drug.
Unusually high waste, particularly waste concentrated around one staff member or one shift.
Waste that is “witnessed” only on paper — a witness signature with no real second-person observation behind it.
Vials that look tampered with — punctured seals, cloudy or off-color contents, volume that does not match the log.
Patient records that don’t match drug use — charted sedation heavier or lighter than the drug logged, or doses logged for visits that didn’t need them.
Logs filled in late, in one handwriting and one pen, rather than contemporaneously.
Missing or “lost” log pages, or correction fluid and unexplained edits.

Signs in the people — these are reasons to look closer, never proof on their own:

A staff member who volunteers to handle controlled substances unusually often, or insists on being the one to waste and count.
Working alone with controlled substances when avoidable, or staying late around the drug cabinet.
Behavioral changes — performance decline, mood swings, frequent unexplained absences, signs of impairment at work.
Resistance to controls — pushback against witnessing, reconciliation, or access changes.

No single behavioral sign means someone is diverting. But a pattern in the records, lining up with a pattern in a person, is a signal that demands a careful, documented response — not an accusation.

Prevention: building controls that work

Prevention is layered. No single measure stops diversion; the combination makes it hard to attempt and fast to detect.

1. Access control

Limit access to the minimum number of specifically authorized staff. Fewer people with access means a smaller pool and clearer accountability.
Keep controlled substances in a securely locked, substantially constructed cabinet, locked whenever a staff member is not actively using it. (See controlled substance storage requirements for the full standard — and note the standard is a securely locked cabinet, not a safe bolted to the floor.)
Control keys, combinations, and codes. Track who holds them. Change combinations and codes when a staff member with access leaves the practice.
Keep minimum quantities on hand. Less drug stocked is less drug to divert and less to account for.

2. Reconciliation

One log per opened container, with a running balance updated immediately after every use — never reconstructed from memory.
Reconcile the log balance against the physical count regularly — many practices do this at least daily for opened containers and at each shift change. Frequent reconciliation shrinks the window in which diversion goes unnoticed.
Investigate every discrepancy at the time it appears. Document what you found. An unexplained discrepancy is both a recordkeeping problem and a possible first sign of diversion.
Take the biennial inventory seriously as a control, and consider counting more often. See biennial inventory requirements.

3. Witnessing

Witness all waste. Any drug drawn up and not administered must be discarded and recorded with a second authorized person genuinely observing the waste — not signing afterward as a formality.
Make the witness role real: the witness watches the drug be wasted and confirms the amount. A rubber-stamp signature is a control on paper only, and it is exactly the gap wasting fraud exploits.
Where practical, rotate who witnesses and who reconciles, so no single person controls both the action and its verification.

4. Personnel controls

Screen before granting access. Under 21 CFR 1301.76(a), a registrant may not employ, in a position with access to controlled substances, a person who has been convicted of a felony offense relating to controlled substances, or who has had a DEA registration application denied, a DEA registration revoked, or has surrendered a DEA registration for cause. This is a federal requirement, not a suggestion — build it into hiring.
Train staff on controlled-substance handling and on what diversion looks like, and document the training. Trained staff are both less likely to drift into bad habits and more likely to notice a colleague’s.
Set the tone from the top. Owners and lead veterinarians who follow the controls themselves make the controls credible.

5. The written procedure

Put the practice’s controlled-substance controls, and its response plan for suspected diversion, in a written SOP. A plan written calmly in advance is far better than decisions made under stress.

Responding to suspected diversion

When the signs point to diversion, the response has to be careful — protecting the investigation, the practice, and the rights of a person who has not yet been proven to have done anything.

1. Do not tip off or confront prematurely. An early accusation can prompt the destruction of evidence, falsified records, or a defamation claim if you are wrong. Move deliberately.

2. Preserve the records. Secure the relevant logs, inventory records, schedules, and access records. Do not let them be “corrected.”

3. Document what you have. Write down the discrepancies, dates, drugs, quantities, and which staff had access — facts, not conclusions.

4. Get the right people involved. Depending on the situation, that means an attorney experienced in DEA matters, and potentially law enforcement. Diversion is a criminal matter; the practice is not equipped to run a criminal investigation alone.

5. Tighten controls immediately. Restricting access, changing codes, and increasing reconciliation is appropriate risk management — and reasonable even before any individual is confirmed.

6. Treat HR and the legal/regulatory track separately. Employment decisions follow your employment policies and counsel’s advice. The DEA reporting obligation is independent of, and runs on its own timeline regardless of, the HR process.

The goal of the response is twofold: stop the loss, and produce a clear, documented record showing the practice acted properly the moment it had reason to.

Reporting obligations

Diversion that amounts to a theft or significant loss of controlled substances triggers the DEA reporting duties under 21 CFR 1301.76(b):

Written notice to the DEA Field Division Office within one business day of discovery.
A complete and accurate DEA Form 106, filed online through the DEA Diversion Control Division, within 45 days of discovery.

The clock runs from discovery — the day you reasonably conclude controlled substances are unaccounted for through theft or significant loss — not from when the diversion began. The full mechanics, including theft-vs.-significant-loss and how to file, are covered in our guide to DEA Form 106.

Beyond the DEA:

Local law enforcement — diversion is a crime; a police report is generally appropriate and Form 106 asks which department you notified.
State veterinary board — many states require their own notification, on their own timeline. State duties are separate from and additional to the federal ones.

Do not delay the DEA reporting while an internal or HR process plays out. The one-business-day and 45-day clocks are firm, and missing them is a violation in its own right — independent of the diversion that caused it.

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Frequently asked questions

What is drug diversion in a veterinary practice? The theft or misuse of controlled substances by someone inside the practice — typically a staff member taking ketamine, opioids, or other controlled drugs. It is usually quiet and internal, hidden in waste records, short-dosing, or tampered vials.

Who is responsible when an employee diverts drugs? The DEA registrant — the practice or owner whose name is on the registration. The DEA holds the registrant accountable for maintaining the records, security, and controls required by 21 CFR, so diversion typically exposes the owner to findings, penalties, and registration risk.

What are the warning signs of diversion? Counts that don’t reconcile, unusually high waste, vials that look tampered with, patient records that don’t match logged drug use, logs filled in late, and missing log pages — often alongside behavioral changes in a staff member. A pattern in the records lining up with a pattern in a person is the real signal.

Can I employ someone with a drug conviction in my practice? Under 21 CFR 1301.76(a), a registrant may not employ, in a position with access to controlled substances, a person convicted of a felony offense relating to controlled substances, or who has had a DEA registration denied, revoked, or surrendered for cause. Screen before granting access.

Do I have to report diversion to the DEA? Yes, when it amounts to a theft or significant loss: written notice to the DEA Field Division Office within one business day of discovery, and DEA Form 106 within 45 days. Local police and your state board often require notification too.

Diversion is where every control gets tested

Drug diversion is not a single risk you can solve with one fix — it is what happens when access, records, witnessing, personnel screening, or reporting has a gap. Strengthening each layer is what makes a practice both hard to divert from and able to show the DEA it did everything required. Work through our DEA inspection checklist for veterinary practices to find your gaps, and read DEA Form 106 for the reporting mechanics.

When you’re ready to put real controls in place, the Vet Compliance HQ DEA Controlled Substance Compliance System gives you the access SOPs, reconciliation logs, witnessing procedures, staff training records, and a written diversion-response plan to do it.

Vet Compliance HQ provides educational compliance resources for veterinary practices. This article is not legal advice. DEA and state requirements change and vary by state — verify current requirements with the DEA and your state veterinary board.