In the pharmaceutical supply chain, a single mistake can have massive consequences. A picking error can lead to incorrect shipments, a compliance oversight can result in hefty fines, and a slow response to a recall can put patients at risk. The key to preventing these issues isn’t a complex, sprawling system, but a simple, standardized code: the National Drug Code (NDC). This unique 10-digit number is the foundation of a secure and efficient operation. So, what is an NDC in inventory control? It’s the universal identifier that ensures accuracy, enables traceability, and brings order to the complexity of managing life-critical products from the factory to the pharmacy.
Key Takeaways
- Treat the NDC as a universal standard: This unique code provides a single, unambiguous identifier for every drug product, creating clarity for all partners in the supply chain and forming the foundation for accurate tracking.
- Integrate NDCs into a central system for operational control: By using NDCs as the core identifier within a unified ERP, you can automate inventory management, eliminate costly shipping and billing errors, and gain real-time visibility across your entire operation.
- Build your compliance strategy around NDC data: A modern, pharma-specific ERP uses NDC information to automate DSCSA traceability and reporting, helping you stay ahead of regulatory changes and build a scalable foundation for future growth.
What is an NDC Number?
Think of the National Drug Code (NDC) as a universal product code for human drugs in the United States. It’s a unique, three-segment number that acts as a standard identifier for every drug product, from the manufacturer’s facility all the way to the pharmacy shelf. This simple 10-digit code is the backbone of pharmaceutical tracking, making it possible to identify a specific drug’s labeler, product, and package size in a single glance.
For anyone working in the pharmaceutical supply chain, understanding NDCs is non-negotiable. They are essential for everything from inventory management and order processing to regulatory reporting and billing. Without a standardized system like the NDC, tracking millions of drug products would be chaotic and prone to error. The NDC brings order to this complexity, ensuring that every stakeholder—whether a manufacturer, distributor, or dispenser—is speaking the same language when it comes to product identification. This shared understanding is critical for maintaining an efficient, safe, and compliant supply chain.
The Three-Segment Structure
Every NDC number is broken down into three distinct parts, each providing a specific piece of information. This structure makes it easy to quickly identify key details about any drug product.
- Labeler Code: This is the first segment, typically five digits long. It identifies the company that manufactures, repacks, or distributes the drug. The Food and Drug Administration (FDA) assigns this code to each company.
- Product Code: The second segment consists of four digits and identifies the specific drug, including its strength, dosage form, and formulation. The company assigns this code.
- Package Code: The final, two-digit segment identifies the package sizes and types. The company also assigns this code.
Together, these three segments create a unique identifier for each specific drug product on the market.
The FDA’s Role in Assigning NDCs
The FDA is central to the NDC system. Under the Drug Listing Act of 1972, drug establishments are required to provide the FDA with a current list of all drugs they manufacture for commercial distribution. While the FDA assigns the labeler code to a company, it’s the company’s responsibility to assign the product and package codes for each of its drugs.
It’s important to remember that the existence of an NDC number on a product doesn’t mean the drug has been approved by the FDA. It simply means the product has been listed with the agency. This listing is a crucial step for regulatory compliance and is a prerequisite for introducing a drug into the commercial market.
How NDCs Are Used Across Industries
The NDC is more than just a number; it’s a vital tool used across the entire healthcare landscape. In the pharmaceutical supply chain, NDCs are fundamental to traceability. They allow companies to track products from the factory to the pharmacy, which is a core requirement of the Drug Supply Chain Security Act (DSCSA). This helps manage inventory levels, prevent drug shortages, and efficiently handle recalls.
Beyond logistics, NDCs are critical for healthcare providers and payers. They are used on insurance claims to ensure accurate billing and reimbursement for medications. Pharmacies rely on them to verify prescriptions and manage stock, while hospitals use them in their electronic health record (EHR) systems to ensure patient safety. The NDC provides a consistent identifier that supports accuracy and efficiency at every step.
How the NDC System Works in Pharmaceuticals
Think of a National Drug Code (NDC) as a product’s social security number. This unique 10-digit code, found on most drug packages, gives you a clear, standardized way to identify any drug in the U.S. market. It’s broken down into three distinct segments, each telling you a piece of the product’s story: who made it, what it is, and how it’s packaged. Understanding this structure is the first step to using NDCs effectively in your inventory and compliance workflows. Let’s break down what each part means for your operations.
What is the Labeler Code?
The first segment of the NDC is the Labeler Code. This is a five-digit number assigned by the FDA that identifies the company responsible for the drug. This could be the manufacturer, repacker, or distributor—essentially, the firm that brings the product to market. Think of it as the “who” in the product’s story. For distributors and 3PLs, this code is essential for verifying the origin of a product and ensuring it comes from a legitimate source. Having a clear view of the companies you serve and their associated Labeler Codes is fundamental to maintaining a secure and transparent supply chain.
What is the Product Code?
Next up is the Product Code. This four- or five-digit segment is the “what” of the NDC. It identifies the specific drug, including its strength, dosage form (like a tablet, capsule, or liquid), and formulation. The labeler assigns this code, so it’s unique to their product line. For example, two different strengths of the same medication will have two different Product Codes. This level of detail is crucial for preventing mix-ups during picking and packing and for ensuring precise tracking. A robust serialized ERP system relies on this code to trace individual units from production to the pharmacy shelf, ensuring accuracy at every step.
What is the Package Code?
The final piece of the puzzle is the Package Code. This one- or two-digit segment tells you “how” the drug is packaged. It specifies the package size and type, such as a 30-count bottle, a 90-count bottle, or a single-dose blister pack. The labeler also assigns this code. For anyone managing stock, this information is non-negotiable. It allows you to differentiate between bulk containers and individual units, which is vital for accurate counts, order fulfillment, and overall inventory management. Without it, you could easily end up with costly discrepancies and stocking issues.
Common NDC Format Variations
While the three-segment structure is consistent, you’ll see NDCs in a few different 10-digit formats, like 5-4-1 or 5-3-2, depending on the length of each code. However, the FDA is moving to standardize this. The agency has proposed a transition to a universal 12-digit format using a 6-4-2 structure. This change aims to create a single, unambiguous system for identifying drugs. For pharmaceutical companies, staying on top of this shift is a key part of your compliance strategy. Preparing your systems now will ensure a smooth transition and prevent any disruptions to your operations or reporting down the line.
Why NDCs Are Critical for Inventory Control
In the pharmaceutical world, managing your inventory isn’t just about counting boxes—it’s about precision, safety, and compliance. National Drug Codes (NDCs) are the foundation of a strong inventory control system. They provide the unique identification needed to track every single product with confidence. By leveraging NDCs effectively, you can transform your warehouse operations from a source of stress into a strategic asset. A robust system built around NDCs helps you maintain accurate records, ensure product integrity, and keep your supply chain moving smoothly and efficiently. This level of control is essential for meeting regulatory demands and protecting both your business and the patients who depend on your products.
Ensure Accurate Product Identification
At its core, an NDC is a unique fingerprint for a specific drug, dosage, and package size. This level of detail is crucial for preventing mix-ups between products that might have similar names or packaging. When your team can scan a barcode and instantly confirm they have the right item, you eliminate a huge source of potential errors. This accuracy is the bedrock of effective inventory management, ensuring that every transaction—from receiving to shipping—is correct. It means you can trust your data, make better purchasing decisions, and maintain a clear, real-time picture of every single item in your facility. Without this precise identification, true inventory control is nearly impossible to achieve.
Improve Supply Chain Traceability
Tracking a product from the manufacturing line all the way to the pharmacy shelf is a massive undertaking, but NDCs make it manageable. Each code serves as a consistent identifier that every partner in the supply chain can use. This shared language is essential for meeting the track-and-trace requirements of the Drug Supply Chain Security Act (DSCSA). By associating every transaction with an NDC, you create a clear, auditable history for each product. This traceability not only helps you comply with DSCSA regulations but also gives you complete visibility into your supply chain, helping you pinpoint bottlenecks, reduce waste, and respond quickly to any issues that arise.
Prevent Costly Errors
A simple picking error in a pharmaceutical warehouse can have serious consequences, leading to incorrect shipments, customer complaints, and even patient safety risks. Using NDCs as part of a barcode-scanning verification process dramatically reduces the chance of human error. It ensures the right product is picked for the right order, every time. This simple step prevents the significant costs associated with correcting mistakes, such as processing returns, handling reshipments, and managing customer dissatisfaction. More importantly, it protects your company’s reputation and reinforces your commitment to quality and compliance, which is invaluable in the highly regulated pharmaceutical industry.
Strengthen Quality Assurance
When a quality issue or recall occurs, you need to act fast. NDCs are vital for quickly identifying and isolating affected products. By linking NDCs to specific lot numbers in your inventory system, you can instantly locate every unit of a compromised batch, whether it’s in your warehouse or already shipped to a customer. This targeted approach makes recalls more efficient and less disruptive to your overall operations. Furthermore, the data tied to NDCs can be analyzed to spot trends, helping your quality assurance team proactively identify potential issues. Using business intelligence analytics on this data allows you to maintain higher standards and continuously improve your processes.
Enable Real-Time Inventory Tracking
Guesswork has no place in modern inventory management. NDCs are the key that enables automated, real-time tracking of your stock. As products are received, moved, picked, and shipped, a quick scan of the NDC barcode updates your central ERP system instantly. This gives you an accurate, up-to-the-minute view of stock levels across all your locations. With real-time data, you can avoid stockouts that lead to lost sales and prevent overstocking that ties up valuable capital. This level of visibility allows for smarter forecasting, more efficient use of warehouse space, and a more agile response to changes in demand, keeping your entire operation lean and effective.
Simplify Expiration Date Management
Managing expired products is a major challenge that can lead to significant financial losses. While the NDC itself doesn’t include an expiration date, it is the primary link to lot numbers, which do. A modern inventory system uses the NDC to track each lot and its corresponding expiration date. This allows you to implement a First-Expired, First-Out (FEFO) picking strategy, ensuring that products with the shortest shelf life are sold first. Automating this process minimizes the risk of products expiring on your shelves, reducing waste and protecting your revenue. This proactive approach to expiration management is a key component of strong financial automation and operational health.
How NDCs Help You Stay Compliant
In the pharmaceutical industry, compliance isn’t just a box to check—it’s a fundamental part of your license to operate. National Drug Codes are at the heart of this complex landscape. Think of the NDC as a universal language for regulators, payers, and supply chain partners. Using it correctly is non-negotiable for maintaining good standing and ensuring your operations run smoothly. From federal mandates to state-level reporting and even financial reimbursements, the NDC is the key identifier that connects your products to a web of regulatory requirements. Leveraging this simple code effectively can transform compliance from a constant headache into a streamlined, manageable process.
Meeting DSCSA Requirements
The Drug Supply Chain Security Act (DSCSA) transformed how the industry tracks products, and NDCs are central to its framework. The act requires an electronic, interoperable system to identify and trace prescription drugs as they move through the U.S. This is achieved through serialization—assigning a unique identifier to each saleable unit. The NDC serves as the foundation of this serial number, identifying the specific product to which the unique serial code is attached. A robust serialized ERP system uses this NDC-based data to automate tracking and tracing, creating the digital pedigree that DSCSA mandates. This ensures you can verify product legitimacy at any point, protecting both your business and patients from counterfeit or diverted drugs.
Simplifying FDA Reporting
The FDA manages the entire NDC system, so it’s no surprise that the code is essential for all your reporting. When you register a new drug, submit adverse event reports, or update product listings, the NDC is the primary identifier the agency uses. This standardization eliminates confusion and reduces the risk of errors that can arise from using internal product names or SKUs. By using the official NDC in all communications, you ensure the FDA has a clear, unambiguous record of your products. This simplifies the entire reporting process, making it faster and more accurate, which is critical when dealing with regulatory deadlines and submissions.
Adhering to State-Level Regulations
While the DSCSA is a federal law, compliance doesn’t stop there. Many states have their own specific reporting requirements, particularly for controlled substances and participation in Prescription Drug Monitoring Programs (PDMPs). NDCs provide a consistent identifier that works across all state lines, simplifying compliance for companies operating nationally. Whether you’re reporting to California’s Board of Pharmacy or New York’s Bureau of Narcotic Enforcement, the NDC ensures your product is identified correctly. This uniformity is crucial for maintaining your licenses and meeting the diverse requirements of each state you do business in, a task made easier with dedicated compliance tools.
Managing Documentation Requirements
The pharmaceutical industry is built on documentation. For every batch of product, you have certificates of analysis, transaction histories, and quality control records. The NDC acts as the central filing key for all of it. When an auditor asks for the full history of a specific product, the NDC is your starting point. It allows you to quickly locate and assemble all relevant documentation, proving a product’s integrity and history. Effective inventory management systems use NDCs to link every document to the right product, turning what could be a frantic search through records into a simple, organized query. This capability is invaluable during audits, recalls, or internal quality checks.
Streamlining Billing and Claims
Compliance extends into the financial side of your business, and NDCs are critical for getting paid. Payers like Medicare, Medicaid, and private insurance companies require NDCs on claims to identify which specific drug was administered. This ensures accurate reimbursement based on the correct product and dosage. Using the right NDC prevents claim denials, which can cause significant payment delays and revenue shortfalls. For manufacturers, ensuring your NDCs are correctly listed with payers is a vital step in the commercialization process. Integrating this data with your financial automation systems helps ensure a smooth revenue cycle and reduces the administrative burden of correcting billing errors.
Solve Common NDC Challenges
NDCs are the backbone of pharmaceutical inventory control, but managing them effectively comes with its own set of hurdles. From inconsistent data formats across partners to outdated software that can’t keep up with regulations, these challenges can lead to serious compliance risks, operational slowdowns, and costly errors. Many companies find themselves juggling multiple systems—a separate WMS, a CRM, and endless spreadsheets—creating data silos that make a single, accurate view of inventory nearly impossible. The good news is that these problems are entirely solvable with the right strategies and tools.
Instead of patching together different systems, a unified approach can streamline your entire process. By focusing on standardizing your data, integrating your technology, and empowering your team, you can turn NDC management from a daily headache into a competitive advantage. This section will walk you through the most common challenges and provide clear, actionable steps to overcome them. We’ll cover everything from data standardization to system integration, helping you build a resilient and efficient inventory control system. A purpose-built serialized ERP is designed to address these issues head-on, providing a single platform to manage everything from traceability and compliance to financials and customer relationships.
Overcoming Data Standardization Issues
Inconsistent data is one of the biggest roadblocks in NDC management. You might receive data in different formats from various manufacturers and distributors, leading to confusion and errors in your system. To fix this, you need to establish a single source of truth. This starts with creating clear data entry protocols for your team and using a centralized platform that enforces a standard format for all NDC information. By standardizing your data, you create a clean, reliable foundation for all your inventory activities, from receiving to fulfillment. This makes your business intelligence analytics more accurate and actionable, allowing you to make smarter decisions based on data you can trust.
Integrating Your Systems Seamlessly
When your inventory management system doesn’t talk to your sales, accounting, or shipping software, you’re operating with blind spots. This lack of integration can lead to stockouts, overstocking, and fulfillment delays. A robust inventory system should provide full visibility across the entire supply chain by connecting all your operational tools. A unified platform like a serialized ERP eliminates these data silos. It brings your WMS, CRM, and financial tools together, ensuring that when a product is scanned in the warehouse, the information is instantly available to your sales and accounting teams. This seamless flow of information reduces manual data entry, minimizes errors, and gives you a real-time view of your business.
Implementing Real-Time Tracking
Relying on periodic manual counts or batch data uploads is a recipe for inaccuracy. In the fast-moving pharmaceutical industry, you need to know exactly what you have and where it is at all times. Modern inventory management software automates stock tracking across warehouses using real-time monitoring systems. By leveraging barcode or RFID scanners tied to NDCs, you can track every item from the moment it enters your facility to the moment it leaves. This level of detail is crucial for meeting DSCSA traceability requirements and managing recalls effectively. With real-time inventory management, you can prevent stockouts, optimize storage space, and make smarter purchasing decisions based on up-to-the-minute data.
Updating Legacy Systems
Outdated, legacy systems can hold your business back. They are often difficult to use, lack modern features, and can’t keep up with evolving regulatory demands like the DSCSA. Sticking with an old system because it’s “what you’ve always used” exposes you to significant compliance risks and operational inefficiencies. Specialized ERP solutions provide essential tools like batch tracking, compliance automation, and real-time logistics visibility. Making the switch to a modern, pharma-specific ERP empowers you to cut costs, streamline operations, and ensure product integrity. It’s more than just a software update; it’s a strategic investment in your company’s ability to maintain compliance and operate efficiently.
Developing Effective Staff Training
You can have the most advanced inventory system in the world, but it won’t be effective if your team doesn’t know how to use it properly. Inconsistencies in how staff handle NDCs, process orders, or manage data can undermine your entire system. Addressing the complex challenges of inventory management requires specialized expertise and consistent training. Develop a comprehensive training program that covers your specific NDC protocols, software workflows, and compliance responsibilities. Create clear, accessible documentation and hold regular refresher sessions to keep everyone’s skills sharp. Investing in your team’s knowledge is just as important as investing in your technology. You can find helpful guides and information in our online resources.
Best Practices for Managing NDCs
Managing National Drug Codes effectively is about more than just staying organized—it’s about ensuring safety, maintaining compliance, and running an efficient operation. When your NDC system is solid, you reduce the risk of shipping errors, simplify recalls, and create a transparent supply chain. But getting there requires a clear strategy. Instead of reacting to problems, you can build a proactive system that keeps your inventory accurate and your operations smooth.
Putting the right processes in place helps you handle everything from daily order fulfillment to complex regulatory audits with confidence. Let’s walk through five essential practices that will help you master NDC management and keep your pharmaceutical inventory under control.
Use Automated Tracking Technology
Relying on manual spreadsheets or outdated systems to track NDCs is a huge risk. A single typo can lead to shipping the wrong product, causing compliance headaches and potentially endangering patients. Automated tracking technology is your best defense against these preventable errors. Modern inventory management software uses real-time monitoring to track stock across every location, from the warehouse shelf to the final destination.
Imagine a system that automatically flags low stock levels, generates purchase orders when you need them, and tracks transfers between facilities without any manual input. This isn’t just about convenience; it’s about creating a reliable, error-free workflow. By automating these crucial tasks, you free up your team to focus on more strategic work while ensuring your NDC data is always accurate and up-to-date.
Establish Clear Database Protocols
Your NDC database is the single source of truth for your entire inventory. If the data isn’t clean, consistent, and reliable, nothing else will be. That’s why establishing clear protocols is so important. Everyone on your team should follow the same procedures for entering, updating, and verifying NDC information. This includes standardizing formats and defining who is responsible for data management.
A purpose-built serialized ERP provides the tools you need to enforce these protocols. Features like batch tracking, compliance automation, and real-time logistics visibility give you a clear view of your entire supply chain. When your data is standardized and managed within one integrated system, you eliminate the confusion that comes from juggling multiple platforms and spreadsheets. This creates a foundation of trust in your data.
Implement Strong Quality Control
Strong quality control processes are your safety net, catching potential issues before they become major problems. For NDC management, this means implementing checks and balances at every stage of your workflow. From the moment a product arrives at your facility to the time it ships out, you should have procedures in place to verify that the physical product matches the NDC information in your system.
This is where an integrated system truly shines. A platform designed for the pharmaceutical industry connects your inventory, ordering, and shipping processes, providing end-to-end visibility. These built-in quality checks reduce the risk of human error, protect product integrity, and give you confidence that every shipment is accurate.
Conduct Regular System Audits
Even the best systems need a regular check-up. Conducting routine audits of your NDC management processes helps you identify and fix small inconsistencies before they escalate. An audit isn’t about finding fault; it’s about continuous improvement. This involves more than just a physical inventory count. It means comparing your system data against physical stock, reviewing transaction histories for anomalies, and ensuring your team is following established protocols.
Think of it as a health check for your inventory system. Regular audits help you confirm that your technology is working as expected and that your processes are effective. They provide valuable insights into areas where you can make your operations even more efficient and secure. By making audits a standard part of your routine, you maintain a high level of accuracy and readiness for any regulatory inspection.
Monitor for Compliance Continuously
Compliance in the pharmaceutical industry is not a one-time task—it’s an ongoing commitment. Regulations like the Drug Supply Chain Security Act (DSCSA) are constantly evolving, and staying current is essential for avoiding fines and protecting your business. Your systems and processes must be flexible enough to adapt to these changes quickly.
A modern ERP platform can help you maintain the highest standards for compliance by automating documentation and reporting. Instead of scrambling to gather information for an audit, the system can generate the necessary reports with a few clicks. It helps ensure that every transaction is tracked and documented according to DSCSA requirements, giving you a complete, verifiable history for every product. This continuous monitoring minimizes risk and keeps your operations aligned with the latest regulations.
The Role of NDCs in Daily Operations
NDCs are more than just a string of numbers for regulatory paperwork; they are the operational heartbeat of your pharmaceutical business. From the moment a product arrives at your warehouse to the second it ships out, the NDC is the key identifier that keeps everything moving smoothly. It’s the common language that connects your inventory, sales, and finance departments, ensuring everyone is on the same page. When managed correctly, NDCs transform complex processes into streamlined, predictable workflows. A purpose-built ERP system uses this code to automate tasks, reduce human error, and provide a clear view of your entire operation. By integrating NDCs into every step, you can build a more resilient, efficient, and compliant supply chain that’s ready for whatever comes next.
Streamline Inventory Management
Think of the NDC as a unique address for every drug package in your warehouse. This code allows you to track products with incredible precision as they move from the factory floor to the pharmacy shelf. By scanning the NDC, your team can instantly verify a product’s identity, dosage, and package size, virtually eliminating mix-ups. This detailed tracking helps you maintain optimal stock levels, reduce waste from expired products, and ensure you always have the right medicine available. A robust inventory management system built around NDCs gives you a real-time, accurate picture of what you have and where it is.
Optimize Order Processing
When it comes to getting paid, accuracy is everything. NDCs are essential for processing orders and submitting insurance claims because they tell payers exactly which drug was dispensed. Without the correct NDC, claims can be delayed or denied, creating cash flow problems and administrative headaches. By ensuring every order and invoice includes the right code, you can facilitate smoother transactions with customers and insurers. This is where financial automation tools become so valuable, as they can validate NDCs at the point of order entry to prevent costly billing errors down the line.
Handle Returns and Recalls with Confidence
In the event of a product recall, speed and accuracy are critical to protecting patients and your business. NDCs allow you to pinpoint exactly which products are affected, down to the specific package size. Instead of pulling all inventory for a certain drug, you can isolate the recalled batch with surgical precision. This capability is fundamental to modern pharmaceutical compliance and risk management. It minimizes disruption to your supply chain, reduces financial losses, and, most importantly, demonstrates a commitment to patient safety by enabling a swift and effective response.
Meet Medicare and Medicaid Requirements
Participation in government healthcare programs like Medicare and Medicaid comes with strict documentation and reporting rules. Using NDCs correctly is not optional—it’s a core requirement for reimbursement. These programs rely on NDCs to verify that the drugs being billed are eligible for coverage and priced correctly. Failure to provide accurate NDC information on claims can lead to rejections, audits, and even exclusion from the programs. Staying on top of these regulations, including mandates like the Drug Supply Chain Security Act (DSCSA), is essential for any pharmaceutical business serving these patient populations.
Use Data to Optimize Inventory
Beyond daily transactions, NDCs are a goldmine of data. By analyzing sales trends tied to specific NDCs, you can gain powerful insights into market demand, seasonal fluctuations, and the performance of different product formulations. Are certain dosages more popular in specific regions? Is a new competitor impacting sales of one of your products? This information helps you make smarter purchasing decisions and refine your sales strategy. With the right business intelligence analytics tools, you can turn raw NDC data into a clear roadmap for growth and profitability.
How to Future-Proof Your NDC System
Keeping your NDC system current isn’t just about avoiding problems today; it’s about setting your business up for long-term success. A future-proof system is adaptable, scalable, and resilient, ready to handle new regulations, market shifts, and business growth without missing a beat. It means moving from a reactive stance—fixing issues as they arise—to a proactive one where you anticipate challenges and build the capacity to meet them head-on. By focusing on a few key areas, you can create a robust framework that not only supports your current operations but also evolves with you, ensuring your inventory control remains a strategic asset for years to come.
Integrate the Right Technology
Relying on manual processes or outdated software to manage NDCs is a significant risk. The right technology automates tracking and minimizes human error, giving you a clear, real-time view of your inventory. Look for a system that offers automated purchase order generation, custom reorder point triggers, and centralized visibility across all your locations. An integrated inventory management solution connects your NDC data with every other part of your operation, from warehousing to finance. This creates a single source of truth, ensuring that everyone from the warehouse floor to the C-suite is working with the same accurate information. This level of integration is what turns your inventory data into a powerful decision-making tool.
Plan for Scalability
Your business won’t stand still, and your NDC system shouldn’t either. As you grow, your inventory will become more complex, and your system needs to handle that increased volume and complexity without breaking a sweat. When choosing a solution, think about your five- or ten-year plan. Will this system support multiple warehouses, expanded product lines, or entry into new markets? A scalable platform, like a serialized ERP, is designed to grow with you. It should allow you to easily add new users, locations, and products while maintaining performance and data integrity. Planning for scalability from the start saves you from a costly and disruptive system migration down the road.
Stay Ahead of Compliance Changes
In the pharmaceutical industry, regulatory changes are a constant. From DSCSA updates to new state-level mandates, staying compliant is a full-time job. A future-proof NDC system takes this burden off your shoulders. Your technology partner should be an expert in pharma regulations, building compliance directly into the platform and providing updates as rules evolve. This proactive approach ensures you’re always prepared for an audit and protected from fines or operational shutdowns. Instead of scrambling to adapt to new requirements, you can trust that your system is already equipped to handle them, letting you focus on running your business.
Invest in Ongoing Training
The most advanced system in the world is only effective if your team knows how to use it properly. Investing in ongoing training is crucial for future-proofing your operations. Regular sessions ensure your staff understands the latest features, follows best practices, and can handle the complexities of NDC management with confidence. A well-trained team makes fewer errors, works more efficiently, and is better equipped to identify potential issues before they become major problems. Make training a continuous part of your process, not a one-time event. Empowering your team with knowledge is one of the best ways to protect your investment and maintain operational excellence.
Follow a Clear Maintenance Plan
Once your system is in place, you need a plan to keep it running smoothly. A clear maintenance plan involves more than just IT support; it includes regular data audits, physical inventory counts, and process reviews to ensure everything stays aligned. Consistently checking for and correcting discrepancies maintains the accuracy of your data. Use your system’s business intelligence analytics to monitor performance, spot trends, and identify areas for improvement. Think of it as a regular health check for your inventory system. This disciplined approach ensures your NDC data remains reliable and your operations stay efficient over the long term.
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Frequently Asked Questions
What’s the difference between an NDC and the serial number required by DSCSA? Think of it this way: the NDC identifies the specific type of product, like a 100mg tablet of a certain drug in a 90-count bottle. The serial number, which is part of the DSCSA requirements, identifies that one specific bottle. So, every 90-count bottle of that drug will have the same NDC, but each individual bottle will have its own unique serial number. The NDC tells you what it is, while the serial number tells you which one it is, allowing for precise unit-level tracking.
Does the FDA’s assignment of a labeler code mean the drug is approved? This is a common point of confusion, but the answer is no. The presence of an NDC on a product simply means that the company has listed the drug with the FDA, which is a required step for commercial distribution. It does not mean the FDA has reviewed the drug for safety and effectiveness or granted its official approval. Always verify a drug’s approval status separately from its NDC listing.
How should my business prepare for the FDA’s proposed shift to a 12-digit NDC format? The best way to prepare for this or any regulatory change is to ensure your core systems are flexible and managed by a partner who stays ahead of the curve. Instead of relying on rigid, outdated software, using a modern, pharma-specific ERP system is the most direct path. The software provider should be responsible for updating the platform to handle new formats, ensuring your operations continue without disruption and you remain compliant.
What’s the most common mistake you see companies make with NDC management? The biggest pitfall is trying to manage NDCs across multiple, disconnected systems. Many companies use one program for inventory, another for accounting, and spreadsheets to fill in the gaps. This creates data silos where information is inconsistent and rarely updated in real time, leading to costly shipping errors, compliance risks, and inaccurate financial reporting. A single, integrated platform is the only way to maintain a reliable source of truth.
Can a single drug product have more than one NDC? Yes, and this is a crucial detail for accurate inventory control. The same drug from the same manufacturer will have a different NDC for each unique package size or type. For instance, a 30-count bottle will have a different package code—and therefore a different NDC—than a 90-count bottle of the exact same medication. This is why precise, NDC-based tracking is essential for everything from order fulfillment to billing.
