Impact Healthcare

Understanding the National Drug Code (NDC): A Pillar of Drug Identification and Regulation

The National Drug Code (NDC) is an 11-digit number that plays a crucial role in identifying and reporting drugs to the U.S. Food and Drug Administration (FDA). It is the FDA’s primary identifier for drugs distributed in the United States, used by manufacturers, healthcare providers, and regulatory agencies. The NDC not only enhances the traceability of drugs but also ensures that critical information about the product’s manufacturer, formulation, and packaging is available. According to the FDA, the NDC system helps maintain a robust drug regulatory framework, supporting everything from drug approval processes to safety monitoring. The NDC system helps ensure that even FDA-approved Indian drug manufacturers comply with the drug approval processes in the U.S., enhancing global regulatory frameworks.

The NDC number is composed of three segments. The first five digits identify the labeler (manufacturer, repackager, or distributor), the next four digits represent the product’s strength, dosage form, and formulation, and the final two digits indicate the package size and type. This structured format simplifies the tracking and management of a vast number of drugs across different stages of their life cycles. These codes are published in the FDA’s NDC Directory, which is updated daily to reflect the current market landscape.

Structure of the National Drug Code (NDC)

The NDC number is composed of three key segments, each serving a distinct purpose:

  1. Labeler Code

 This first segment, consisting of five digits, identifies the entity responsible for the drug. It could be a manufacturer, repackager, or distributor. The FDA assigns this segment, and it represents the organization behind the product.Many drugs manufacturers in India have to adhere to these NDC standards when exporting to the U.S. market, ensuring proper tracking and identification.

infographic of NDC code explain

  1. Product Code

The middle segment comprises four digits and describes the strength, dosage form, and formulation of the drug. It provides crucial information about what the drug is, such as whether it is a tablet, injection, or topical ointment, as well as its potency.

  1. Package Code

The final two digits identify the packaging size and type. This helps with inventory control and ensures that different package sizes (such as a bottle of 30 tablets versus a bottle of 100 tablets) are easily distinguishable in the supply chain.

The FDA requires that all drug establishments report their products using this NDC code system. This information is critical not only for regulatory compliance but also for healthcare providers, pharmacists, and insurers who rely on accurate drug identification.

Importance of the NDC Number in Healthcare and Pharmaceuticals

The NDC number serves as an essential tool in the healthcare system, ensuring proper identification of drugs at every step, from production to consumption. Its primary functions include:

graphic of NDC code explain

Ensuring Drug Safety

By assigning a unique NDC code to each drug, the FDA ensures that healthcare providers can accurately identify the drug, reducing the risk of medication errors. The code also aids in tracking adverse reactions and recalls.

Facilitating Insurance Reimbursement

The NDC number plays a key role in billing and insurance claims. Medicare, Medicaid, and private insurance providers require accurate NDC information to process claims and determine coverage. An incorrect NDC number can lead to claim rejections or delays.

Supporting Drug Manufacturing and Distribution

Manufacturers use the NDC code to manage production lines and distribution networks. Many of the top 10 pharmaceutical companies in India use the NDC number to streamline their manufacturing and distribution processes. The code helps keep track of inventory, ensuring that products are labeled correctly and that expired drugs are swiftly removed from circulation.

The NDC Directory: A Comprehensive Drug Database

The NDC Directory is a publicly accessible database maintained by the FDA that contains information about finished, unfinished, and compounded drug products. This directory allows healthcare providers, regulatory agencies, and the public to access comprehensive information on drug products, including those awaiting FDA approval.

putting tablet box in shelf

Finished Drug Products

Manufacturers are required to report all finished drug products to the FDA, which includes over-the-counter and prescription medications. These products are listed in the NDC Directory, ensuring transparency about what drugs are available on the market. The NDC number for finished drugs is included in the directory, along with details about the labeler, formulation, and packaging.

Unfinished Drugs and Active Pharmaceutical Ingredients (APIs)

In addition to finished products, the NDC Directory also includes information on unfinished drugs, such as active pharmaceutical ingredients (APIs). These are substances that require further processing before they can be used as finished drugs. Manufacturers and distributors of APIs must also provide their product information to the FDA, ensuring that all drugs, whether finished or unfinished, are traceable through their NDC number.

Compounded Drug Products

Compounded drugs, which are customized medications prepared by pharmacists or outsourcing facilities, are also listed in the NDC Directory. These facilities may voluntarily assign NDC codes to their products, although it is not a regulatory requirement. The NDC Directory includes compounded drugs reported under the category “Outsourcing Facility Compounded Human Drug Product (Exempt from Approval Requirements).”

Outsourcing facilities, regulated under Section 503B of the Food, Drug, and Cosmetic (FD&C) Act, must report their compounded products to the FDA every six months. The FDA updates the NDC Directory with this information, making it a reliable resource for verifying the legitimacy of compounded drug products.

Using the 11-Digit NDC Lookup Tool

The FDA’s 11-digit NDC lookup tool allows users to search for drug products by their NDC number. This tool is especially useful for healthcare providers, pharmacies, and insurers who need to verify drug information quickly. Healthcare providers can use the lookup tool to verify drug information, an important step in what is pharmacovigilance to monitor adverse effects.The NDC lookup tool enables users to:

  • Verify Drug Information: Users can confirm the labeler, product strength, formulation, and packaging details of a drug using its NDC code.
  • Check Drug Availability: The tool also provides information on whether a drug is currently on the market or has been discontinued.
  • Access Drug Histories: The NDC lookup tool contains historical data on drugs, including changes in their formulation, packaging, or labeler information over time.

Digit-NDC code on bottle

Critical Considerations for the National Drug Code System

While the NDC number is a valuable tool for drug identification, there are important limitations to understand. Maintaining data integrity in pharma is crucial for accurate drug tracking, and the NDC system helps ensure that no errors compromise patient safety.Assignment of an NDC code does not imply FDA approval of a product. In fact, the FDA emphasizes that the presence of an NDC number does not automatically mean that the drug is approved for safety and efficacy. Some unapproved drugs and compounded products may have NDC codes, which can be misleading to consumers for healthcare providers who might assume FDA approval.

Another key consideration is that the inclusion of a drug in the NDC Directory does not necessarily mean that it qualifies for reimbursement by Medicare, Medicaid, or other payers. Healthcare providers and patients must verify with insurance companies whether a particular drug is covered based on its NDC number.

Updating the NDC Directory

Manufacturers, outsourcing facilities, and other entities responsible for drug production are responsible for ensuring the accuracy of the data submitted to the NDC Directory. The FDA’s role is to publish this data, but the agency does not alter the information submitted by the companies. Instead, the FDA monitors the accuracy and integrity of the listing data through its compliance program. Manufacturers must submit new or updated information through Structured Product Labeling (SPL) files.

In cases where an outsourcing facility produces compounded drugs, they are required to report their products to the FDA twice a year. This ensures that the NDC Directory remains up to date with the latest product listings and any changes to existing entries.

putting tablet box in shelf

Conclusion: The Essential Role of the National Drug Code in Healthcare

The National Drug Code (NDC) is a critical tool in ensuring the safety, traceability, and regulation of drugs in the United States. By providing a unique identifier for every drug, the NDC number helps healthcare providers, manufacturers, and regulators maintain accurate records, streamline distribution, and safeguard patient safety. Whether it’s verifying the legitimacy of a drug or ensuring that it is correctly billed to insurance providers, the NDC code plays an indispensable role in modern healthcare.

For anyone involved in the pharmaceutical industry or healthcare, understanding the NDC number system and utilizing the 11-digit NDC lookup tool is essential for navigating the complexities of drug identification and regulation. While the NDC code offers significant benefits, it is important to remain aware of its limitations, particularly in terms of FDA approval and insurance reimbursement. With its continually updated database, the NDC Directory remains a vital resource for ensuring that drug products are accurately identified and regulated across the United States.

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