Regulatory & Compliance

What is NDC (National Drug Code)?

A unique 11-digit identifier assigned to each medication in the United States, following the 5-4-2 format: 5 digits for the labeler (manufacturer), 4 digits for the product (strength, dosage form), and 2 digits for the package size. Required on all prescription drug labels by the FDA.

The National Drug Code (NDC) is the universal product identifier for human drugs in the United States. Established under the Drug Listing Act of 1972, NDCs are administered by the FDA and serve as the primary reference for drug identification in pharmacy operations, billing, and regulatory compliance.

NDC Format: The 5-4-2 Structure

Every NDC consists of three segments totaling 10 or 11 digits:

SegmentDigitsIdentifies
Labeler Code5The manufacturer, repackager, or distributor
Product Code4The specific drug, strength, and dosage form
Package Code2The package size and type

Example: NDC 00093-0058-01

  • 00093 = Teva Pharmaceuticals (labeler)
  • 0058 = Hydrochlorothiazide 25mg tablets (product)
  • 01 = 100-count bottle (package)

Why NDCs Matter for Pharmacy Billing

NDCs are the foundation of pharmacy billing. Every claim submitted to a PBM includes the NDC of the dispensed product. Mismatches between the billed NDC and the purchased NDC create reconciliation discrepancies and can trigger claim rejections.

Common NDC Issues

  • Format variations: Some systems use 10-digit NDCs while billing requires 11-digit format (with leading zeros)
  • Discontinued NDCs: When manufacturers discontinue products, old NDCs may persist in billing systems
  • Repackager codes: Repackaged drugs receive new NDCs even though the product is identical

Related Terms

NDC Swap(NDC)

When the same medication is billed under different National Drug Code (NDC) numbers in billing versus purchasing data, typically caused by manufacturer changes, wholesaler substitutions, or repackaging. NDC swaps create phantom shortages and surpluses that silently drain revenue.

Labeler Code

The first 5 digits of a National Drug Code (NDC) that identify the manufacturer, repackager, or distributor of the drug. Assigned by the FDA. Each labeler receives a unique code; changes in labeler codes are a primary cause of NDC swaps during reconciliation.

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