[Federal Register Volume 87, Number 141 (Monday, July 25, 2022)]
[Proposed Rules]
[Pages 44038-44048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15414]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Parts 201 and 207

[Docket No. FDA-2021-N-1351]
RIN 0910-AI52


Revising the National Drug Code Format and Drug Label Barcode 
Requirements

AGENCY: Food and Drug Administration, Department of Health and Human 
Services (HHS).

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA, the Agency, or we) is 
proposing to amend our regulations governing the format of the National 
Drug Code (NDC). The NDC is an FDA standard for uniquely identifying 
drug products marketed in the United States. This action, if finalized, 
will standardize the format of all NDCs. Specifically, all NDCs will be 
required to be 12 digits in length with 3 distinct segments and 1 
uniform format. The first segment is the labeler code and will be 6 
digits, the second segment is the product code and will be 4 digits, 
and the third segment is the package code and will be 2 digits. 
Additionally, we are proposing to revise the drug product barcode label 
requirements to permit the use of other data carriers that meet certain 
standards.

DATES: Either electronic or written comments on the proposed rule must 
be submitted by November 22, 2022. Submit comments on information 
collection issues under the Paperwork Reduction Act of 1995 (PRA) by 
August 24, 2022.

ADDRESSES: You may submit comments as follows. Please note that late, 
untimely filed comments will not be considered. The https://www.regulations.gov electronic filing system will accept comments until 
11:59 p.m. Eastern Time at the end of November 22, 2022. Comments 
received by mail/hand delivery/courier (for written/paper submissions) 
will be considered timely if they are received on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. Comments submitted 
electronically, including attachments, to https://www.regulations.gov 
will be posted to the docket unchanged. Because your comment will be 
made public, you are solely responsible for ensuring that your comment 
does not include any confidential information that you or a third party 
may not wish to be posted, such as medical information, your or anyone 
else's Social Security number, or confidential business information, 
such as a manufacturing process. Please note that if you include your 
name, contact information, or other information that identifies you in 
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential 
information that you do not wish to be made available to the public, 
submit the comment as a written/paper submission and in the manner 
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

[[Page 44039]]

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper 
submissions): Dockets Management Staff (HFA-305), Food and Drug 
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets 
Management Staff, FDA will post your comment, as well as any 
attachments, except for information submitted, marked and identified, 
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No. 
FDA-2021-N-1351 for ``Revising the National Drug Code Format and Drug 
Label Requirements.'' Received comments, those filed in a timely manner 
(see ADDRESSES), will be placed in the docket and, except for those 
submitted as ``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m. 
and 4 p.m., Monday through Friday, 240-402-7500.
     Confidential Submissions--To submit a comment with 
confidential information that you do not wish to be made publicly 
available, submit your comments only as a written/paper submission. You 
should submit two copies total. One copy will include the information 
you claim to be confidential with a heading or cover note that states 
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will 
review this copy, including the claimed confidential information, in 
its consideration of comments. The second copy, which will have the 
claimed confidential information redacted/blacked out, will be 
available for public viewing and posted on https://www.regulations.gov. 
Submit both copies to the Dockets Management Staff. If you do not wish 
your name and contact information to be made publicly available, you 
can provide this information on the cover sheet and not in the body of 
your comments and you must identify this information as 
``confidential.'' Any information marked as ``confidential'' will not 
be disclosed except in accordance with 21 CFR 10.20 and other 
applicable disclosure law. For more information about FDA's posting of 
comments to public dockets, see 80 FR 56469, September 18, 2015, or 
access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or 
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in 
the heading of this document, into the ``Search'' box and follow the 
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane, 
Rm. 1061, Rockville, MD 20852, 240-402-7500.
    Submit comments on information collection issues under the PRA: 
Submit comments on the information collection under the PRA to the 
Office of Management and Budget (OMB) at https://www.reginfo.gov/public/do/PRAMain. Find this particular information collection by 
selecting ``Currently under Review--Open for Public Comments'' or by 
using the search function. The title of this proposed collection is 
``Revising the National Drug Code Format and Drug Label Requirements.''

FOR FURTHER INFORMATION CONTACT: With regard to the aspects of the 
proposed rule pertaining to human drug products: Leyla Rahjou-
Esfandiary, Center for Drug Evaluation and Research, Food and Drug 
Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 2262, Silver 
Spring, MD 20993, 301-796-3185, [email protected].
    With regard to the aspects of the proposed rule pertaining to human 
biological drug products: Stephen Ripley, Center for Biologics 
Evaluation and Research, Food and Drug Administration, 10903 New 
Hampshire Ave., Bldg. 71, Rm.7301, Silver Spring, MD 20993, 240-402-
7911, [email protected].
    With regard to the aspects of the proposed rule pertaining to 
animal drug products: Charise Kasser, Center for Veterinary Medicine, 
Food and Drug Administration, 7519 Standish Pl., Rm. 2626, Rockville, 
MD 20855, 240-402-6816, [email protected].
    With regard to the information collection: Domini Bean, Office of 
Operations, Food and Drug Administration, Three White Flint North 10A-
12M, 11601 Landsdown St., North Bethesda, MD 20852, 301-796-5733, 
[email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. Executive Summary
    A. Purpose of the Proposed Rule
    B. Summary of the Major Provisions of the Proposed Rule
    C. Legal Authority
    D. Costs and Benefits
II. Table of Abbreviations/Commonly Used Acronyms in This Document
III. Background
    A. Current Regulatory Framework and the Need for the Regulation
    B. History of the Rulemaking
IV. Legal Authority
V. Description of the Proposed Rule
    A. Adoption of a Uniform 12-Digit NDC
    B. Scope/Applicability
    C. Implementation of New, Uniform, 12-Digit NDC
    D. Proposed Delayed Effective Date
    E. Proposed Transition Period
VI. Proposed Effective Date(s)
VII. Preliminary Economic Analysis of Impacts
    A. Introduction
    B. Summary of Costs and Benefits
VIII. Analysis of Environmental Impact
IX. Paperwork Reduction Act of 1995
X. Federalism
XI. Consultation and Coordination With Indian Tribal Governments
XII. References

I. Executive Summary

A. Purpose of the Proposed Rule

    FDA is proposing to modify our regulations to establish a uniform, 
12-digit format for the NDC (21 CFR 207.33) that can accommodate longer 
NDCs once FDA begins issuing 6-digit labeler codes. FDA estimates that 
it will exhaust its inventory of available 5-digit labeler codes and 
begin assigning 6-digit labeler codes in 10-15 years. The use of a 
consistent, uniform format is intended to eliminate the need to convert 
NDCs from one of FDA's prescribed formats to a different standardized 
format used by other sectors of the healthcare industry (e.g., 
healthcare providers and payors). FDA is also proposing to revise the 
drug barcode label requirements to allow the use of either linear or 
nonlinear barcodes, so long as the barcode meets the prescribed 
standards.

B. Summary of the Major Provisions of the Proposed Rule

    Under the proposed rule, FDA would amend its regulations to adopt a 
uniform, 12-digit format for the NDC. As proposed, NDCs will continue 
to consist of three segments: the labeler code, the product code, and 
the package code. However, we are proposing that the labeler code be 6 
digits, the product code be 4 digits, and the package code be 2 digits. 
To provide maximum flexibility on the type of barcode used on the label 
of a drug product, we are proposing to allow the use of either linear 
or nonlinear barcodes, so long as the barcode meets one of the 
prescribed standards in Sec.  201.25 (21 CFR 201.25).
    On the effective date of the final rule, FDA would begin assigning 
new NDCs in the uniform, 12-digit format, and existing 10-digit NDCs 
assigned by FDA prior to the effective date would be required to 
convert to the new, uniform, 12-digit NDC format. As a result, all 
stakeholders that use FDA-assigned NDCs would need to have systems

[[Page 44040]]

capable of handling the new, uniform, 12-digit NDC on the effective 
date of the final rule. Therefore, FDA is proposing to delay the 
effective date of the final rule for a period of 5 years following its 
publication to allow stakeholders time to develop and implement such 
systems.
    Additionally, FDA is proposing to allow for a 3-year transition 
period following the effective date of the final rule. During this 
proposed 3-year transition period, firms that use 10-digit NDCs 
assigned prior to the effective date on product labeling should begin 
updating their labeling to replace the 10-digit NDCs with the new 12-
digit NDCs by adding leading zeros to the labeler code, product code, 
and/or package code segments as needed, as soon as possible. However, 
to aid with the transition, FDA does not intend to object to continued 
use of such 10-digit NDCs on the labeling of products remaining in 
interstate commerce after the effective date during the 3-year 
transition period. The purpose of the transition period is to mitigate 
the potential costs associated with reprinting labels for these 
products. Therefore, during this proposed transition period, 
stakeholders should ensure that their systems are capable of handling 
both 10-digit NDCs and 12-digit NDCs.

C. Legal Authority

    FDA is proposing to amend our regulations on foreign and domestic 
establishment registration and listing for drugs, including biological 
products and animal drugs. FDA's authority for this proposed rule 
derives from the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 
U.S.C. 321, et seq.) applicable to drugs, including biological 
products, and the biological product provisions of the Public Health 
Service Act (PHS Act) (42 U.S.C. 262, et seq.). In particular, the 
proposed rule will standardize the format of NDCs assigned under 
section 510(e) of the FD&C Act (21 U.S.C. 360(e)) and will aid in 
efficient enforcement of the FD&C Act pursuant to section 701(a) (21 
U.S.C. 371(a)) and section 351(j) of the PHS Act.

D. Costs and Benefits

    The proposed rule, if finalized, would require that all NDCs, 
including any 10-digit NDCs issued by FDA prior to the effective date, 
be 12 digits in length with a uniform format. Specifically, the NDC 
will consist of three segments: a 6-digit labeler code, a 4-digit 
product code, and a 2-digit package code. As a result, product labeling 
that includes a product's 10-digit NDC would need to be updated to 
convert the 10-digit NDC to the standard 12-digit format.
    One expected benefit of the proposed rule, if finalized, is that 
the proposed standardized format would facilitate the adoption of a 
single NDC format by all stakeholders. Such an adoption would eliminate 
the need to convert NDCs from one of FDA's prescribed formats to a 
different standardized format used by other sectors of the healthcare 
industry (e.g., healthcare providers and payors). Eliminating the need 
to convert NDCs should reduce potential errors caused by converting 
from the FDA-assigned NDC format to a different format used by other 
sectors of the healthcare industry. Standardization and adoption of a 
single format would also eliminate the need for additional quality 
control and validation by certain stakeholders, such as payors and 
prescribers, to ensure a drug product and its respective NDC are 
accurate; this is particularly important for insurance coverage and 
reimbursement claims. Another benefit of the proposed rule would be to 
avoid any potential risks to the public health from potential 
reductions in medication errors and risk of confusion. We do not have 
data to quantify these potential benefits and request comments.
    The costs to industry of converting current NDC codes to the 
proposed format would include one-time costs of updating software 
systems, new training for employees, coordinating labeling updates, and 
reading and understanding the proposed rule. Industry, however, can 
incorporate any changes to existing labeling due to this proposed rule 
into their recurring labeling updates and avoid any relabeling costs. 
Some software and training costs would occur even without the proposed 
rule because FDA will begin issuing 6-digit labeler codes, and the 
current 10-digit NDC formats are not capable of accommodating 6-digit 
labeler codes. Our estimates, therefore, are conservative. We estimate 
annualized costs would be about $12.4 million ranging from $6.1 million 
to $19.4 million using a 7-percent discount rate over a 10-year 
horizon. Similarly, we estimate annualized costs would be about $10.2 
million ranging from $5.1 million to $16.0 million using a 3-percent 
discount rate over a 10-year horizon. The present-value of the 
estimated costs would be $87.1 million ranging from $43.1 million to 
$136.3 million at both the 7-percent and 3-percent discount rates.

II. Table of Abbreviations/Commonly Used Acronyms in This Document

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       Abbreviation/ acronym                    What it means
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ANDA...............................  Abbreviated New Drug Application.
BLA................................  Biologics License Application.
EAN/UCC............................  European Article Number/Uniform
                                      Code Council.
FDA................................  Food and Drug Administration.
FD&C Act...........................  Federal Food, Drug, and Cosmetic
                                      Act.
GTIN-14............................  Global Trade Identification Number
                                      14.
HCT/P..............................  Human Cells, Tissues, and Cellular
                                      and Tissue-Based Product.
HIBCC..............................  Health Industry Business
                                      Communications Council.
HHS................................  Department of Health and Human
                                      Services.
HIPAA..............................  Health Insurance Portability and
                                      Accountability Act.
NDA................................  New Drug Application.
NDC................................  National Drug Code.
OMB................................  Office of Management and Budget.
PHS Act............................  Public Health Service Act.
PRA................................  Paperwork Reduction Act of 1995.
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III. Background

A. Current Regulatory Framework and the Need for the Regulation

    The NDC is an FDA standard for uniquely identifying drugs marketed 
in the United States. Currently, NDCs assigned by FDA contain 10 
digits. As currently described in Sec.  207.33(b) (21 CFR 207.33(b)), 
NDCs consist of three segments: the labeler code, the product code, and 
the package code. At some point in the next 10 to 15 years, NDC 
formatting will need to be updated to accommodate longer NDCs because 
new labelers are continually entering the U.S. market. In 2016, when 
FDA published the final rule ``Requirements for Foreign and Domestic 
Establishment Registration and Listing for Human Drugs, Including Drugs 
That Are Regulated Under a Biologics License Application, and Animal 
Drugs'' (the Registration and Listing Final Rule), the Agency stated 
that when it runs out of 5-digit labeler codes, it will begin assigning 
6-digit labeler codes (81 FR 60169 at 60187, August 31, 2016). As a 
result, under existing regulations, FDA would add 2 new 11-digit NDC 
formats (6-3-2 and 6-4-1) to accommodate the longer labeler codes. 
However, FDA acknowledged that some stakeholders expressed an interest 
in FDA moving to a single, standard format for NDCs and announced that 
it planned to initiate a public discussion of future formatting options 
(See id.). FDA initiated the public discussion by holding a public 
hearing on November 5, 2018, requesting comments from stakeholders

[[Page 44041]]

on the impact of the transition to 6-digit labeler codes (83 FR 
38666).\1\
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    \1\ https://www.regulations.gov/document/FDA-2018-N-2610-0001.
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    Section 510(j) of the FD&C Act requires each person who registers 
an establishment under section 510(b), (c), (d) or (i) to provide FDA 
with a current list of all drugs manufactured, prepared, propagated, 
compounded, or processed by the establishment for commercial 
distribution. Drug products are identified and listed using the NDC (21 
CFR 207.49).
    The NDC for each listed drug marketed in the United States is a 
unique 10-digit,\2\ 3-segment number (Sec.  207.33(b) (21 CFR 
207.33(b)). The 3 segments of the NDC include the labeler code, product 
code, and package code (id.). The first segment, the labeler code, is a 
unique 4-, 5-, or (in the future) 6-digit number assigned by FDA that 
identifies the manufacturer, repacker, relabeler, or private label 
distributor of the drug (id.). The second segment, the product code, is 
a 3- or 4-digit number that identifies a specific active ingredient, 
strength, and dosage form of a drug manufactured, repackaged, 
relabeled, or distributed by the labeler (id.; Sec.  207.35(b) (21 CFR 
207.35(b))). The third segment, the package code, is a 1- or 2-digit 
number that identifies package sizes and types (Sec.  207.33(b)). 
Different package codes differentiate between different quantitative 
and qualitative attributes of the product packaging (Sec.  207.35). 
Both the product and package codes are proposed by persons submitting 
drug listing information (see Sec.  207.33(d)(1)). The Agency will 
assign a proposed NDC if it has not been used previously, is not 
currently in use, and has not been reserved for future assignment to a 
different drug (Sec.  207.33(d)(2)). The NDC for a given drug is 
currently in one of the following configurations (with each number 
representing the number of digits in that segment): 4-4-2, 5-3-2, or 5-
4-1.
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    \2\ Under 21 CFR 207.33(b), an NDC must consist of 10 or 11 
digits, divided into three segments. This FDA 11-digit NDC refers to 
the NDC length once the Agency starts assigning 6-digit labeler 
codes.
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    According to current regulations, labeler codes may consist of 4, 
5, or 6 digits (Sec.  207.33(b)(1)). Currently, 5-digit labeler codes 
are being assigned by FDA. A 5-digit labeler code format provides FDA 
with 90,000 labeler codes that could be assigned to drug manufacturers 
and private label distributors ranging from 10,000 to 99,999. Based on 
current assignment rates, FDA anticipates that it will run out of 5-
digit labeler codes in approximately 10 to 15 years. At that point in 
the future, FDA will begin assigning 6-digit labeler codes due to 
exhaustion of 5-digit labeler codes. Under the current regulations, 
moving to 6-digit labeler codes will expand the entire NDC to 11 digits 
and, per regulation, allow for two additional NDC configurations: 6-3-2 
and 6-4-1, for a total of 5 possible NDC configurations (including the 
three 10-digit NDC configurations) (see Sec.  207.33(b)(2)).
    The Health Insurance Portability and Accountability Act (HIPAA) 
(Pub. L. 104-191) contains provisions calling for the administrative 
simplification ``of the national standards for electronic health care 
transactions and code sets, unique health identifiers, and security'' 
\3\ and specifically references the NDC. In its implementation of these 
rules, on August 17, 2000, the Department of Health and Human Services 
(HHS) published the final rule, ``Health Insurance Reform: Standards 
for Electronic Transactions,'' which addressed standards for electronic 
transactions that established NDCs as the standard medical data code 
set for reporting drugs and biologics in all standard transactions 
under HIPAA (65 FR 50312 at 50313). If a HIPAA-covered transaction 
includes a drug, the NDC is required to be part of the medical code 
data set (see 45 CFR 162.1002(a)(3)). However, in the preamble to the 
HIPAA regulations, HHS stated that it was adopting a uniform 11-digit 
format to conform with customary practice used in computer systems (65 
FR 50312 at 50329). The HIPAA standard 11-digit NDC format is 
standardized such that the labeler code is always 5 digits, the product 
code is always 4 digits, and the package code always 2 digits. To 
convert a 10-digit NDC to an 11-digit HIPAA standard NDC, a leading 
zero is added to the appropriate segment to create the 11-digit 
configuration as defined above.
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    \3\ See https://www.hhs.gov/ocr/privacy/hipaa/administrative/index.html (last accessed March 22, 2017).
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    When FDA moves to a 6-digit labeler code, FDA's new 11-digit native 
NDC \4\ configurations will have the same number of digits as required 
by the HIPAA standards, but they will not be in the same format. An 11-
digit native NDC will have an extra labeler code digit but will be 
short a digit in either the product code or package code. Additionally, 
some of the systems that utilize HIPAA standard 11-digit NDCs \5\ do 
not use hyphens to separate the segments which, as illustrated below, 
will result in some 11-digit native NDCs being indistinguishable from 
HIPAA standard 11-digit NDCs. Therefore, to ensure unhyphenated NDCs 
are distinguishable, FDA anticipates that the HIPAA standards, and 
other code sets that currently require 10-digit native NDCs to be 
converted to 11-digit NDCs, will likely need to be updated in some 
manner.
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    \4\ NDCs in the format and with the digits assigned by FDA are 
referred to as native NDCs.
    \5\ NDCs that contain additional digits necessary to comply with 
HIPAA standards are referred to as converted NDCs.

                                         Table 1--NDC Conversion Example
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                                                                      Converted NDC format
                                               -----------------------------------------------------------------
               Native NDC format                                       11-Digit converted    11-Digit converted
                                                 10-Digit hyphenated      (hyphenated)         (unhyphenated)
----------------------------------------------------------------------------------------------------------------
Native 10-digit (5-3-2).......................          10010-001-01         10010-0001-01           10010000101
Native 11-digit (6-3-2).......................                               100100-001-01           10010000101
----------------------------------------------------------------------------------------------------------------

    FDA is proposing to adopt a single, uniform, 12-digit NDC format to 
avoid confusion and reduce medication errors that could result, if, as 
described above, FDA were to begin issuing 11-digit NDCs and the HIPAA 
standards, and other code sets, that require 10-digit native NDCs to be 
converted to 11-digit NDCs are not updated. Specifically, standardizing 
the NDC to one format should eliminate the need for stakeholders to 
constantly convert a drug's FDA-assigned NDC to a different 
standardized format because those stakeholders seeking a standardized 
format will be able to adopt FDA's new, uniform, 12-digit format. This 
should reduce errors caused by converting from FDA's current 
nonstandardized NDC format to a standardized format. Additionally, 
standardization should

[[Page 44042]]

eliminate the need for stakeholders to use multiple versions of an NDC 
(e.g., the FDA-assigned 10-digit NDC and the converted HIPAA standard 
11-digit NDC).
    Finally, using 12-digits will allow FDA to adopt a uniform NDC 
format without requiring extensive changes to existing 10-digit NDCs. 
Instead, stakeholders would only need to add leading zeros to certain 
segments of the existing 10-digit NDC to convert it to the new 12-digit 
NDC.

B. History of the Rulemaking

1. 2016 Final Rule
    In 2016, FDA published the Registration and Listing Final Rule. 
Recognizing that FDA would run out of 5-digit labeler codes in the near 
future, the Registration and Listing Final Rule established two 
additional NDC configurations: 6-3-2 and 6-4-1, for a total of five 
possible NDC configurations (including the three 10-digit NDC 
configurations) (Sec.  207.33(b)(2)). At the same time, FDA 
acknowledged in the preamble to the Registration and Listing Final Rule 
that some stakeholders recommended that FDA adopt a single, standard 
format for NDCs instead and announced that it planned to initiate a 
public discussion of future formatting options (81 FR 60169 at 60187).
2. 2018 Public Hearing
    On November 5, 2018, FDA began these public discussions by holding 
a public hearing.\6\ At the public hearing, FDA outlined several 
proposed formatting options that FDA could adopt once it begins issuing 
6-digit labeler codes. Specifically, FDA outlined the following four 
formatting options:
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    \6\ https://www.regulations.gov/document/FDA-2018-N-2610-0001.
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    Option A: Do not revise the regulations and continue with the 
status quo. Under this option, FDA would continue assigning the 
remainder of the 5-digit labeler codes and whenever the Agency runs out 
of 5-digit labeler codes, start assigning 6-digit labeler codes. This 
would expand FDA's NDC inventory to 10 and 11 digits, resulting in 5 
different configurations. FDA would use 10- and 11-digit NDCs.
    Option B: Same as Option A except that FDA would stop issuing 5-
digit labeler codes and start issuing 6-digit labeler codes on a 
specified date in the future, before FDA anticipated running out of 5-
digit labeler codes. This option was intended to provide more certainty 
to stakeholders by establishing a designated future date on which they 
would need to have systems in place to handle 11-digit NDCs in either 
6-4-1 or 6-3-2 format.
    Option C: Adopt the hyphenated NDC 11-digit format (5-4-2 format) 
currently used by the payer industry and convert all current 10-digit 
NDCs to the hyphenated 11-digit format by adding a leading zero to the 
short segment of the NDC. When the supply of 5-digit labeler codes is 
exhausted, FDA would begin assigning 6-digit labeler codes for use in 
6-3-2 and 6-4-1 formats. Although this would establish a uniform total 
length for all NDC codes, there would still be multiple formats. 
Additionally, there is the potential for an 11-digit format with a 6-
digit labeler code and an 11-digit format with a 5-digit labeler code 
to be identical when the hyphens separating the various segments are 
removed.
    Option D: Allow for the harmonization of NDCs between FDA and other 
stakeholders by adopting 12-digit NDCs in a single, uniform 6-4-2 
format. Once FDA starts assigning 6-digit labeler codes, all NDCs (new 
and existing) would be required to be presented in a 6-4-2 format. 
Existing NDCs would be converted from their existing format by adding 
leading zeros to the short segments. This would create one standard 
configuration for all NDCs that can be used by all stakeholders without 
conversion. As an added benefit, it would provide the industry with 
more product or package codes.
    An appropriate number of years would be necessary to adapt existing 
databases and structures to be able to handle the new, uniform, 12-
digit NDC and for industry to adopt this as the single NDC format. 
Therefore, under this option, FDA would implement this change on a 
prespecified date that would occur before the current pool of 5-digit 
labeler codes is exhausted, to provide certainty and predictability to 
industry stakeholders, government payers, and other interested parties.
    FDA received oral comments during the hearing, and written comments 
were submitted afterwards. Most of the comments were in favor of FDA's 
adoption of a single standardized format that could be used by all 
stakeholders. The majority of the commenters were also in favor of FDA 
establishing a certain date when stakeholders would be required to have 
systems capable of handling the new format, with many advocating for a 
10-year delay. For the most part, the commenters were not in favor of 
options A, B, or C. Instead, in general, the commenters either favored 
option D, or advocated for FDA to no longer be responsible for 
assigning NDCs and, instead, allow for a third party to take over that 
role. FDA considered these comments in developing this proposed rule.

IV. Legal Authority

    FDA is proposing to amend our regulations on foreign and domestic 
establishment registration and listing for drugs, including biological 
products and animal drugs. FDA's authority for this proposed rule 
derives from the FD&C Act applicable to drugs, including biological 
products and the biological product provisions of the PHS Act. In 
particular, this proposed rule will standardize the format of NDCs 
assigned under section 510(e) of the FD&C Act and will aid in efficient 
enforcement of the FD&C Act pursuant to sections 701(a) and 351(j) of 
the PHS Act.

V. Description of the Proposed Rule

A. Adoption of a Uniform 12-Digit NDC

    We are proposing to replace the existing NDC formats with a 
uniform, 12-digit format (see proposed amendments to Sec.  207.33(b)). 
Under the proposed rule, the NDC would remain a 3-segment numerical 
code consisting of the labeler code, the product code, and the package 
code. However, we are proposing to establish a uniform length for each 
segment to create a uniform format. Specifically, we are proposing that 
the labeler code would be 6 digits in length, the product code would be 
4 digits in length, and the package code would be 2 digits in length (a 
6-4-2 format).
    The new format requirements we are proposing would not apply only 
to NDCs assigned after the effective date of the final rule. Instead, 
if finalized as proposed, all existing 10-digit NDCs would be converted 
to the new, uniform, 12-digit format by the addition of leading zeros 
to the labeler code, the product code, and/or package code segments as 
needed to produce the 6-4-2 format.
    Before deciding to propose the new, uniform, 12-digit NDC, FDA 
considered not only the four options outlined above, but also several 
proposals submitted as comments to the public hearing docket. Although 
many of the comments were supportive of the uniform, 12-digit NDC, 
others raised concerns that this could impact the ability to use 
barcodes that utilize GS1's Global Trade Identification Number 14 
(GTIN-14) because GTIN-14 is only capable of encoding NDCs up to 10 
digits.\7\ Those raising this concern suggested that FDA no longer be 
responsible for assigning NDCs and, instead, delegate assignment of 
NDCs to

[[Page 44043]]

third parties, similar to unique device identifiers. However, we chose 
not to adopt this alternative because, unlike the implementation of the 
unique device identifier requirements, FDA is already deeply involved 
in the assignment of NDCs and changing this system has the potential to 
cause significant disruption, particularly with the handling of a 
transition from FDA-assigned NDCs to a new, third-party-assigned NDC. 
Although there may be some disruption resulting from the implementation 
of a new, uniform, 12-digit NDC, FDA will be in the best position to 
minimize and mitigate the disruption because it would continue to be 
involved in the process for assigning the new 12-digit NDCs. If this 
responsibility were handed over to a third party, FDA would have less 
ability to minimize and mitigate the disruption.
---------------------------------------------------------------------------

    \7\ The GTIN-14 is a global numerical data structure containing 
14 numbers.
---------------------------------------------------------------------------

    One commenter suggested that FDA could retain its 10-digit NDC 
format after it ran out of the current lot of 5-digit labeler codes by 
starting to assign 5-digit, alphanumeric labeler codes. Although this 
would allow firms to continue using their existing 10-digit NDCs, it 
would not accomplish the goal of uniformity advocated by many 
commenters. Additionally, except for systems used for certain minimally 
manipulated human cells, tissues, and cellular and tissue-based 
products (HCT/P) under Sec.  207.33(b)(4), it would not likely relieve 
many stakeholders of the requirement to update their systems to be 
capable of handling the new NDC format, as many current systems are 
unlikely to be able to handle alphanumeric NDCs. Finally, we had some 
concerns that the introduction of alphabetic characters into the 
labeler code could increase the risk of medication errors because some 
may misread a letter as a number. Some examples include similarity 
between lowercase letter ``o'' and uppercase letter ``O'' with numeral 
0 (zero), or uppercase letter ``B'' with numeral 8 (eight).
    After taking these and other suggestions into consideration, FDA 
chose to propose the uniform, 12-digit NDC format because it could be 
adopted by all stakeholders seeking uniformity and would not require 
conversion between formats in perpetuity. We recognize that during the 
transition period described in section V.E. below, there will still 
need to be some conversion between the existing 10-digit NDC formats 
and the new, uniform, 12-digit format. However, as noted further below, 
this would be temporary, and FDA intends to publish, on our website, 
NDCs in both formats to facilitate these conversions. We also recognize 
that the establishment of a new, uniform, 12-digit NDC may require 
changes to other standards in order for stakeholders to adopt the 12-
digit NDC as a universal standard. However, it is likely that any 
change from the 10-digit NDC format would have required such changes, 
and, as FDA is running out of 5-digit labeler codes, a change is 
necessary.

B. Scope/Applicability

    This proposed rule will affect all drug products that are required 
to be listed under section 510 of the FD&C Act and 21 CFR part 207. 
Specifically, once effective, all existing 10-digit NDCs will be 
required to convert to the new uniform 12-digit NDC format, and all new 
NDCs will be assigned in the 12-digit format.
    However, FDA will still allow the following HCT/Ps, if they are 
minimally manipulated, to use an alternatively formatted NDC that is 
approved for use by the relevant Center Director: Hematopoietic stem/
progenitor cells derived from peripheral and cord blood, and 
lymphocytes collected from peripheral blood (Sec.  207.33(b)(4)). HCT/
Ps that do not fall within the exception set forth in Sec.  
207.33(b)(4) would be required to use the new 12-digit NDC format. This 
proposed rule only relates to FDA's assignment of NDCs; it does not 
propose any revisions to the HIPAA standard code set.

C. Implementation of New, Uniform, 12-Digit NDC

1. Issuance of New, Uniform, 12-Digit NDCs
    On the effective date of the final rule (which we propose would be 
5 years from publication of the final rule), FDA would no longer assign 
5-digit labeler codes or 10-digit NDCs. Instead, FDA would begin only 
issuing 6-digit labeler codes and NDCs in the new, uniform, 12-digit 
format. Therefore, all drug listing files submitted on or after the 
effective date proposing a new NDC would be required to use the 
uniform, 12-digit (6-4-2) NDC format. For example, if such a proposal 
is submitted by a firm with a 4- or 5-digit labeler code, the firm 
would need to convert its labeler code to a 6-digit labeler code by 
adding one or two leading zeros, as appropriate, and request the new 
NDC in the 6-4-2 format. If the submission involves a drug that is 
being listed for the first time or a change to an already listed drug 
that requires the use of a new product code under Sec.  207.35(b), the 
firm must ensure that it is requesting a unique, 12-digit NDC, 
including a unique, 4-digit product code. If the submission involves a 
request to assign a new package code for a product already listed with 
a 10-digit NDC, the firm would need to convert its 4- or 5-digit 
labeler code to a 6-digit labeler code by adding one or two leading 
zeros.
    If the firm currently uses the 5-3-2 format, it would additionally 
need to convert the existing product code from a 3-digit code to a 4-
digit code by adding a leading zero to achieve the 6-4-2 format. If the 
firm currently uses the 5-4-1 format, it would not need to convert the 
existing product code because it is already four digits. However, it 
still would need to convert its labeler code to six digits and would 
need to request a unique package code.
    As all new NDCs will only be assigned using the new, uniform, 12-
digit format starting on the effective date of the final rule, all 
stakeholders will need to have systems in place that are capable of 
handling the new, uniform, 12-digit NDCs. However, as described in more 
detail below in section V.E., during the 3-year transition period, FDA 
does not intend to object to continued use of 10-digit NDCs assigned 
prior to the effective date on product labels. Therefore, during this 
proposed transition period, stakeholders should ensure that their 
systems are capable of handling both 10-digit and 12-digit NDCs.
2. Converting Existing 10-Digit NDCs
    To reduce the burden on registrants, FDA does not intend to require 
them to resubmit all of their existing drug listing files to convert 
the NDCs from one of the discontinued 10-digit formats to the new, 
uniform, 12-digit, 6-4-2 format. Instead, FDA intends to convert 
existing NDCs on its own, on the effective date, by adding leading 
zeros to the appropriate segments. Additionally, for the reasons 
described in more detail below regarding the transition period, FDA 
intends to begin publishing, on the effective date, both the 10-digit 
and 12-digit NDCs for those drugs with NDCs assigned prior to the 
effective date.
3. The Effect on Other Non-FDA NDC Formats
    As mentioned above, FDA decided to propose replacing the multiple 
10- and possibly 11-digit NDC formats with a new, uniform, 12-digit 
format, in part, because of concerns that an FDA-assigned 11-digit NDC 
could be identical to a HIPAA converted 11-digit NDC for a different 
drug if the hyphens are removed. FDA could have chosen to avoid this by 
replacing its 11-digit formats with a 12-digit format, while still 
keeping the 10-digit formats. However, this would still have required

[[Page 44044]]

an update to the HIPAA standard format so that it could accommodate the 
new FDA-assigned 12-digit format and likely still would have required 
at least the FDA-assigned 10-digit NDCs to be converted to a new HIPAA 
standard format. Although this may have reduced some of the initial 
burden of converting existing 10-digit NDCs to the new, uniform, 12-
digit format, this approach would likely have required stakeholders to 
update their systems a second time and would have required ongoing 
conversion from FDA's NDC formats to the HIPAA standard format(s). 
Thus, this option would require a conversion and would also create 
costs, while not reducing the overall risk of medication errors. 
Therefore, FDA is proposing to adopt a single, uniform, 12-digit NDC 
format in hopes that it will be adopted as the new HIPAA standard 
format for NDCs, and no conversions will be necessary from FDA's NDC 
format to the HIPAA standard format.
    In addition to impacting the HIPAA standard format, we recognize 
that a 12-digit NDC may impact some stakeholders who use the GTIN-14 
data standard to encode FDA's 10-digit NDC in the barcode on their 
label because the GTIN-14 cannot accommodate a 12-digit NDC. We 
acknowledge that FDA's establishment of a uniform, 12-digit NDC may 
require the development of new data standard(s) that can enable an NDC 
of this length to be encoded in a data carrier such as barcodes. That 
is one of the considerations that went into FDA's proposal to delay the 
effective date of the final rule, as this would provide time for the 
development of new data standard(s) and any respective changes to data 
carriers to accommodate an NDC of this length.
    Recognizing that new data standard(s) may be necessary to encode 
the new, uniform, 12-digit NDC into a data carrier, we propose to 
revise Sec.  201.25(c) to allow the use of linear or nonlinear barcodes 
that meet specified standards. FDA is considering whether to further 
revise Sec.  201.25(c) to accommodate potential advances in 
technologies and standards development by allowing the use of 
unspecified automatic identification and data capture formats other 
than linear or nonlinear barcodes in the future without the need to 
revise the regulation again. Therefore, we are asking stakeholders to 
provide comments on whether to include such flexibility.

D. Proposed Delayed Effective Date

    We propose to delay the effective date of the final rule for a 
period of 5 years following its publication. Delaying the effective 
date of the final rule is intended to provide stakeholders sufficient 
time to update their systems to be able to handle the new, uniform 12-
digit NDC format, and plan on updating their labeling during the 
transition period, in a way that reduces burden to them. The delay is 
also intended to provide sufficient time to implement the necessary 
corresponding changes to the HIPAA standards and data standards that 
can enable an NDC of this length to be encoded in a data carrier such 
as barcodes, as discussed above. FDA is proposing a fixed effective 
date relative to the publication of the final rule to provide 
stakeholders with certainty as to when they would need to implement 
systems capable of handling the new, uniform 12-digit NDC format. 
However, in establishing the specific effective date, FDA will need to 
ensure that it occurs before FDA runs out of 5-digit labeler codes. 
Therefore, this 5-year effective date may result in stakeholders having 
less time to update their systems to be able to handle the new, uniform 
12-digit NDC format than if the effective date were established based 
on when FDA runs out of 5-digit labeler codes.
    The proposed 5-year delay balances the need to give stakeholders 
sufficient time to update their systems and make other necessary 
changes to be able to handle the new, uniform 12-digit NDC format, with 
the need to ensure that the final rule is effective before FDA runs out 
of 5-digit labeler codes and needs to start issuing 6-digit labeler 
codes. At this time, FDA believes there are sufficient 5-digit labeler 
codes remaining such that FDA can delay the effective date of the final 
rule for a period of 5 years following its publication. However, since 
the time FDA began developing this proposed rule, the rate at which 
labeler codes are assigned has increased significantly, particularly 
due to an influx of requests during the COVID-19 pandemic. Therefore, 
recognizing the importance of providing certainty to all stakeholders 
regarding the date on which they will all be expected to have systems 
in place capable of handling the new 12-digit NDC, FDA intends to 
reevaluate, prior to publishing the final rule, whether sufficient 5-
digit labeler codes remain to allow for a 5-year delay in the effective 
date. FDA may finalize a shorter delay in the effective date based on 
our estimation of when we anticipate running out of 5-digit labeler 
codes. FDA believes this approach to ensuring FDA does not run out of 
5-digit labeler codes before the effective date is a better approach 
than either of the two following alternatives: (1) accelerating the 
effective date after publication of the final rule by promulgating a 
new rule with a shorter effective date or (2) beginning to issue 6-
digit labeler codes and 11-digit NDCs before the effective date.

E. Proposed Transition Period

    FDA is proposing a 3-year transition period following the effective 
date of the final rule during which FDA does not intend to object if 
drugs that were assigned a 10-digit NDC prior to the effective date 
continue to be labeled with the 10-digit NDC. However, if a firm 
includes an NDC in its labeling, we would request that the firm start 
labeling drugs that were assigned a 10-digit NDC with the new 12-digit 
NDC as soon as possible, but no later than when a firm runs out of its 
existing labeling inventory for the drug and orders or begins printing 
new labeling. At the end of the transition period (i.e., 8 years after 
the publication of the final rule), all firms will be required to use a 
12-digit NDC in listing files, and FDA will no longer exercise 
enforcement discretion with respect to the 12-digit NDC format 
requirement for all products that include the NDC on their labeling 
that are introduced or offered for introduction into interstate 
commerce. As noted above, during this transition period, FDA will 
continue to maintain and publish 10-digit NDCs for listed drugs, 
simultaneously with the converted 12-digit NDCs. However, FDA does not 
intend to continue publishing and maintaining the 10-digit NDCs after 
the end of this transition period. Therefore, FDA encourages firms to 
begin labeling these products with the 12-digit NDC as soon as possible 
after the effective date to ensure that, at the end of the transition 
period, there are no products labeled with an old, 10-digit NDC 
remaining in interstate commerce.
    FDA is proposing this 3-year transition period to facilitate a 
smooth transition from the current 10-digit NDC formats to the new, 
uniform 12-digit NDC format. In light of the nature of the drug supply 
chain, FDA recognizes that it would be difficult for firms to 
immediately transition from a 10-digit NDC to a 12-digit NDC without a 
transition period. Specifically, if on the effective date, all drugs 
were required to be labeled with a 12-digit NDC and there was no 
enforcement discretion regarding 10-digit NDC-labeled products 
remaining in interstate commerce, then firms would be required to 
remove products labeled with the 10-digit NDC from interstate commerce 
and either destroy them or relabel them. As the cost to the firms would 
be based on the volume of product remaining on the

[[Page 44045]]

market with the 10-digit NDC, this could incentivize firms to minimize 
how much product remains on the market at the time of the transition. 
This could increase the risk of a drug shortage which could harm the 
public health.
    At the same time, the coexistence of drug labeling with either the 
10- or 12-digit NDC for a period of time poses its own risks to the 
public health. Specifically, it raises the risk of confusion, 
medication errors, and possibly, the risk of the introduction of 
illegitimate product into the market because of the confusion. In an 
effort to balance these risks, FDA is proposing to limit the transition 
period to 3 years following the effective date. FDA is proposing a 3-
year transition period for two reasons. First, the expiration date of 
many drugs is no more than 2 years. Therefore, there should not be many 
drugs remaining in interstate commerce labeled with NDCs in the 10-
digit format at the end of the transition period so long as firms start 
labeling their products with the 12-digit NDC within the first year 
after the effective date. Second, most firms make changes to the 
labeling of a human prescription drugs at least once every 3 years.\8\ 
Therefore, even if a firm wanted to wait until the next time it 
implemented a labeling change before transitioning from the 10-digit to 
a 12-digit NDC, most firms would be able to do so within the transition 
period.
---------------------------------------------------------------------------

    \8\ For rates of labeling revisions for prescription drug 
products, see Ref. 2. For nonprescription products, see Ref. 3.
---------------------------------------------------------------------------

    Additionally, FDA intends to mitigate the risk of medication error 
and confusion during the transition period by maintaining and 
publishing both the 10-digit and 12-digit NDC formats for products 
assigned a 10-digit NDC prior to the effective date. This will provide 
stakeholders with a resource to confirm the identity of the drug in the 
event of any confusion.

VI. Proposed Effective Date(s)

    We are proposing to delay the effective date of the final rule 
until 5 years after its publication in the Federal Register. However, 
as discussed in section V.D above, FDA may finalize the rule with a 
shorter effective date to ensure it is effective before FDA runs out of 
5-digit labeler codes and is required to start issuing 6-digit labeler 
codes.
    In addition, as discussed in section V.E above, to minimize 
possible disruption to the distribution of products subject to this 
proposed rule and to minimize the burden on manufacturers and labelers, 
FDA is proposing to provide for a 3-year transition period following 
the effective date. During this transition period, firms with products 
that were assigned 10-digit NDCs prior to the effective date of the 
final rule will need to use a 12-digit NDC for all drug listings 
submitted to FDA and should transition to using a 12-digit NDC on 
labeling.

VII. Preliminary Economic Analysis of Impacts

A. Introduction

    We have examined the impacts of the proposed rule under Executive 
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4). Executive Orders 12866 and 13563 direct us to assess all costs 
and benefits of available regulatory alternatives and, when regulation 
is necessary, to select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health 
and safety, and other advantages; distributive impacts; and equity). We 
believe that this proposed rule is not a significant regulatory action 
as defined by Executive Order 12866.
    The Regulatory Flexibility Act requires us to analyze regulatory 
options that would minimize any significant impact of a rule on small 
entities. Because the one-time cost could be as much as 0.56 percent of 
average annual revenue for some very small stakeholders in the 
insurance industry, 0.45 percent of average annual revenue for some 
very small stakeholders in the pharmaceutical industry, and 0.02 
percent of average annual revenue for some very small stakeholders in 
the healthcare industry, we propose to certify that the proposed rule, 
if finalized, would not have a significant economic impact on a 
substantial number of small entities.
    The Unfunded Mandates Reform Act of 1995 (section 202(a)) requires 
us to prepare a written statement, which includes an assessment of 
anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $158 million, using the most current (2020) Implicit 
Price Deflator for the Gross Domestic Product. This proposed rule would 
not result in an expenditure in any year that meets or exceeds this 
amount.

B. Summary of Costs and Benefits

    This proposed rule, if finalized, would amend regulations governing 
the format of the NDC by standardizing the format of NDCs to be 12 
digits in length. Currently FDA-assigned NDCs are 10-digits and can be 
in multiple formats. The NDC for each listed drug in the United States 
is a unique 3-segment number, where the 3 segments are the labeler 
code, product code, and package code. The proposed standardized NDC 
would consist of three segments: a 6-digit labeler code, a 4-digit 
product code, and a 2-digit package code. If the proposed rule is 
finalized, FDA-assigned 10-digit NDCs would need to be updated to 
convert to the uniform 12-digit format by adding leading zeros to the 
respective segments.
    One expected benefit of the proposed rule, if finalized, is that 
the proposed standardized format would facilitate the adoption of a 
single NDC format by all stakeholders. Such an adoption would eliminate 
the need to convert NDCs from one of the FDA-prescribed formats to a 
different standardized format used by other sectors of the healthcare 
industry (e.g., healthcare providers and payors). Eliminating the need 
to convert NDCs should reduce potential errors caused by converting 
from the FDA-assigned NDC format to a different format used by other 
sectors of the healthcare industry. Standardization and adoption of a 
single format would also eliminate the need for additional quality 
control and validation by certain stakeholders, such as payors and 
prescribers, to ensure a drug product and its respective NDC are 
accurate; this is particularly important for insurance coverage and 
reimbursement claims. Another benefit of the proposed rule would be to 
avoid any potential risks to the public health from potential 
reductions in medication errors and risk of confusion. We do not have 
data to quantify these potential benefits and request comments.
    The costs to industry of converting current NDC codes to the 
proposed format would include one-time costs of updating software 
systems, new training for employees, coordinating labeling updates, and 
reading and understanding the proposed rule. Table 2 shows a summary of 
the quantified costs of the proposed rule. We estimate annualized costs 
would be about $12.4 million ranging from $6.1 million to $19.4 million 
using a 7-percent discount rate over a 10-year horizon. Similarly, we 
estimate annualized costs would be about $10.2 million ranging from 
$5.1 million to $16.0 million using a 3-percent discount rate over a 
10-year

[[Page 44046]]

horizon. The present-value of the estimated costs would be $87.1 
million ranging from $43.1 million to $136.3 million at both the 7-
percent and 3-percent discount rates.

                                    Table 2--Summary of Benefits, Costs, and Distributional Effects of Proposed Rule
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Units
                                            Primary       Low        High    --------------------------------------------------
                Category                   estimate    estimate    estimate      Year      Discount                                       Notes
                                                                                dollars    rate  (%)  Period  covered  (years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized millions/year..  ..........  ..........  ..........  ..........           7  ........................  ........................
                                                                                                   3
    Annualized Quantified...............  ..........  ..........  ..........  ..........           7  ........................  ........................
                                                                                                   3
                                         --------------------------------------------------------------------------------------
    Qualitative.........................  Potential reductions in annual
                                          audits, billing issues, cost of
                                          software, and medication error.
                                                                              ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Costs:
    Annualized Monetized millions/year..       $12.4        $6.1       $19.4                       7  ........................  ........................
                                                10.2         5.1        16.0                       3
    Annualized Quantified...............  ..........  ..........  ..........  ..........           7  ........................  ........................
                                                                                                   3
                                         --------------------------------------------------------------------------------------
    Qualitative.........................
                                                                              ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Transfers:
    Federal Annualized Monetized          ..........  ..........  ..........  ..........           7  ........................  ........................
     millions/year.                                                                                3
                                         --------------------------------------------------------------------------------------
    From/To.............................  From:
                                          To:                                 ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Other Annualized Monetized millions/  ..........  ..........  ..........  ..........           7  ........................  ........................
     year.                                                                                         3
                                         --------------------------------------------------------------------------------------
    From/To.............................  From:
                                          To:                                 ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Effects:
    State, Local or Tribal Government: No estimated effect..............................................................................................
    Small Business: One-time cost could be no more than 0.56 percent of annual revenue for some very small stakeholders with fewer than 5 employees in
     the insurance industry, 0.45 percent in the pharmaceutical industry, and 0.02 percent also for some very small stakeholders in the healthcare
     industry..
    Wages: No estimated effect..........................................................................................................................
    Growth: No estimated effect.........................................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We have developed a comprehensive Preliminary Economic Analysis of 
Impacts that assesses the impacts of the proposed rule. The full 
preliminary analysis of economic impacts is available in the docket for 
this proposed rule (Ref. 4) and at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

VIII. Analysis of Environmental Impact

    We have determined under 21 CFR 25.30(k) that this action is of a 
type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

IX. Paperwork Reduction Act of 1995

    This proposed rule contains information collection provisions that 
are subject to review by OMB under the PRA (44 U.S.C. 3501-3521). A 
description of these provisions is given in the Description section of 
this document with an estimate of the recordkeeping burden. Included in 
the estimate is the time for reviewing instructions, searching existing 
data sources, gathering and maintaining the data needed, and completing 
and reviewing each collection of information.
    FDA invites comments on these topics: (1) whether the proposed 
collection of information is necessary for the proper performance of 
FDA's functions, including whether the information will have practical 
utility; (2) the accuracy of FDA's estimate of the burden of the 
proposed collection of information, including the validity of the 
methodology and assumptions used; (3) ways to enhance the quality, 
utility, and clarity of the information to be collected; and (4) ways 
to minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques, when 
appropriate, and other forms of information technology.
    Title: Format of National Drug Code.
    Description: The proposed rule would require that the respondents 
identified below revise the format of their NDCs and would require that 
some of these respondents update any of their product labeling that 
include the NDC to incorporate the new NDC format. For drugs subject to 
a new drug application (NDA) or abbreviated new drug application 
(ANDA), the respondent would be required to report these labeling 
changes through an annual report; therefore, this proposed rule affects 
the reporting burden associated with Sec.  314.81(b)(2)(iii) (21 CFR 
314.81(b)(2)(iii)). For biological products subject to a biologics 
license application (BLA), the respondents will be required to report 
these labeling changes through an annual report; therefore, this 
proposed rule affects the reporting burden associated with Sec.  
601.12(f)(3) (21 CFR 601.12(f)(3)).
    Section 314.81(b)(2)(iii) requires the submission of an annual 
report containing a representative sample of the package labels, 
currently used professional labeling, patient brochures, package 
inserts, and a summary of labeling changes (or if no changes have been 
made, a statement to that effect)

[[Page 44047]]

since the previous report. Under this proposed rule, the change in the 
NDC format would result in a labeling change. We have previously 
estimated the reporting burden for submitting labels as currently 
required under Sec.  314.81(b)(2)(iii), and OMB has approved the 
collection of information under OMB control number 0910-0001. We are 
not re-estimating these approved burdens in this rulemaking. We are 
only estimating the additional reporting burden associated with the 
submission of labeling changes associated with the 12-digit NDC format 
under Sec.  314.81(b)(2)(iii). We have previously estimated the 
reporting burden for submitting labels as currently required under 
Sec.  601.12(f)(3), and OMB has approved the collection of information 
under OMB control number 0910-0338. We are not re-estimating the 
approved burden in this proposed rule. We are only estimating the 
additional reporting burden associated with the submission of labeling 
changes associated with the 12-digit NDC format under Sec.  
601.12(f)(3).
    One-time costs and annual operating and maintenance costs 
associated with the proposed rule are discussed in Section II.F--Costs 
of the Proposed Rule of the Preliminary Regulatory Impact Analysis 
(PRIA). However, many of these costs are not associated with the 
information collections subject to OMB review under the PRA but, 
instead, are associated with changes in their usual and customary 
business operations as a result of the new NDC format. Additionally, 
many of the costs discussed in the PRIA are incurred by firms other 
than the respondents described below.
    To minimize recordkeeping burden that would result from 
implementing the proposed changes to the NDC format, we provide for 5-
year delay in the effective date and a 3-year implementation period. 
The purpose of this phased-in implementation is to allow respondents to 
make the labeling change that would result from the proposed change in 
NDC format at the time of any periodic update that may be made during 
the 3-year implementation period. Based on the frequency at which drug 
labeling is updated, we anticipate that nearly all firms will be able 
to incorporate the labeling change required by this proposed rule as 
part of a labeling change that they intend to make unrelated to this 
proposed rule. Therefore, we believe that the incremental information 
collection burden associated with this proposed rule is likely to be de 
minimis. However, for purposes of this burden estimate, we have 
estimated the one-time burden associated with this proposed rule, 
assuming conservatively that all finished prescription drug products 
and all finished over-the-counter drug products include the NDC on the 
label and their label would be updated solely for the purposes of 
modifying the format of the NDC on their label.
    Description of Respondents: Manufacturers, repackers, relabelers, 
drug product salvagers, and private label distributors are subject to 
the regulatory requirements in 21 CFR parts 201 and 207, application 
holders are subject to the regulatory requirements of Sec.  314.81, and 
license holders are subject to the regulatory requirements of Sec.  
601.12.
    We estimate the burden of the information collection as follows:

                                                  Table 3--Estimated One-Time Recordkeeping Burden \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Number of
      Format of National Drug Code;           Number of     responses per   Total annual            Average burden  per response            Total hours
      implementing new requirements          respondents     respondent       responses
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section 201.25 (barcode labeling                   12,800            22.5         288,000  1............................................         288,000
 requirements); and part 207, subpart D
 (requirements for the NDC).
Section 314.81(b)(2)(iii) (other                    2,000               6          12,000  10 minutes (0.167 hours).....................           2,000
 postmarketing reports) or Sec.
 601.12(f)(3) (changes to an approved
 BLA).
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Figures have been rounded.

    We have characterized the information collection as a recordkeeping 
burden consistent with 44 U.S.C. 3502(13)(C), which defines the term 
``recordkeeping requirement'' to include records disclosed to third 
parties, the Federal Government, or the public. Our estimates are based 
on the following assumptions:
     We assumed that all listed drug packages include the NDC 
format on their label and that none of the respondents would be able to 
include these labeling changes into other labeling changes they were 
making during the transition period. As the change should not require a 
substantial redesign, but would only require a slight change to the 
existing NDC format already included on the label, we assumed that each 
label change would take a respondent 1 hour. Based on the drug listing 
database, we understand that there are approximately 12,800 respondents 
and 288,000 listed drug packages, resulting in an estimated burden of 
288,000 or 22.5 hours per respondent to change the labels for these 
products.
     For prescription drugs whose label changes would be 
reported in an annual report pursuant to Sec.  314.81 or Sec.  
601.12(f)(3) for biological products, there are approximately 2,000 
respondents that would submit reports and there are approximately 
12,000 active approved applications. This means that on average each 
application holder will need to submit 6 annual reports (12,000 active 
approved applications x 1 annual report per active approved 
application/2000 unique application holders). Information on listed 
drugs indicates there are approximately 120,000 separate, identifiable 
product packages that that are subject to an approved ANDA, BLA, or 
NDA. This means that on average each separate and distinct approved 
application includes approximately 10 separate and distinct product 
packages (120,000 unique distinct product packages/12,000 unique 
approved applications). Section 314.81(b)(2)(iii) requires firms to 
submit an annual report that includes a summary of any changes in 
labeling since the last annual report. Similarly, Sec.  
601.12(f)(3)(i)(A) requires manufacturers of biologics to include in 
their annual reports editorial or similar minor labeling changes. We 
expect that the updating of the NDC format on a label would necessitate 
a simple statement in the annual report declaring that the NDC format 
has been updated, so we have assigned an estimate of 1 minute for such 
statements per label. As each annual report will include 10 such 
declarations (one for

[[Page 44048]]

each unique product package), we estimate the burden to report these 
changes to be approximately 10 minutes per annual report. Thus, the 
total reporting burden would be 2,000 hours (2,000 respondents x 6 
annual reports per respondent x 10 minutes per annual report/60 minutes 
= 2,000 hours).
    To ensure that comments on information collection are received, OMB 
recommends that written comments be submitted through https://www.reginfo.gov (see ADDRESSES). All comments should be identified with 
the title of the information collection.
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted the information collection provisions of 
this proposed rule to OMB for review. These information collection 
requirements will not be effective until FDA publishes a final rule, 
OMB approves the information collection requirements, and the rule goes 
into effect. FDA will announce OMB approval of these requirements in 
the Federal Register.

X. Federalism

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13132. We have determined that 
this proposed rule does not contain policies that have substantial 
direct effects on the States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Accordingly, 
we conclude that the rule does not contain policies that have 
federalism implications as defined in the Executive Order and, 
consequently, a federalism summary impact statement is not required.

XI. Consultation and Coordination With Indian Tribal Governments

    We have analyzed this proposed rule in accordance with the 
principles set forth in Executive Order 13175. We have tentatively 
determined that the proposed rule does not contain policies that would 
have a substantial direct effect on one or more Indian Tribes, on the 
relationship between the Federal Government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
Government and Indian Tribes. The Agency solicits comments from tribal 
officials on any potential impact on Indian Tribes from this proposed 
action.

XII. References

    The following references are on display at the Dockets Management 
Staff (see ADDRESSES) and are available for viewing by interested 
persons between 9 a.m. and 4 p.m., Monday through Friday; they are also 
available electronically at https://www.regulations.gov. FDA has 
verified the website addresses, as of the date this document publishes 
in the Federal Register, but websites are subject to change over time.

1. HIPAA for Professionals, available at https://www.hhs.gov/ocr/privacy/hipaa/administrative/index.html (last accessed March 22, 
2021).
2. Eastern Research Group, Inc. (2003), ``The Pharmaceutical 
Labeling Revisions Cost Model,'' January 2, 2003, Contract No. 223-
94-8031, Task Order No. 8.
3. RTI International (2015), ``2014 FDA Labeling Cost Model.''
4. FDA, Preliminary Regulatory Impact Analysis, ``Format of National 
Drug Code,'' available at https://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

List of Subjects

21 CFR Part 201

    Drugs, Labeling, Reporting and recordkeeping requirements.

21 CFR Part 207

    Drugs, Reporting and recordkeeping requirements.

    Therefore, under the Federal Food, Drug, and Cosmetic Act, the 
Public Health Service Act, and under authority delegated to the 
Commissioner of Food and Drugs, the Food and Drug Administration 
proposes to amend 21 CFR parts 201 and 207 as follows:

PART 201--LABELING

0
1. The authority citation for part 201 is revised to read as follows:

    Authority:  21 U.S.C. 321, 331, 351, 352, 353, 355, 358, 360, 
360b, 360gg-360ss, 371, 374, 379e; 42 U.S.C. 216, 241, 262, 264.

0
2. In Sec.  201.25:
0
a. Revise the section heading;
0
b. Remove the word ``bar code'' and add the word ``barcode'' in its 
place; and
0
c. Revise paragraph (c)(1) introductory text.
    The revisions read as follows:


Sec.  201.25   Barcode label requirements.

* * * * *
    (c) * * *
    (1) Each drug product described in paragraph (b) of this section 
must have a barcode that contains, at a minimum, the appropriate 
National Drug Code (NDC) number in a linear or nonlinear format 
approved by the relevant Food and Drug Administration Center Director. 
Approved standards include those that meet European Article Number/
Uniform Code Council (EAN/UCC) or Health Industry Business 
Communications Council (HIBCC) standards. Additionally, the barcode 
must:
* * * * *

PART 207--REQUIREMENTS FOR FOREIGN AND DOMESTIC ESTABLISHMENT 
REGISTRATION AND LISTING FOR HUMAN DRUGS, INCLUDING DRUGS THAT ARE 
REGULATED UNDER A BIOLOGICS LICENSE APPLICATION, AND ANIMAL DRUGS, 
AND THE NATIONAL DRUG CODE

0
3. The authority citation for part 207 continues to read as follows:

    Authority: 21 U.S.C. 321, 331, 351, 352, 355, 360, 360b, 371, 
374, 381, 393; 42 U.S.C. 262, 264, 271.

0
4. In Sec.  207.33, revise paragraph (b) to read as follows:


Sec.  207.33   What is the National Drug Code (NDC), how is it 
assigned, and what are its requirements?

* * * * *
    (b) What is the format of an NDC? (1) Except as described in 
paragraph (b)(2) of this section, the NDC must consist of 12 digits, 
divided into three segments as follows:
    (i) The first segment of the NDC is the labeler code and consists 
of 6 digits. The labeler code is assigned by FDA.
    (ii) The second segment of the NDC is the product code and consists 
of 4 digits.
    (iii) The third segment of the NDC is the package code and consists 
of 2 digits. The package code identifies the package size and type of 
the drug and differentiates between different quantitative and 
qualitative attributes of the product packaging.
    (2) An alternatively formatted NDC that is approved for use by the 
relevant Center Director may be used for the following HCT/Ps if they 
are minimally manipulated: Hematopoietic stem/progenitor cells derived 
from peripheral and cord blood, and lymphocytes collected from 
peripheral blood.
* * * * *

    Dated: July 11, 2022.
Robert M. Califf,
Commissioner of Food and Drugs.
[FR Doc. 2022-15414 Filed 7-22-22; 8:45 am]
BILLING CODE 4164-01-P


