Perspectives

The Pending NDC and Barcode Rule: Manufacturers’ Perspectives

By Tim Stearns, Senior Director, Industry Relations, HDA

In the next 10 to 15 years, and possibly sooner, the Food and Drug Administration (FDA) estimates it will run out of the five-digit labeler codes used to identify a product’s manufacturer in the labeler portion of the three-segment structure of the National Drug Code (NDC).¹ Accordingly, the FDA has proposed an amendment to its regulations to adopt a uniform, 12-digit format for the NDC, with a six-digit labeler code, four-digit product code and two-digit package code. The proposed rule would also allow the use of either linear or nonlinear barcodes — so long as the barcode meets certain conditions. FDA is also considering adding language to include other data carriers aside from barcodes, such as RFID.

Once the new rule goes into effect, the FDA has proposed a five-year time frame allowing companies to prepare for adherence to the new NDC, with a three-year transition period following. According to the Office of Management and Budget’s Fall 2022 Unified Agenda of Regulatory and Deregulatory Actions, which reports on the actions of administrative agencies, FDA is projecting a January 2024 publication of the final NDC rule. If FDA’s projected date holds true, the ultimate deadline for the industry to update their systems would occur in 2032. 

Given the enormity of the NDC update for the industry — some are likening it to a “Y2K”-like change — HDA is launching a quarterly blog series to unpack key issues for supply chain stakeholders, with the goal of helping companies better understand and ultimately prepare for these changes. Throughout the series, we will assess and analyze comments from other members of the supply chain, while beginning to explore how changes might be implemented.

In 2022, the agency asked for comments regarding the use of “other unspecified automatic identification and data capture formats other than linear and non-linear barcodes”— the idea being that including such language now would make use of other future technologies feasible without further regulatory revisions. Nearly 50 comments were submitted to the agency. A summary of manufacturers’ comments follows.
 

Assessing Manufacturer Comments to the NDC Proposed Rule

Manufacturer-aligned associations and their members recognize the need to increase labeler code capacity. They would generally like FDA to provide a five-year transition period due to the sheer number of products that would require relabeling, and the fact that some products have longer expiration dating. Some in the manufacturing community have even suggested going to a seven-digit labeler code to help ensure capacity well into the future. 

Companies further urged the agency to coordinate with the Centers for Medicare and Medicaid Services (CMS) to prevent any potential delays in reimbursement due to the NDC conversion effort. Most commenters also appear to oppose FDA automatically updating the NDC listing databases as proposed in the preamble, arguing that manufacturer updated product labeling launches should drive drug listing updates. Additionally, they would like to see the FDA delay the final rule until well after the Drug Supply Chain Security Act’s (DSCSA) enhanced drug distribution requirements have gone into effect, foreseeing the burden of maintaining a parallel effort on both the DSCSA and the NDC/barcode rule. 

Regarding the barcode rule, some manufacturers suggested more specific language than simply allowing non-linear barcodes. The suggestion of increasing the middle product segment was mentioned to slow the consumption of labeler codes. Numerous manufacturer-aligned entities also sought delay, waiver and exemption provisions in their comments.

Beyond all this, manufacturer comments expressed concern about having ample time for a transition period, as this could impact drug availability if product still on the market must be withdrawn for either relabeling or destruction. This is especially true for generic drug manufacturers given that over 90 percent of drug products on the market are generics.

Manufacturers also will need to use a different mechanism to assign Global Trade Item Numbers (GTINs) since the NDC will have outgrown the ability to be embedded in a GTIN when a new 6-4-2 NDC is introduced into commerce. Manufacturer associations and members also have asked the FDA to consider doing away with dashes given the move to a fixed 6-4-2 NDC syntax.

The next post in this series will look at the comments posted by the wholesale distributor segment of the healthcare sector impacted by the proposed NDC change.

Tim Stearns is HDA’s Senior Director, Industry Relations. He is focused on helping HDA members and industry stakeholders prepare for critical legislative mandates such as the NDC and DSCSA. For additional information or questions email tstearns@hda.org.
 
1. For those in need of a quick review of background information concerning the NDC, FDA has created a site with background on the NDC database as well as a helpful history of the NDC.