A recent analysis by the HHS Office of the Inspector General (OIG) found that some 34,000 of the 120,000 drugs listed in FDA's
National Drug Code Directory no longer exist, and that 9,000 marketed drugs are not on the list. In August, OIG urged FDA
to fix the system, and FDA responded a few days later by unveiling a massive proposed rule to overhaul the program. Developing
an accurate and complete electronic drug registration and listing process has been "a high priority for several years," points
out FDA deputy commissioner Janet Woodcock.
The proposed regulation requires manufacturers, repackagers, relabelers, and drug-product salvagers to submit electronically
to FDA information on facility location and which drugs they produce. This will support FDA efforts to identify facilities
for inspection, levy user fees, monitor adverse events and uncover alternative sources of needed medicines to counter bioterrorism
attacks and handle emergencies.
Manufacturers will have to register each establishment within five days of beginning operations, and all foreign manufacturers
will have to register and provide information on a US agent and on importers for each drug made for the US market. All registrants
will have to update information on facilities and listed drugs whenever there is a change, and every June and December they
will have to confirm that they have reviewed the information and that it remains up to date, notes Michael Bernstein of the
Office of Regulatory Policy in the Center for Drug Evaluation and Research. Overall, FDA says the benefits justify implementation
costs, which it estimates will be about $5.6 to $5.8 million a year.
To achieve these gains, the new policy makes an important change in the NDC numbering process. The coding system was created
in 1969 to facilitate automated processing of drug data by government agencies, hospitals, insurance companies, and drug manufacturers
and distributors. Now accurate product codes are essential for claims processing and multiple regulatory and information functions,
such as e-prescribing and adverse-event tracking. Pharmaceutical companies also need accurate NDC codes for proper reimbursement
by Medicare and Medicaid, as well as private payers, Woodcock notes.
FDA proposes to assign the full NDC numbers for drug products, instead of relying on manufacturers to submit code numbers
to the agency. FDA now assigns only the labeler code, the first segment of the 10-digit code, and manufacturers add their
own product and package numbers. Unfortunately companies make coding errors, re-use NDC numbers from discontinued products,
and make changes to a drug without updating the code.
Control over NDC numbers is key to ensuring accurate drug listings. In order to get an NDC for a new drug or dosage form,
the manufacturer will have to provide all the required listing information: company name, drug name and category, package
size and type, drug master-file number (for active ingredients), active and inactive ingredients, dosage form, and any product
FDA plans to assign "unique and unambiguous" codes prospectively to new products; manufacturers may retain current numbers,
provided they comply with the new rules. The agency considered a proposal to completely reassign all existing NDC numbers,
but decided not to because it would cost almost $1 billion to implement and require major changes in data processing systems
at manufacturers, pharmacy benefit managers, and other information users.
Conversion to an electronic system also supports broader FDA efforts to ensure drug safety and quality. By scanning a product's
bar code, patients and providers will be able to call up the latest drug labeling and safety information, avoiding prescribing
and dispensing errors in the process.
Public disclosure of all this information, however, could reveal data that pharma companies might prefer to keep confidential,
such as plant locations, active ingredient amounts, excipients, and names of foreign company agents. FDA says it may agree
to non-disclosure of some trade secret data, but that there are important reasons to permit access to most of the required
For example, FDA wants data on a drug's dosage form to distinguish tablets from, say, capsules. A box with 12 unit-of-use
blisters would have a different code for each individual blister, a distinction that could enhance the accuracy and value
of bar codes and thus reduce medication errors. Patients with allergies would have access to needed information about excipients.
And information on tablet imprints could help FDA investigate reports of counterfeiting and adverse events.