The FDA faced an imminent shortage of available 5-digit labeler codes for the National Drug Code (NDC) format, which prompted the agency to issue a final rule on July 22, 2022, updating the NDC structure from the previous 10-digit configuration to a standardized 12-digit format.

This regulatory update is now being implemented gradually over a five-year period to give pharmaceutical manufacturers, distributors, and healthcare providers time to adapt.

The FDA’s rule resolves the long-standing limitations of the previous NDC system by introducing a uniform, 12-digit National Drug Code structure that applies to all products, including those assigned under the older 10-digit system before the rule’s effective date. Drug supply chain stakeholders were granted a three-year transition period during which both 10-digit and 12-digit formats could be used simultaneously.

According to the FDA’s economic impact analysis, the transition is expected to cost approximately $12.4 million per year, with total implementation costs ranging from $6.1 million to $19.4 million (7% discount rate over 10 years).

This article explores the background of the NDC system, details of the new 12-digit format, the implementation schedule, and how these changes are reshaping pharmaceutical traceability, packaging, and compliance across the drug supply chain.

Background of the National Drug Code (NDC) System

The National Drug Code acts as a universal identifier for all drugs marketed in the United States. This system uses three segments to uniquely identify each drug product’s labeler, product, and package size.

10-Digit NDC Formats: 4-4-2, 5-3-2, 5-4-1

Before the FDA introduced the 12-digit National Drug Code (NDC) format, the U.S. drug identification system relied on a 10-digit NDC number divided into three distinct segments. This structure served as the cornerstone of pharmaceutical labeling and product traceability for decades.

The first segment, known as the labeler code, was assigned directly by the FDA to identify the drug’s manufacturer, repackager, or distributor. The second segment, called the product code, defined key product characteristics such as drug strength, dosage form, and formulation. The third segment, or package code, described the package type and size used for commercial distribution.

While the FDA controlled the labeler code assignment, companies were responsible for defining their own product and package codes under agency guidelines.

The previous 10-digit NDC structure existed in three different configurations:

• 4-4-2: Four digits for the labeler code, four for the product code, and two for the package code
• 5-3-2: Five digits for the labeler code, three for the product code, and two for the package code
• 5-4-1: Five digits for the labeler code, four for the product code, and one for the package code

While these multiple formats supported flexibility, they also created confusion in drug labeling, barcode design, and supply chain management systems, leading the FDA to pursue the 12-digit standardized NDC system now being implemented across the pharmaceutical supply chain.

HIPAA 11-Digit Format and Its Limitations

Before the FDA finalized the 12-digit National Drug Code (NDC) format, the Health Insurance Portability and Accountability Act (HIPAA) required its own version of NDC standardization for electronic healthcare transactions.
uHIPAA adopted an 11-digit NDC format using a 5-4-2 configuration to ensure consistency across billing, insurance claims, and pharmaceutical data exchange systems.

To comply with HIPAA’s standard, organizations had to add a leading zero to one of the three segments of the FDA’s original 10-digit NDC, expanding it into the 11-digit format required for HIPAA-covered transactions. This approach aimed to improve compatibility between healthcare and pharma supply chain systems, but it also created significant challenges for data integrity and drug traceability.

The difference between the FDA’s 10-digit NDC structure and HIPAA’s 11-digit version caused widespread confusion. Because a zero can be a valid digit within the NDC, reconstructing the original FDA-standard code from the HIPAA-modified one often became difficult. For example, an 11-digit NDC such as “12345-0678-09” could represent either “12345-678-09” or “12345-0678-9,” depending on its original configuration.

This lack of uniformity across FDA and HIPAA NDC formats highlighted the urgent need for a single, standardized drug identification and labeling system, which ultimately led to the FDA’s transition toward the 12-digit NDC format for complete alignment across the healthcare and pharmaceutical supply chains.

Exhaustion of 5-Digit Labeler Codes: 10–15-Year Forecast

The FDA’s existing 5-digit labeler code format under the National Drug Code (NDC) system provides approximately 90,000 possible combinations, ranging from 10,000 to 99,999. However, FDA projections indicated that this pool of available labeler codes would be exhausted within 10 to 15 years, creating a pressing need for a long-term, scalable solution to maintain continuity in drug identification and pharmaceutical labeling.

According to 21 CFR 207.33, the FDA planned to begin assigning 6-digit labeler codes once the original 5-digit combinations were depleted. This modification would have resulted in 11-digit NDCs configured as either 6-3-2 or 6-4-1 structures.

However, these extended 11-digit configurations would have directly conflicted with the existing HIPAA 11-digit NDC format, used for healthcare data and billing transactions. Such inconsistencies risked data confusion, interoperability failures, and compliance issues across the healthcare and pharmaceutical supply chains.

To eliminate ambiguity and streamline drug traceability across systems, the FDA introduced a uniform 12-digit NDC format, designed to create a consistent structure for pharmaceutical labeling, barcoding, and regulatory compliance. This 12-digit standardized code aligns both FDA and HIPAA requirements, simplifying data exchange, improving supply chain visibility, and ensuring long-term scalability for the U.S. drug identification system.

Details of the FDA’s 12-Digit NDC Format Proposal

The FDA has proposed a detailed solution that standardizes the National Drug Code format throughout the healthcare industry to tackle the upcoming labeler code shortage.

New 6-4-2 Structure: Labeler, Product, Package Codes

In July 2022, the U.S. Food and Drug Administration (FDA) finalized its proposed rule to establish a uniform 12-digit National Drug Code (NDC) format, creating a consistent standard for pharmaceutical labeling and product identification across the entire drug supply chain.

The new 12-digit NDC structure maintains the traditional three-segment format but introduces standardized segment lengths for all stakeholders. Under the revised configuration, the NDC follows a 6-4-2 pattern:

• 6 digits for the labeler code, identifying the drug manufacturer or distributor
• 4 digits for the product code, defining the strength, dosage form, and formulation
• 2 digits for the package code, indicating package size and type

This standardized system replaces the previous variable 10-digit NDC formats (4-4-2, 5-3-2, and 5-4-1) and aligns with broader pharmaceutical data standardization goals under FDA modernization initiatives.

The adoption of a single, uniform 12-digit NDC format delivers several critical benefits beyond expanding the pool of available labeler codes. It ensures seamless interoperability between FDA and healthcare data systems, simplifies electronic reporting, and reduces medication errors caused by inconsistent code formats.

By harmonizing the NDC configuration, the FDA has eliminated the need for healthcare organizations, pharmacies, and technology vendors to manually convert codes between formats. This unified structure enhances traceability, improves regulatory compliance, and strengthens supply chain transparency across the pharmaceutical and healthcare sectors.

Conversion of Existing 10-Digit NDCs Using Leading Zeros

The U.S. Food and Drug Administration (FDA) completed the conversion of all existing 10-digit National Drug Codes (NDCs) to the new 12-digit NDC format by systematically adding leading zeros to the appropriate code segments. This automated process ensured full consistency with the FDA’s standardized 6-4-2 configuration while maintaining the integrity of existing drug identification data across the pharmaceutical supply chain.

Importantly, drug manufacturers and distributors were not required to resubmit or modify their existing drug listing files as part of the transition. The FDA managed the entire NDC conversion process internally, ensuring that all previously assigned codes aligned with the 12-digit structure without disrupting ongoing operations or regulatory compliance.

This transition, implemented on the effective date of the final FDA rule, simplified pharmaceutical labeling compliance by removing the need for manual data adjustments and minimizing the risk of coding inconsistencies.

By handling the conversion centrally, the FDA reinforced its goal of achieving pharmaceutical data standardization, improving traceability, and ensuring system interoperability between manufacturers, distributors, and healthcare systems throughout the U.S. drug supply chain.

Barcode Flexibility: Linear and Nonlinear Formats Allowed

The U.S. Food and Drug Administration (FDA) expanded drug product barcode labeling requirements as part of the transition to the uniform 12-digit National Drug Code (NDC) format. The updated rule authorizes the use of both linear and nonlinear barcodes, including 2D and advanced digital formats, provided they meet FDA-prescribed technical standards for readability and interoperability.

This barcode flexibility enhances the long-term adaptability of pharmaceutical traceability systems, allowing the industry to adopt emerging automatic identification and data capture (AIDC) technologies without requiring future regulatory revisions.

During the rulemaking process, manufacturers and labeling technology providers requested clearer language beyond a general allowance for non-linear barcodes. In response, the FDA invited public comments in 2022 on the inclusion of “other unspecified AIDC formats” to future-proof drug labeling standards. This approach ensures barcode compliance remains compatible with next-generation data capture solutions, improving supply chain efficiency and patient safety.

Implementation Timeline and Transition Period

The FDA 12-digit NDC implementation plan follows a structured five-year transition timeline, giving the pharmaceutical industry adequate time to update internal systems, labeling processes, and regulatory workflows.

5-Year Delayed Effective Date for System Readiness

To support system modernization, the FDA established a five-year delayed effective date after publication of the final rule. This timeline allows drug manufacturers, distributors, and healthcare technology providers to update IT infrastructure, packaging lines, and data management systems to support the new 12-digit NDC structure.

Once the effective date arrives, the FDA will issue all new NDCs exclusively in the standardized 12-digit format, while existing 10-digit codes will automatically convert through FDA’s centralized data system.

3-Year Transition Period for Labeling Updates

Following the effective date, a three-year transition period allows companies to update product packaging and labeling from 10-digit to 12-digit NDCs. The FDA will not object to continued use of legacy 10-digit NDCs during this period, providing flexibility to minimize relabeling costs and prevent drug supply disruptions.

This approach ensures business continuity while supporting the gradual adoption of new labeling and barcode formats across the pharmaceutical sector.

FDA’s Dual Publishing of 10-Digit and 12-Digit NDCs

To prevent confusion and reduce medication error risks, the FDA will maintain dual publication of both 10-digit and 12-digit NDC formats during the transition. Stakeholders, including manufacturers, pharmacies, healthcare providers, and regulators, can rely on this dual reference system to verify drug identity and labeling accuracy throughout the changeover.

This phased implementation ensures data consistency, regulatory compliance, and traceability integrity across the entire pharmaceutical supply chain, supporting the broader goal of drug labeling standardization and patient safety enhancement.

Impact on Drug Supply Chain and Compliance Requirements

Following the FDA’s 2022 rulemaking to adopt a uniform 12-digit National Drug Code (NDC) format, the U.S. pharmaceutical supply chain is now undergoing one of its most significant compliance transformations to date. The transition, officially launched after the rule’s finalization, affects drug manufacturers, distributors, healthcare providers, and technology vendors at every operational level, reshaping how products are labeled, tracked, and verified.

System Updates for Manufacturers and Distributors

Pharmaceutical manufacturers, distributors, and importers have been updating their enterprise systems to align with the standardized 6-4-2 NDC configuration introduced by the FDA. This has required extensive modifications to drug listing databases, serialization software, inventory management systems, and supply chain operations.

Although the FDA automatically converted all pre-existing 10-digit NDCs by adding leading zeros, companies remain responsible for verifying that their drug listing files and master data now reflect the correct 12-digit format. These updates are essential for regulatory compliance, pharmaceutical traceability, and maintaining end-to-end visibility across the global drug supply chain.

Labeling and Packaging Changes for Pharma Serialization

As part of the transition, pharmaceutical manufacturers are now required to implement 12-digit NDC labeling on all drug packaging. The industry has had to coordinate this massive update carefully, using up old label stock while redesigning compliant packaging. Many experts have described the shift as a “Y2K-like moment” for pharmaceutical packaging, given its potential scale and complexity.

Additionally, the expanded NDC format impacts Global Trade Item Numbers (GTINs) and pharma serialization systems, as the new 12-digit code exceeds previous digit limits. To ensure traceability and regulatory continuity, companies are upgrading their barcode labeling, printing lines, and packaging verification systems to fully integrate the new format.

Software and EHR Vendor Adjustments for NDC Parsing

Electronic Health Record (EHR) providers, pharmacies, and healthcare IT vendors are also adjusting their systems to handle 12-digit NDCs natively. Previously, under HIPAA, 10-digit NDCs were padded with leading zeros to form an 11-digit standard; now, the permanent adoption of a 12-digit format requires updates to data structures, interfaces, and claim-processing systems.

These updates ensure interoperability across healthcare networks, accurate drug identification, and error-free e-prescribing, all critical to preventing medication errors during the coexistence of legacy and new code formats.

Potential Confusion During Dual-Format Coexistence

During the ongoing transition phase, the FDA continues to publish both 10-digit and 12-digit NDC formats to minimize confusion and maintain transparency. However, this dual-format coexistence presents operational challenges.

Organizations must confirm that their data management systems, barcode scanners, and serialization platforms can process both formats simultaneously. Failing to do so could increase the risk of mismatched product data, inventory discrepancies, or medication errors.

By proactively updating systems and ensuring pharmaceutical labeling consistency, stakeholders can maintain regulatory compliance, strengthen traceability, and ensure patient safety throughout the transition to the FDA’s 12-digit NDC standard.

A New Era for Pharmaceutical Traceability

The pharmaceutical supply chain is now in the midst of a major regulatory evolution following the FDA’s 2022 adoption of a uniform 12-digit National Drug Code (NDC) format. This milestone update resolves two long-standing challenges: the exhaustion of available 5-digit labeler codes and the persistent inconsistencies between FDA NDC requirements and HIPAA transaction standards.

Since the final rule’s publication, drug manufacturers, distributors, healthcare providers, and health IT vendors have been implementing comprehensive system updates to align with the new 6-4-2 NDC structure. While the five-year implementation timeline provided a reasonable adjustment window, the ongoing three-year transition period continues to present significant operational and compliance challenges, especially as both 10-digit and 12-digit formats temporarily coexist across the pharmaceutical ecosystem.

The ultimate purpose of this standardization is clear: enhancing patient safety, improving regulatory consistency, and reducing medication errors through a single, unified NDC format.
By eliminating the confusion caused by multiple numbering configurations, the FDA’s 12-digit NDC rule strengthens drug identification accuracy, traceability integrity, and pharmaceutical supply chain efficiency.

Organizations that began early transition planning are now better positioned to avoid business disruptions. Proactive measures, such as system modernization, staff training, and partner coordination, have proven essential for maintaining compliance continuity and supporting end-to-end drug traceability.

The move to the 12-digit NDC format also complements broader pharma serialization and labeling modernization initiatives, requiring companies to review their Global Trade Item Numbers (GTINs) and related barcode labeling systems.

Although this transition has brought technical and operational complexity, it ultimately represents an opportunity to strengthen data integrity, streamline compliance, and build a more secure and transparent pharmaceutical supply chain. The industry has successfully adapted to similar large-scale regulatory changes before, and with proper preparation, it will once again rise to the challenge, ensuring that patients continue to receive safe, traceable, and compliant medications.

Read more: The Art of Sustainable Packaging Design: Lessons from Patrón’s Iconic Bottle Update