Q&A: 12-Digit NDC Transition Poses Industry-Wide Compliance Challenges

Because of the increased number of products in the supply chain, FDA is giving the pharmacy industry approximately 7 years to overhaul how it identifies and tracks every national drug code (NDC) on the market. Amid the industry-wide shift to 12-digit NDCs, experts warn all supply chain entities to be proactive about facilitating this transition well before the 7 years are up.

“We only have 7 years of runway to implement and solve this problem. I don't think the risk that organizations are going to face are going to be in the end state; it's going to be in the transition,” Neal Cooper, vice president of regulatory affairs and quality systems at American Health Packaging, told Drug Topics. “If industry and companies underestimate how impactful this could be and delay starting the project and the work, it's going to be a significant issue for them to solve down the road.”

In part 2 of our interview with the duo, Cooper was joined by colleague Matt Sample, senior vice president of manufacturer, quality, and replenishment operations at Cencora. They explored some of the nuanced challenges various supply chain entities may encounter throughout the next few years as FDA continues to enforce and encourage this transition.

With many questions still need to be answered, this shift is going to be one of the most monumental and challenging drug supply chain actions in recent pharmaceutical history.

READ MORE: Pharmacists Must Prepare for FDA’s 12-Digit NDC Update

Drug Topics: The FDA has established a 7-year preparation period before the 12-digit NDC format becomes mandatory. What specific steps should pharmacy leadership take now to ensure their systems and infrastructure are fully updated by the effective date?

Matt Sample: I think they need to reach out to their wholesaler or their primary conduit to the drug supply chain and make sure that those wholesalers are engaging in those conversations. The second, if they are part of industry groups or if they're part of a co-op, see what types of efforts those industry groups or trade groups are doing to become part of the ‘coalition of the willing,’ if you will. The requirement is simple: All of our systems need to be able to support a 10-, 11-, and a 12-digit NDC code at the same time.

The problem is, what does that standard look like that we all would implement? We need our trade groups and we need these industry groups to get together. It's bigger than DSCSA; DSCSA you have the wholesalers and manufacturers driving it. Now, you have to get into the payers, the providers, the PBMs. And again, the best way to do that probably is through the trade group.

The pharmacy entities need to be trying to do whatever they can with whatever context they have to say, ‘Hey, NCPDP, are you doing something in this space? NACDS, are you guys talking to the payer-provider trade groups about how to do this?’ Because the FDA's not going to come out and publish a how-to guide. They're not going to publish standards. It's going to be up to the industry. Unlike DSCSA, where the industry was relatively simple—manufacturer, wholesaler, dispenser—this thing's huge.

Neal Cooper: Yeah, it's way bigger than DSCSA from an impact standpoint.

Drug Topics: Drugs labeled with 10-digit NDCs that enter commerce after March 7, 2036, may be subject to regulatory action. What inventory management strategies will be necessary to ensure that older 10-digit stock is depleted or managed appropriately before this final deadline?

Neal Cooper: This is good news, bad news here. The good news is that we have a 7-year runway to implement this and fix this problem. The bad news is that we only have 7 years of runway to implement and solve this problem. DSCSA took a lot longer than 7 years. So, I don't think the risk that organizations are going to face are going to be in the end state; it's going to be in the transition. If industry and companies underestimate how impactful this could be and delay starting the project and the work, it's going to be a significant issue for them to solve down the road.

There’s going to be a time where we have transition of both 10-digit NDC product and 12-digit NDC product for the same exact material in the marketplace because of expiration dates and the rollout of this. Those systems need to be able to handle both of those and know the difference when it comes to managing inventory and administration to patients. If manufacturers and distributors and pharmacies don't get ahead of it, it can be dangerous.

Matt Sample: The manufacturers, I joke, they have the easiest job. You have to plan out your label revisions and then you'll make the change. What worries me is they give you this 3-year phase-in window. Using DSCSA data, it's a great source of information. I think 25% of all the products on my shelves expire in 4 or 5 years. If you have something sitting there the day before the phase-in period that's still got 4 years’ dating left, what happens to those products? Because they may not get used in that 3-year phase-in.

This is where we do need to engage—‘we’ being the collective industry—with the FDA. Do we want to be in the mode of taking drugs off the market or out of the market if, after 3 years of phasing in this new 12-digit, they still have the 10? There's a lot of open questions about that. It is going to be very challenging because you've got 500 prescription drug manufacturers on different schedules.

If we all don't get our systems able to handle the 10, 11, or 12, it's going to be hodgepodge. The manufacturers that are [ahead], their products may still flow; some of the smaller generics may not. Those are the concerns: How do you synchronize this whole industry to keep product moving and then also not throw product away when you have this 4- or 5-year dating?

Neal Cooper: To Matt's point, as a manufacturer—I won't say that we have it the easiest—but we're sort of the first link in that chain. We're going to have to solve for this probably more quickly than some of the downstream partners are. We may be having to update packaging lines, update all of our systems from an inventory management perspective, certainly. Then, that has to trickle down through all the distribution channels.

FDA, at this point, has put forth the requirement; they've given us the guardrails. What [the] collective industry, including pharmacies, need to do now is ask for some guidance as to how FDA is going to help us. Are we going to have a phased approach where manufacturers have to go by a certain date, distributors have to go by a little bit later date? Those are the pieces that we just don't know right now.

The only thing we have are the 2033 [and] 2036 dates that are out there. We're going to have to get some extra information from FDA on this. And what does regulatory action mean? To Matt's point, we have 25% of our products in the marketplace. Are they going to remove them? Is it considered misbranded or adulterated in some capacity from an FDA perspective because of the NDC number differences? I think we just don't know that, and FDA's going to have to help us out a little bit; figure [out] what that means.

READ MORE: DSCSA Compliance Updates for Independent Pharmacies in 2026

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