AT DEPARTMENT OF HEALTH AND HUMAN SERVICES

FOOD AND DRUG ADMINISTRATION

CENTER FOR DRUG EVALUATION AND RESEARCH

**PUBLIC MEETING**:

**PROPOSED CHANGES**

**TO THE NATIONAL DRUG CODE (NDC) SYSTEM**

Monday, December 11, 2006

9 o\'clock a.m.

Advisors and Consultants Conference Room 1066

5630 Fishers Land

Rockville, Maryland

PARTICIPANTS

Panel Members:

> Michael Bernstein

Director, Division of Regulatory Policy II\
Office of Regulatory Policy, CDER, FDA

John Gardner, M.D., DrPH

Director, Division of Compliance, Risk

Management and Surveillance, CDER/FDA

Judith A. Geisler, R.Ph.

Acting Director, Division of Finance and

Operations, Centers for Medicare and

Medicaid Services

Charise S. Kasser

Consumer Safety Officer, Division of

Surveillance HFV‑212, Center for

Veterinary Medicine

Randy Levin, M.D.

Director for Health and Regulatory Data

> Standards, FDA, Associate Director of
>
> Medical Informatics, CDER

Anita Richardson

Associate Director for Policy, Office of

Compliance and Biologics Quality,

CBER/FDA

[C O N T E N T S]{.underline}

Opening Remarks:

Michael Bernstein 5

Overview:

John Gardner, M.D., DrPH 7

Introduction of the Panel:

Michael Bernstein 29

Public Speakers:

Kay Morgan

NCPDP 31

John M. Coster, Ph.D., R.Ph.

NACDS 36

John Klimek, R.Ph.

Super Valu 43

John Roberts

GS1 US BarCodes and eCOM 51

Diane Servello

Watson Laboratories, Inc. 65

Dr. Thomas F. Willer

Hospira, Inc. 74

Scott M. Melville

Healthcare Distribution Management

Association 84

Open Discussion 104

Public Speakers:

Heidi Horn

Perrigo Company 111

Madeline Palla

Animal Health Institute 162

Marc J. Meteyer

Compressed Gas Association 169

[C O N T E N T S]{.underline} (Continued)

John K. Willenbrock

Gas Regs, Inc. 176

Paul J. Larsen

Consumer Healthcare Products Association 182

A. Wes Siegner, Jr.

Hyman, Phelps & McNamara, P.C. 199

Carolyn D. Jones

Advamed 204

Pat Distler

ICCBBA 211

M. Allene Carr‑Greer, MT (ASCP)SBB

AABB 229

Open Discussion 245

Closing Remarks 253

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**Opening Remarks**

MR. BERNSTEIN: I\'m Michael Bernstein. I am the Director of the Division
of Regulatory Policy II in the Office of Regulatory Policy in CDER. I
will be moderating today\'s meeting on the National Drug Code System.

As you all know, FDA published its electronic drug registration and
listing proposed rule at the end of August and we recently extended the
comment period to January 26th. We also announced that we would hold
this public meeting on the NDC Code topic.

The purpose of this meeting is to solicit public input on the proposed
changes to the National Drug Code system that is contained in that
proposed rule. We have a large number of speakers who have requested
time today and time is limited, as I said, so please try to limit
yourself to the allotted time on the agendas that I think have
circulated. If, after you are introduced, you could state your name and
affiliation and move right to your presentation, that would be
appreciated.

We also have a panel of FDA staffers and a representative from CMS. They
are largely going to listen today although they may ask some questions
of presenters. But we are going to try to keep those questions limited
to clarification questions.

The role of FDA here today is to listen to the speakers and consider
your concerns and your viewpoints on issues relating to the National
Drug Code system. So please don\'t expect to hear guidance, substantive
guidance, from the panelists.

We have also tried to schedule some time for audience comments and
participation at the end of both sessions. Time permitting, we will do
that. There will be two microphones.

Before we get to the presentations, Dr. John Gardner, of the Office of
Compliance, is going to open the meeting with a very brief overview of
the electronic drug registration and listing proposal on the NDC issues
and review the specific discussion topics very briefly that were raised
in the meeting notice.

After that, we will introduce the panel and then we will get right to
the public presentations. So, without further ado, Dr. Gardner?

**Overview**

DR. GARDNER: Good morning. I wanted to briefly give you an overview of
what we are trying to propose and where we are going in terms of
electronic drug registration and listing. I want to emphasize that where
we are going is very flexible. We are not moving forward with anything
definitive until we are through reviewing all the comments that have
come in on the proposed rule and that resolve a lot of the issues that
are raised there.

So the rule, itself, really has five major components that are changes.
The first is that there is electronic submission of the registration
listing information. We are developing two systems to do that, one for
electronic registration, which we call the Drug Facility Registration
Module, which is a component of the FDA Uniform Registration and Listing
System.

The second is a program we call eLIST which has been formulated and is
about to be developed.

The second piece is electronic submission of the content of labeling.
That is already a requirement for application prescription drugs. This
rule would extend that requirement to all drugs that the content of
labeling, what we call the structured product labeling (SPL), would be
required to be submitted electronically.

The third change is that FDA would issue the complete NDC number, not
just the labeler code as we currently do. I will talk to you a little
bit more about that later. The NDC directory will then become the public
posting of all FDA‑issued NDC numbers and that will be coordinated with
the DailyMed website.

The fourth change is that the NDC number will be required to be printed
on product labels. That requirement is proposed to be the appropriate
NDC number which is the last firm which has handled the product‑‑that
is, changed the product.

Let me now clarify the difference between a drug and drug product. A
drug is, for example ampicillin. A drug product example ampicillin, 250
milligram tablets made by a specific company and marketed by a specific
company in bottles of 30. Each drug product has a unique NDC number and
there are often many, and sometimes, hundreds of NDC numbers for each
drug.

This product would have to have the NDC number printed on it and the
reason, our thinking on why it has to be the most recent, is so that we
can trace that back from the private‑label distributor to the relabeler,
to the repacker, to the manufacturer so we can deal with specific
product issues.

Then, finally, the final change proposed is that firms must recertify
their listing information every six months. Currently, they have to
update their information in June and December if it has changed, then
this would require that they come in and certify that it has not changed
or change it if it has changed.

So those are the five major components of the proposed rule. I want to
now talk to you about our drug registration listing system. This program
comes under my division in the Office of Compliance.

Drug‑establishment registration and drug‑product listing was enacted to
protect the public from adulterated and misbranded drugs. Drug
establishments must register annually to provide contact and location
information. Firms must list each of their drug products that are being
marketed in the United States, giving names and ingredients, et cetera.

We use these data in the system for many purposes. I think it is central
to almost everything we do, being able to identify the drug products. It
is the repository of NDC numbers. Registration currently provides, and
in the future would provide, the labeler component of the NDC.
Registration gives us location and contact information so that we can
identify who is making drugs and it identifies sites for inspection.

Listing provides the manufacturing information, ingredients information,
for marketed drugs. It helps us to identify violative drug products. It
assists with control of drug imports. The electronic system will support
the SPL DailyMed initiative. Its key role is to provide linkage of a
drug product, a specific drug product, with the labeling, with the
approval status, with the marketer and with the manufacturer so that we
can know each of these components related to each specific drug product.

It helps counterterrorism, supports our FDA safety databases by, again,
linking the specific products to the issues, helps us in drug shortages.
We have used it frequently to identify products containing an ingredient
is being recalled; we use this system to identify the manufacturers and
the products that are out there that have that ingredient.

In Hurricane Katrina, we were one of the first people who were called,
saying, \"What firms might be impacted by the hurricane? Is that a
problem we need to worry about in terms of drug supply and shortages?\"
and so on.

We also have the repository of drug‑product labeling which currently is
in paper system but, under the proposed rule, we would make electronic.

The NDC is also used in drug billing and reimbursement. The Centers for
Medicaid and Medicare Services use our information to determine drug
eligibility for their rebate and reimbursement programs. The NDC
directory is widely used for lots of reasons. Nearly all pharmacy
billing systems and reimbursement systems use the NDC. So we think it is
extremely important to keep that information complete and accurate.

The history started way back in the \'70s, a paper system. Our current
Oracle system was developed in 1991 and we are now developing the new
electronic system with the two components that I mentioned.

We have about 25,000 active facilities registered. We are estimating
approximately 200,000 specific drug products on the market. We do not
have all of those in our electronic system. Due to resource limitations,
part of those are still in paper systems. One of the reasons for this
rule is to change that and get everything electronic.

We spent a lot of money processing about 10,000 registration forms and
30,000 listing forms each year. Just the data‑entry process, itself, is
nearly a million dollars a year that we are struggling to maintain.
Because of limitations, we haven\'t been able to maintain everything in
the electronic system.

This slide provides a list for you of the information we have for each
firm and each manufacturer and of the products and the functions related
to those product. You can read these on the slides when we post them.

In the future, we are already moving toward an electronic drug
registration and listing system. We would provide the electronic
submission on an on‑line basis for registration and, as I will mention,
through submission of electronic labeling for drug‑product listing, this
will greatly improve the accuracy and completeness of our system,
minimize data‑input requirements (I think both for us and for industry),
and allow more focus on the safety and regulatory issues.

Our plans are to implement these new features of registration listing
and, in the process, implement partially automated validation of the
listings so that we can avoid a lot of the manual review that would be
necessary otherwise.

First, let me talk about drug‑establishment registration. This is
already in the works. Our system is already partially developed and
implemented internally, the drug‑facility registration module (DFRM). We
will soon be providing access for industry so that industry will be able
to get an account in FURLS, log in to DFRM and then enter and/or update
their registration electronically. All paper forms will eventually be
eliminated and annual updating will be greatly simplified. I will show
you that in just a minute.

This will be the central system through FURLS that will be the master
inventory of drug establishments and their official contact and importer
information.

This is a screen shot of FURLS, with hypothetical data. Basically, as
you enter, you go through an eight‑step process that takes about ten
minutes if you have the information ready. When you update, you will go
back and pull up the information that is already there through this
process shown on the slide.

As you see here, you just scroll down through the page. You get to
Section 1. You look at it. If you have changes, you click the edit
button that takes you to this section to do the editing. Section 1 gives
you the type of registration and the type of facility and your
registration number. It will be controlled by a password system so that
only you will be able to access it.

Then you get to Section 2 which gives the name, address and so on. Then
you get to Section 3 which goes through your preferred contacts and
contact, address. Then you go to Section 4 which gives your
parent‑company information. Section 5 is your official contact
information and section 6 is trade names.

Section 7 is your U.S. agent information if you are a foreign firm. Then
Sections 8, 9 and 10, I didn\'t give you slides of, but they are
importers in Section 8. Section 9 is the type of activities conducted in
the facility and Section 10 is a certification statement.

So let me move from registration toward listing. I'm presenting the way
we are designing Listing, and our current thinking is to run this using
structured product labeling that is, your electronic product label. The
electronic SPL requirement in XML format is already in place for the
content of labeling for application prescription drugs. It allows
electronic edit, search, review, and archiving of drug labeling. That
drug labeling is the prescriber package insert or the content of
labeling, as we define it.

In October of last year (2005), industry started providing SPL for
application human prescription drugs and, through their annual reports,
should have submitted all of those by now. Those are being processed and
posted, once their processing is complete, at the National Library of
Medicine's DailyMed website. You can go to that website and see the
information there that gives you the entire content of labeling.

Of most interest right now is, at the end, you will see a table, a data
table. That data table is basically the listing information. So our
proposed eLIST system will capture that data table and utilize that for
electronic drug listing.

So this listing information and the SPL information will all integrate
eventually with electronic prescribing and public drug information
access programs.

So our eLIST system is being designed around these SPL submissions and
will extract the coded data elements from the SPL and then, for the
small amount of information that is not in the product labeling,
industry will log in, through FURLS, and add that additional
information.

Then the system we are developing will electronically validate as much
of the listing information as possible including the structure and
format of the NDC number. Our current thinking is that we will have the
SPL submitted with the company\'s proposed NDC number on it. It will
validate and verify that it meets the required rules‑‑that is, the
format and the structure.

The labeler code has to be the right labeler code. The product code has
to be the same for the same product and different for a different
product, and so on. Then, if it validates the format and structure, it
will be accepted and the company immediately notified that that NDC
number is accepted.

It will not be legal NDC number until the entire drug‑approval and
listing process is complete. Once that is done, then it will be
issued‑‑that same number will be issued and posted in the NDC Directory
and the DailyMed website along with electronic labeling and other FDA
information systems.

eLIST will also electronically validate that that drug has been approved
or that the OTC Monograph requirements have been met and then also we
will check on the labeling approval. Once that is completed then, as I
mentioned, all this will be posted.

So this system is designed to greatly facilitate drug listing both for
industry and for us and it will improve the accuracy and completeness of
the information. It will eliminate having to enter information twice.
You do it once on your drug label and never have to do it again.

Every time you change your drug label, you resubmit that to FDA and it
will automatically validate through the same process again. Parts of the
process may require manual validation. Those may take a little bit
longer, but the automated validation components will happen immediately.

The validation will have to be implemented so we maintain flexibility.
Our current thinking is that the validation would verify that the NDA is
approved, or ANDA, or that the product meets the over‑the‑counter drug
monograph requirements if it is an over‑the‑counter drug without an NDA.

This year, we recalled two brands of vapor patches, over‑the‑counter
vapor patches. These companies really should have been notified at the
time they listed the products that these require an NDA, as do all
extended‑release products, for example. So if the system automatically
determined that you have an extended‑released product without an NDA,
then you would get a notification back that this requires an NDA to be
legally marketed.

It would also provide the accurate linkage with the NDC Directory, with
FDA\'s drug‑information systems, and tie together everything we have
about drugs and link them specifically to those individual unique drug
products.

This is all a part of a larger program whose goals are to provide
accessible electronic medication information‑‑DailyMed is a big piece of
that‑‑and eventually to provide for electronic drug prescribing and,
secondly, to provide accurate identification of drug products and
biologic products on the market.

This goes back to the electronic labeling rule which applies to
application prescription drugs. It goes back to the Physician Labeling
Rule which prescribes the format of that electronic label. Then this is
the drug listing rule. Through this process of information collection,
the manufacturers, repackers, relabelers, submit the types of
information and the data coding of that information, the electronic
listing and medication information comes forward.

The drug labels (the SPLs) are processed through a program called ELIPS,
where they are reviewed, edited and approved. The electronic listing
would be processed through eLIST. Once all of this validation and
quality control is determined, then they become public and are made
publicly available in standardized form to populate standardized
electronic data systems such as DailyMed which then could be downloaded
to use as a source for other information systems.

This illustrates this listing process for application drugs that have
their SPL submitted through the application process. That information
will be captured through this listing system. The NDC will be pulled and
validated and that can happen as soon as the labels have been submitted
at any time, even with a preliminary label being submitted. Then the
validation of the approval status goes through the NDA or ANDA process.
For drugs that don\'t go through that process we will have some
electronic validation of labeling structure, format and, perhaps,
content, to the extent we can do it electronically. But some of that
will have to be done manually. What I was talking about there is non
application drugs with SPL. Then you have certain categories of drugs
without SPL, like bulk ingredients, that would come in. We would have a
system there for them to enter that information or submit in XML or a
to‑be‑specified format.

Then you have the repacker, relabelers, who would come in with their
products. They simply have to submit the NDC number of the listed
product. If they have a properly listed product, they simply submit that
NDC number and then we pull the information from that listed product and
they would add what they need to change this to the drug labeling, like
the name and how supplied section. Then their SPL would be created for
them.

Again, the NDCs that they submit will all be validated. The listing and
labeling information would be validated. Then those would be posted to
FDA and NLM sites for access electronically to the healthcare community.

The other piece of this is to go in and update information and the
semi‑annual certification. Our thinking, at present, is that, since the
law says June and December, on June 1, you would get an e‑mail that
says, here is your product that needs to be updated.

You click a button on that e‑mail. It brings you right to the
certification statement where you review your information. Then you can
review your information and update at that time.

That is another piece I didn\'t mention. Part of the electronic
submission proposed rule requires e‑mail addresses and fax numbers,
which are not in the current regulation.

So that is really an overview of our thinking and where we are trying to
go with electronic registration and listing.

Now I want to talk just a little bit about the scope of the meeting. We
are holding this meeting to get comment on the NDC issues related to the
proposed rule. We have listed a few of them that are major points. The
rule is open for comment until January 26^th^. At this meeting, we are
trying to limit our discussion to the NDC‑related issues.

One is that the NDC number is printed on the product label and that it
be the appropriate NDC number of the last firm handling the product.
Again, that is for the public‑health purpose of being able to trace the
specific product back to the original manufacturer.

The format of the printed NDC number‑‑that is, it will be preceded by an
"NDC". The example I have given here is not a current legal NDC. But I
put it up this way because this is how we carry it in our database. We
carry it in our database as three separate fields, the labeler code, the
product code and the package code. Under current regulations, that has
to collapse to 10 digits by using a 5-4-1 or 5-3-2 or 4-4-2
configuration. That collapsing, then, causes a lot of confusion. So, in
the bottom bullet, we are requesting comment on the impact of expanding
to 11 digits which, I believe, is the Medicare‑Medicaid standard.

We felt like we are constrained to 10 digits because of barcode issues.
But, if that is not the case, I think it might be better for everyone if
we go to 11 digits. We would like to hear comment on that issue.

The second point is that FDA assigns and issues the full NDC number and
we feel that that is critically important to do in order to control the
use of these NDC numbers and make sure that they are formatted properly.
Again, with the automated validation, we would then be able to inform
firms immediately of product requirements they may not have been aware
of, such as they require a new drug application or they are not
compliant with the OTC monograph, and so on. Again, we would publish, in
the NDC Directoy, the listing of all legal or valid FDA‑issued NDC
numbers.

The third point is NDC number use and restrictions; that is, the product
code must change if the product changes, if the formulation changes or
the manufacturer changes. That, again, is identifying unique products.

I know there is an issue with inactive ingredients but there are certain
inactive ingredients that some patients are allergic to, and so on. So
we need to be able to identify those products that have different
inactive ingredients as different products and, therefore, different NDC
numbers.

The NDC number must be the same if it is the same formulation and
manufacturer or if you discontinue a product and reintroduce that
product without change, then it has to be the same NDC number and not a
new one. Also, you can\'t use the same NDC number for different
products. I think that is a necessary part of uniquely identifying each
drug product on the market.

Finally, that it is not used for non‑drugs. I know there are concerns
here about reimbursement issues. We have no role in reimbursement, but
we do want to assure that reimbursement systems understand which
products are drugs and which are not. Non‑drugs do not have NDC numbers.
So devices or human foods that are not considered drugs by FDA then
would be reimbursed under their appropriate device or other category,
rather than as drugs.

We have worked with the Centers for Medicaid and Medicare Services over
the last several years to remove thousands of products from their drug
reimbursement system because they are medical devices or human dietary
supplements.

There is tremendous confusion because the initial assumption is always
that, if a product has an NDC number, then it is a drug. That has not
been the case, but we think inappropriately so. So we want to fix that
in this rule. So we would appreciate having comment on that issue as
well.

Fourth, another issue is the NDC chain; that is the chain of NDC numbers
from the private‑label distributor\'s product back to the relabeled
product back to the repackaged product back to the manufacturer. It is
currently proposed that this chain be confidential because it might
violate some proprietary business information.

So we, at FDA, would be able to be able to trace back every product, but
the public wouldn\'t. Whether we should make that publicly available is
an issue we would like to hear comment on because we feel that, for
public‑health purposes, it might be appropriate to make that information
public.

Finally, we have already talked about the configuration of the NDC. We
are not proposing changing the basic configuration of the NDC
number‑‑that is labeler code, product code and package code, but rather
that we make the format consistent for all drugs. If we could go to
eleven digits it might eliminate confusion, if it doesn\'t cause a lot
of problems. So we would like to hear comment on that issue.

That is all I have. I will turn the time back to Michael.

MR. BERNSTEIN: Thank you, John.

**Introduction of the Panel**

MR. BERNSTEIN: At this point, I just want to introduce the panel. Before
I do that, I wanted to give some thanks, I don\'t know if any of you
have ever been involved in the planning for a meeting like this, but
there are an incredible number of details and things that need to be
taken care of to make sure that things run smoothly.

I just wanted to extend special thanks to Lakshmi Cherukuri in the
Office of Compliance who, among many other people, worked exceptionally
hard to put all the details together so everything is functioning today,
so the microphones are working and everything else. Thank you, Lakshmi,
and all of your co-workers.

The panel today; you just heard from John Gardner. He is the Director of
the Division of Compliance of Risk Management and Surveillance in the
Office of Compliance at CDER. Also on my left is Dr. Randy Levin. He is
the Director for Health and Regulatory Data Standards and the Associate
Director of Medical Informatics for CDER.

To his left is Judith Geisler. She is the Acting Director of the
Division of Finance and Operations in the Centers for Medicare and
Medicaid Services. On my right is Anita Richardson, the Associate
Director for Policy in the Office of Compliance and Biologics Quality in
CBER and Charise Kasser who is a consumer safety officer in the Division
of Surveillance in the Center for Veterinary Medicine, also on my right.

With that, again, if I forgot to say it in my initial remarks, I invite
the registered speakers on the agenda to come up to the podium and speak
from here.

The first speaker is Kay Morgan with the National Council for
Prescription Drug Programs, NCPDP.

**Public Speakers**

MS. MORGAN: Good morning. My name is Kay Morgan. I am here representing
the National Council of Prescription Drug Programs or also known as
NCPDP on this NPRM regarding the NDC numbers. Currently, I am an NCPDP
Workgroup 2 Product Identification Co‑Chair and I have formerly served
as a member of the NCPDP Board of Trustees.

My fellow Co‑Chairs, Ann Johnston of Medco and John Klimek of SuperValu,
as well as Lynne Gilbertson, the Director of Standards Development for
NCPDP are in attendance with me.

In addition to my NCPDP role, my professional responsibilities include
the population of a drug database with information including the NDC
number. I have previously been responsible for the population of similar
data that include NDCs and to two other databases.

NCPDP is a nonprofit ANSI‑accredited standards development organization
consisting of more than 1300 members who represent computer companies,
drug manufacturers, pharmacy chains, independent pharmacies, drug
wholesalers, insurers, mail‑order, prescription‑drug companies,
telecommunication vendors, prescription‑drug provider softwares,
physician services, service organizations, government agencies and other
parties interested in electronic standardization within the pharmacy
services sector of the healthcare industry.

NCPDP has sent a written response to the FDA regarding this NPRM. My
statements will speak to and highlight the NCPDP written response. The
response was created through NCPDP\'s process of a task group which is
open to all interested parties.

They create the initial recommendations for the letter. The task group
consisted of participants from different sectors of the
pharmacy‑services industry. The letter was then reviewed during an NCPDP
November work group meeting and, again, by different sectors of the
pharmacy‑services industry and then was approved by the NCPDP Board of
Trustees.

The NCPDP comments are: according to its interpretation of NPRM, NCPDP
applauds the recommendation to disallow re‑use of an NDC number once it
is discontinued. Additionally, NCPDP highly approves the retention of
the basic core NDC enumeration system, the requirement of a new NDC when
a physical change is made and when an inactive ingredient change is
made.

It is our understanding that the NDC will be part of the SPL initiative;
as such, the inclusion of the product image from the manufacturer as
part of the NDC listing would further enhance patient safety. Keeping
this current system will prevent the disruption in the electronic
exchange of information that occurs today between patients, pharmacies,
processors, insurers and suppliers.

Disallowing the re‑use of an NDC and requiring a new NDC when there is a
significant change to a product will prevent the confusion that occurs
in today\'s market when an NDC is re‑used. Data for the product that was
represented by the NDC must be stored off and saved so as to not
conflict with the new information for the new product.

When attributes of a product change without an NDC change, many
databases simply overlay the old information with the new information as
there is no other option and the old product may still be in the
marketplace. This causes much confusion for the pharmacy and the
patient.

Regarding the bar‑code questions, NCPDP is very pleased to see that this
rule allows for the barcode to be continued as part of the label. NCPDP
encourages the use of the barcode to be used for the container labeling
as well as on the packaging labeling. Barcoding of products has been
used to help correctly identify that the right product is being
dispensed. It is vital to many quality‑assurance systems and pharmacies
and to patient safety so the product being administered can be verified
as the correct product.

Regarding the National Drug Code question. NCPDP agrees with this
restriction cited for the use of the NDC number. Having seen
inappropriately assigned NDCs, we support the FDA oversight of NDC
assignment. In this rapid changing medication environment, the
assignment must occur quickly.

NCPDP also agrees with the requirements for the electronic submission of
the NDC so that the process can occur rapidly and it will minimize
errors in transcription. Regarding the other postmarketing reports,
NCPDP supports this requirement that the list remain current with
actively marketed products and would encourage the FDA to use their
existing posting processes, their listservs, to provide notification of
change to the NDC listing. Additionally, NCPDP encourages the FDA to
apply the same requirements to products listed in Part 330 human drugs
which are generally recognized as safe and effective and not misbranded
and to products listed in Part 610, general biological products
standards.

Regarding the general conditions for general recognition of safe,
effective and not misbranded, NCPDP agrees with the listing of these
products.

Regarding Part 601, the licensing of biologicals, NCPDP supports the
requirement for applications for biologics licenses procedures for
filing that the list remains current with actively marketed products and
would, again, encourage the FDA to use their existing posting processes
such as the listserv to provide notifications of changes to the NDC
listing.

Thank you for the opportunity to present for NCPDP.

MR. BERNSTEIN: Do any of the panelists have any follow up questions for
Kay?

If not, our next speaker is John Coster, Vice President, Policy and
Programs, for the National Association of Chain Drug Stores.

DR. COSTER: Thank you very much. I am John Koster, Vice President of
Policy and Programs with the National Association of Chain Drug Stores.
I am pleased to present comments today at this public hearing regarding
FDA\'s proposals to change the way that NDC numbers and used. We are a
trade association of approximately 188 companies representing about
35,000 community‑based retail pharmacies. We appreciate the opportunity
for the public hearing and the extension of the deadline for submission
of comments given all the other rulemaking things going on in the world
today.

Our members include small and large chain‑operated pharmacies including
traditional chain drugstores, supermarkets and mass merchandise
pharmacies. We are the largest provider of outpatient retail
prescriptions. We provide about 70 percent of the approximately 3.1
billion prescriptions dispensed. But changes to the NDC numbers affect
our industry and independent pharmacies as well which are about,
collectively, 55,000 pharmacies. We will both be impacted by these
changes.

As you will probably hear throughout the day today, the entire system,
all the way from the manufacturer to the wholesaler to the payer uses
the NDC number. I will list these; to order, track, warehouse, account,
distribute, prescribe, dispense, bill, reconcile payment and perform
clinical functions on prescription drugs and healthcare products. So
changes to this system, obviously, depending upon what they are, have an
impact up and down the line. No system is perfect, but NDC scheme is
working and has worked well to date.

NDC changes affect our industry in many ways.  Our entire business
model, as I said, os our ability to provide safe and effective
pharmaceutical care to patients. It affects us as purchasers of
repackaged drugs, as sellers of medical equipment and supplies such as
diabetic testing supplies, as private‑label distributors of
over‑the‑counter drugs. Many of our members have their own private‑label
brands and many of our members also warehouse their own drugs as well.

My colleague from SuperValu, John Klimek, will discuss some of the
operational issues of the changes. I wanted to focus my remarks on a
particular part of the rule, specifically as it relates to the
requirement that repackagers place their own NDC number on the drugs
that they repackage.

This is a change in policy that concerns our industry as it relates
specifically to the repackaged drugs that we purchase and use in our own
pharmacies.

In summary, what we would like to ask is that the agency consider, in
the final regulation, that the current exemption that it has generously
provided to a specific class of repackagers‑‑that is retail pharmacy
service repackagers‑‑be allowed to continue under the final rule when
the rule was made final.

This exemption has allowed these repackagers to place the originator
manufacturer\'s number, the NDC number of the originator manufacturer,
on the packaged product rather than their own NDC number.

It is critical for several reasons. Based on long‑standing FDA guidance
and universal commercial practice, the retail pharmacies\' supply
dispensing payment and reimbursement systems currently rely on the use
of the original manufacturer\'s NDC number for branded single‑source
drugs.

We are not asking the agency to grant a broad exemption for all
repackagers from the requirement that they use their own NDC because
most repackagers, in our view, are acting more like manufacturers than
they are traditional retail pharmacy service repackagers. We are only
asking that the agency continue this narrow exemption that it has
provided to date for retail pharmacy service repackagers for a limited
number of drugs.

The services that these repackagers provide us are invaluable. They help
enhance efficiency in the retail pharmacy marketplace and enhance
patient safety. If these repackagers were to go away, as we think is
possible under the rule as proposed, they would be eliminated and that
would have patient safety implications.

The repackaging of drugs for retail pharmacy distribution, in our view,
is different from other repackaging. All this repackaging is is simply
repackaging activities by pharmacists from hundreds of individual or
thousands of retail pharmacies to a single efficient operation that
repackages drugs into quantities that are typically dispensed to
patients by these same pharmacies.

While this type of repackaging is done for efficiency reasons, it often
also provides important patient safety benefits. Rather than having
repackaging occur in hundreds of thousands of different pharmacy sites,
the central retail service repackager operation reduces costs, reduces
the potential for pharmacy‑based repackaging errors and reduces the
amount of time that the pharmacy needs to be involved in repackaging
medications rather than interacting with patients.

Retail pharmacy computer systems use the original manufacturer\'s NDC
number to determine what product is identified for dispensing purposes.
At this time, in the retail‑pharmacy setting, the repackager NDC numbers
are not used. In fact, many of them do not have their own. But
retail‑pharmacy service repackagers do not have their own NDC numbers.

For them to be used in the retail‑pharmacy systems, each would have to
be assigned a number. The number would have to be maintained by the
repackagers and recognized by different database companies, PBMs,
insurance companies, Medicaid and pharmacy software systems.
Introduction of multiple repackagers into the marketplace for which no
reimbursement metrics exist, such as AWP, WAC or AMP, would create
significant disruption in the pharmacy supply chain.

Mandatory use of repackager NDC numbers, the retail‑service repackager
NDC numbers, will also place a significant burden on retail repackagers
due to the Medicaid drug rebate requirements under Section 1927 of the
Social Security Act. Because State Medicaid payments and calculations
are linked to NDC numbers, repackagers would be newly obliged to pay a
substantial rebate fee at a statutory minimum of 15.1 percent of the
AMP. This fact alone could eliminate these repackagers in the
marketplace.

It is also likely that changes in the FDA policy will create
complications in accurate billing and rebate collections for states.

In summary, we ask, for the reasons mentioned, that the FDA in its final
rule allow for a continuation of its current policy that allows a small
number of retail‑pharmacy service repackagers to continue to place the
original manufacturer\'s number of the repackaged product rather than
their own.

We appreciate your consideration of this request.

MR. BERNSTEIN: Any questions from the panel? Thank you. Next up is John
Klimek, the Manager of RxView SuperValu.

MR. KLIMEK: Good morning. My name is John Klimek. I work for SuperValu
Pharmacies in the capacity of managed care, third‑party billing and pre‑
and post‑editing of pharmacy claims using an internal application.

Thank you for the ability to speak in front of you this morning on the
proposed rule for NDC number. In response to the agency assignment of
NDC, pharmacies today depend on the integrity, intelligence of the NDC.
We applaud the FDA\'s efforts in assuring that integrity remains intact.
Additionally, we approve the continuation of the core NDC enumeration
system. With the advent of Medicare Part D, pharmacy billing for
prescription and non‑prescription DMA products accounts for over 90
percent of pharmacies\' daily business. Therefore, it is very important
that pharmacies continue to rely on the intelligence with the NDC for
identification and billing.

Today, we use and depend on each component of the NDC number; the
labeler, product and package code. Depending on these individual codes
helps pharmacies and other entities develop formulary
inclusions/exclusions and drug‑utilization review. Also, when product
FDA recalls are sent from the FDA and it usually involves one labeler
and product code and all package sizes, we often use a wild card for the
package code to be certain we are in compliance with that recall
information.

Systems in some cases use general drug identifiers such as GCN, generic
code number or GPI, generic product identifier, to program for
categories of drugs. But, it is the structure of NDC number that gives
specificity down to the product and manufacturer level.

The NDC touches many integral pharmacy systems. Any change to the
expected 10‑digit NDC format will have far‑reaching effects both
financially to those company systems as well as potential patient safety
consequences.

Some examples of pharmacy systems that rely on the current 10‑digit NDC
structure are the pharmacy‑prescription system for fill and refill,
drug‑file data, drug interactions, drug‑allergy and patient‑counseling
information, drug‑order information, prescriptions on file, pricing
formulas, third‑party billing and reconciliation, transaction history
reports, reports such as DEA reports, customer‑profile reports,
drug‑utilization reports, customer‑encounter reports, compliance
reports, and so on.

In response to new NDC number when change of inactive ingredient, we
support the proposal in a rule that would require that a new NDC of drug
products would change when certain changes are made in the composition
of the drug product such as active ingredients.

We have seen many situations in which a manufacturer has changed the
active ingredient‑‑of the ingredients but has neither changed the NDC
number nor changed the name of the drug. We agree that the NDC number of
marketed prescription‑drug products should change when active
ingredients change. However, we urge the agency to consider whether the
number of potential modifications listed in the proposed rule would
require an NDC‑number change.

While we agree the NDC numbers should identify unique products and
packaging, we are concerned that it may be difficult to keep up with all
the NDC changes from a pharmacy system in operational perspective. These
concerns also filter into patient‑safety implications.

The NDC is in most, if not all, pharmacy systems and prescription data
is key indicator. If an NDC number changes on a standing prescription
order, for whatever reason, it forces that pharmacy to rewrite that
prescription in assigning a new prescription number. Doing so often
causes confusion with the patient and sometimes the physician.

In response to dietary supplements and medical devices, many dietary
supplements and medical devices are billed each and every day for many
Medicaid and Medicare patients along with other private payers. Each of
these products today have either a UPC or an NDC number. Pharmacies bill
using either the true NDC number or, in some cases, of the UPC, they use
that number to format it to and NDC number.

CPDP has developed a standard way to convert the UPC to an 11‑digit NDC
format that is used for billing purposes. This standard process is
recognized and used by all major drug compendia such as MediSpan and
First Data Bank.

Because of the potential impact on billing for these products, any
discontinuation of a true NDC number will have significant impact on the
manufacturers of these products along within possible disruption in
supplying these products to our patients. Consequently, any changes
should be allowed sufficient lead time to prevent interruption in
servicing our patients.

Thank you.

MR. BERNSTEIN: Any questions for the speaker?

MR. LEVIN: Yes; I have a question. You were mentioning about the support
to changes for the active ingredients. You said about the other
components that might‑‑what components would you now advocate a change?

MR. KLIMEK; There are some situations like when inactive ingredients
would change. We agree with the FDA that the NDC number should change
but there are other components of that listing that could change which
may not require the NDC to change.

MR. LEVIN: Like an example of that?

MR. KLIMEK: Whatever is listed, whatever is required for the listing of
the NDC number. I am trying to think off the top of my head.

DR. GARDNER: The inactive ingredients.

MR. KLIMEK: Right.

MR. LEVIN: And then for the dietary supplements, it would have an impact
if the NDCs were‑‑

MR. KLIMEK: If there is no UPC‑‑well, in most cases, where those prices
are either to HRI or UPC numbers which pharmacies today will format that
to an NDC number to bill. So we really have no issue with that as long
as there is a product identifier that we can bill using that code.

DR. GARDNER: Would you talk a little more about the 10‑digit‑‑you
mentioned the 11‑digit standard for NCPDP, but then you also talked
about the need for the 10‑digit version.

MR. KLIMEK: Again, which we had mentioned earlier, Dr. Gardner, was
about the 10‑digit number being out there. We basically take that
10‑digit and format it to 11 digits.

DR. GARDNER: So if we started with an 11‑digit number, you don\'t think
that would cause a lot of disruption?

MR. KLIMEK: Our system handles 11 digits for the NDC number. I don\'t
really see where that would cause us an issue.

DR. GARDNER: You mentioned drug interaction or other databases that do
use 10‑digit, but they convert to 11?

MR. KLIMEK: Right. All systems convert to 11.

DR. GARDNER: They all convert to 11?

MR. KLIMEK: Right.

DR. GARDNER: Okay. If we could convert to 11, I think we would like to
because I think that would simplify everything for everyone. But we need
to know whether it will cause problems.

MR. KLIMEK: Right. It is our thought that if it goes anything beyond 11
digits that certainly would cause more issues as far as our database
holding that large a field and, also, then, relating back the original
processing.

DR. GARDNER: Thank you.

MR. BERNSTEIN: Next up is John Roberts.

MR. ROBERTS: Good morning, everyone. I am the third John in a row you
may have noticed. I am going to wake you up now. I am the barcode
person. UPC is owned by GS1. It is our standard. Going from a 10‑digit
to an 11‑digit NDC will cause us great problems, great problems, indeed.
I will get into that.

Our formal comments will be coming before January 26th. I am a staffer
with GS1 US, a director of healthcare. Normally our healthcare user
group will put together the comments and reply to the FDA from a global
perspective.

I am glad that John gave the historical perspective of where the NDC
came from. The UPC came at the same time, roughly in the early \'70s.
The world has really changed since then, the National Drug Code and UPC.
Those of you‑‑I don\'t see a whole lot of grey hair, but there was a
time when we didn\'t have barcodes on products at all. That started in
the early \'70s. Now, 30 years later, 40 years later, there is barcode
on everything.

These things went on products in the early \'60s and \'70s. They were
embedded into our symbols at that time, embedded into our entire system
and it carried forward. The U.S. is the only country where we allow a
specific drug number to be coded into our system.

Today, we are heavily integrated with global manufacturers and
distribution. We are looking for non‑standard applications, especially
in healthcare, that really threaten the flow of products information and
raise potential error. If the FDA wants to go to the 11‑digit NDC, that
is completely up to you, within your regulation.

However, we think you should decouple it from putting in the barcode.
What do I mean by that? There is no reason an NDC should be in a
barcode. You could use a G‑10 global‑traded item number, instead, that
is used everywhere that could be passed back and forth.

If the FDA changes the NDC from 10 to 11, it will cause serious
disruptions to our entire system. We suggest, instead, that you delink
it and use as a primary identification a global‑traded item number. Most
of us, because of the holiday season, went to the store over the
weekend. Lots of UPCs were scanned. How many of you know what numbers
were on them? None of you. I don\'t even look at the ones on there, but
you know what product you bought because it showed up on the computer.

The G‑10 points to the computer record that pops ups what the item is.
There is on reason for an NDC to be in there. A G‑10 works quite well.

You can remove the NDC requirement in the barcode, use a G‑10. The
companies that are drug companies already have G‑10s on other products.
If you don\'t like this solution, you might the NDC in secondary
information. We have primary information which is the G‑10, the product,
the data structure that is in the barcode, secondary information like
lot expiration date could be an NDC in there. It could be an application
identifier. We already have national stock numbers as a separate AI.

We also suggest that, if you do this, that you grandfather the NDCs that
are already there and UPCs because they are already there. Why change
them? Why have someone relabel an NDC. But, going forward with your
regulation, we suggest you just go to a G‑10.

Also, as we always say, you should engage the GS1 global‑user groups. I
am a staffer from G1. I can tell you what the standard is. I can tell
you how it works today. I don\'t make it up. The users get together and
decide how the standard works.

There are several groups right now. One is the healthcare users group.
It is a global user group because we are having these issues in other
companies globally in healthcare because the healthcare issues have been
raised again and again.

If you go to G‑10, I think it will continue to allow your FDA goal for
unique identification of all products to meet it. We have very strict
rules. We are a rule‑based organization. Each packaging size has to have
a different G‑10, just like a different NDC. We have worldwide
compliance with our GS1 standards. Also, we think if you go with the
G‑10, rather than marking an NDC in the product, you stop other national
ministries of health looking for their own national requirement.

Within the last year, we have had three governments come in looking for
their own NDC, if you will, on their own products within their own
country. This causes problems for the manufacturers because they have to
ship an NDC into the U.S. But, for Italy, they have to ship something
else, for Germany something else. There are examples. That is not
happening right now.

One example is the Italian example. If you are a manufacturer, you ship
any drugs into Italy, you must use a serial number. You have to get a
serial number and barcode from the Italian Ministry of Printing from
Italy. If every country did like this, this would really disrupt the
smooth flow of healthcare products throughout.

It also could create possible errors. How could it? If you have two
barcodes. If you had a commercial barcode on the product, a UPC so it
could be scanned and moved forward and you had another barcode with the
NDC. We have seen this in other countries. The nurse is confused, which
one do I scan. It causes problems in the database. Also, what do you
load in the database? Do you load the G‑10 or the NDC?

I went very quickly. That is our overview. For GS1 US, we are a
standards organization, global. We are in 155 countries. There is
roughly a million members, 280,000 within the United States. 18,000 say
that they are in healthcare. A lot of our marketing material says we
scan 5 million times a day.

If you do the math on that, that is roughly 200,000 scans of a barcode
an hour, 3,000 a second. A lot of information being processed very
quickly throughout the entire system. We are a voluntary in the United
States, not‑for‑profit, not government but member driven. Understand
what drives the entire system is members look at it and decide what is
the best as we move forward.

It has been said in some of the earlier presenters that the barcode is
only one part of the picture. The barcode is scanned. It goes into a
database. That is something that the FDA must remember when they go
forward with this. The barcode goes into database. It is a pointer to
the database. The barcode has no information to it. The NDC is the only
variation within our system where it actually has logic written into it
for the NDC.

Most of barcodes are dumb numbers. Everyone likes dumb numbers because
they just point to the database. We encourage the FDA to adopt this.

Why would a move from 10‑digits to 11‑digits concern us? Our system is
very structured. A UPC is 12 digits. It has been 12 digits since the
1970s. All the databases are built on this. The scanners are built on
this. In the 155 countries where we are giving numbers out to companies,
everything is built on this so we don\'t have a collision.

In summary, real quick‑‑I haven\'t used my entire time but I did use ten
minutes‑‑we suggest that you decouple the NDC number from the barcode.
If you want the item barcoded in there, you could use secondary
information or require a G‑10 in there. We think that dumb numbers are
the best.

Adopt at GS1 commercial global standard. That way products can be
shipped throughout the world without these variations in country rules.
We think this will avoid potential errors, avoid the charges of a
U.S.‑centric system and will be able to influence the global standards
as we move forward.

Again, GS1 US appreciates the opportunity to speak at this forum. Thank
you.

MR. BERNSTEIN: Thank you. Any questions from the panel by way of follow
up?

MR. LEVIN: I have a question. Who assigns the G‑10 number?

MR. ROBERTS: The question is who assigns the G‑10 global‑trade item
number. A company comes in, pays a fee and they are assigned a labeler
code. Similar to your NDC labeler code, we assign a company prefix code,
variable length.

MR. LEVIN: So it is assigned similar to what the NDC has done now.

MR. ROBERTS: Correct.

MR. LEVIN: Can the NDC be used in the G‑10?

MR. ROBERTS: Yes; it can, in its current configuration.

DR. GARDNER: Can you explain that a little bit as to how that‑‑the UPC
is 12 digit. The first digit is product category and the last digit is a
check‑code. So you have 10 digits in between that we use the current NDC
number; is that correct?

MR. ROBERTS: That is correct. I haven\'t been in GS1 from the start, but
in the 70\'s, according to the books, the FDA and UCC, at the
time‑‑actually Uniform Grocery at the time‑‑got together and determined
how to put this together. The UPC\'s 12 digits for NDCs and the NHRIC\'s
number, when you came in with a labeler code, we put a 3 in front of it
so when you pick up an aspirin or something like that, the 3‑‑in our
system, the next 10 digits is either an NDC or an NHRIC number.

We don\'t look at how it is configured. We just give the labeler code.
We also go back and check with the FDA to make sure that that company
does have that code. We want that piece of paper from you assigning them
or, from the NHRIC, we want a piece of paper because a lot of companies
come in, they like that NDC for all the reasons that you folks talked
about for payment. It is keyed on something that wasn\'t part of our
standard originally.

DR. GARDNER: If we had to standardize on 10 digits‑‑maybe others could
comment on if we had to standardize on 10 digits‑‑would it simplify
things if we went to a common standard of 5,4,1, for example? Does it
matter for your‑‑

MR. ROBERTS: It doesn\'t matter.

DR. GARDNER: For other people, it might matter a lot. The conversion
from 10 digits to 11 digits is somewhat complicated because of all the
different standards and confusion. So all the billing systems, not the
UPC billing systems but the drug and Medicare‑Medicaid reimbursement
billing systems, are, I guess, filled by the NCPDP standards convert to
11 digits.

If we set up a standard way to convert from 10 to 11, would that‑‑like I
said, 5,4,1‑‑would that solve your problem?

MR. ROBERTS: I think the question is if you had a standard conversion.
As long as you retain 10 digits, and digits not alphas, then we
wouldn\'t have any problem with a barcode system globally. When you go
to 11 digits, when we have huge difficulties.

How do we assign numbers? How does it fit into a 12 digit? You just
can\'t do it.

DR. GARDNER: I guess that is the other issue. Is it necessary to have
the NDC in the UPC or is there another way to do that?

MR. ROBERTS: As I said, before the Barcode Rule of 2004, a lot of the
over‑the‑counter drugs just had a UPC in it using the company prefix
that they were assigned in the UPC. With the 2004 barcode, they switched
and put their NDC in there.

Has there been any change to the marking system? No; the barcode is
still scanned. The G‑10, that is what we call that number in there in
the UPC, is scanned, points to a database and moves on. We don\'t see
any difference why does the NDC have to be. We applauded the idea at
time. We thought it was a good idea just to move healthcare forward
because we have been trying to get everything marked for years.

But now, as we are moving forward, we are seeing other global issues
with it.

DR. GARDNER: Can you talk a little bit more about the impact of having
two barcodes, then, one for the NDC and another as a UPC?

MR. ROBERTS: The impact would be‑‑and then you really need nurses and
pharmacists in here. This is all anecdotal evidence that I have heard, a
lot from the V.A. They send us all their packages where some of our
manufacturers go against the standard or they can\'t read the barcode.
There are a lot of instances where they have had two barcodes on the
package. The nurse is confused. Which one does he or she scan?

If they both look like UPCs, they scan them twice or they scan the wrong
one first. A lot of times, there are label numbers or they scan the
lot‑expiration date before the primary information G‑10. It fouls up the
system and creates errors.

Also, say, for instance, there was a commercial G‑10 in there in the UPC
and the NDC. If the nurse scanned the commercial G‑10 and it wasn\'t in
the database, you would get a \"not find.\" If you scanned the NDC and
that wasn\'t in there, then you would get a \"not find.\" So they have
to scan both. So it could be that they scanned both and then you had a
double reduction from the inventories which has occurred in the past. It
creates duplication and error.

I see I have lost most of you. Sorry about that.

MR. LEVIN: Another question. The G‑10 is specific to the package?

MR. ROBERTS: Yes; the global‑trade item number changes as the package
size changes. If you will, the UPC on that bottle is different from this
bottle. It should be different than a package of six or a case of 12.
For inventory purposes, you have to know what you are buying.

MR. LEVIN: Some people use sort of 9 digits to look at just the product
and disengage the packaging. Do have anything equivalent for that?

MR. ROBERTS: No; I don\'t.

MR. BERNSTEIN: Thank you. Next up is Diane Servello from Watson Labs.

MS. SERVELLO: Good morning. I am Diane Servello with Watson
Laboratories. I am the Director of Generic Regulatory Affairs. My
department is responsible, among other things, for drug listing,
assignment of NDC numbers for the company as well as preparing SPL
labeling.

I want to thank the agency for giving me the opportunity to present
Watson\'s concerns with the proposed regulations. In the August press
release, the agency stated that having drug makers submit drug
information electronically will help keep an accurate, up‑to‑date
inventory of drugs on the market and will maintain more accurate
information to make it easier to respond to drug emergencies such as
recalls and drug shortages.

Watson fully supports the submission of drug‑listing information
electronically. We agree that submitting drug‑listing information
electronically is an improvement over the current paper system and will
help to improve the accuracy of drug‑listing information.

However, we disagree with the proposal that FDA assign NDC numbers.
There are a multitude of reasons why firms should be permitted to
continue to assign their own NDC numbers. I will provide five examples
today.

Number one. Watson is a drug manufacturer as well as a private‑label
distributor. We manufacture many of our own products but also use
contract manufacturers to produce some products sold under the Watson
label. Watson owns the NDA or ANDA for some of these
contract‑manufactured products. In this role, we are responsible for
many of the activities that the proposed rule does not contemplate such
as determining the trade dress for the product in the R&D stage.

At the R&D, table or capsule imprint markings are assigned, which are
based on the product‑code portion of the NDC number. At this early stage
in the product development, the determination of the ultimate
manufacturing site for the commercial product may not yet be made. Yet,
we still need the product‑code number to finalize the trade dress. For
this reason, the proposal that NDC numbers be assigned to manufacturers
instead of private‑label distributors is problematic.

Number two; because NDC numbers need to be assigned very early in the
R&D process, Watson has already assigned numerous NDC numbers for
products in our R&D pipeline that are not yet drug listed. We have
already ordered tablet tooling utilizing these product‑code numbers. How
is FDA going to avoid reassigning these numbers to other products if
they assume responsibility for assigning numbers.

Due to the size of Watson\'s product line, we currently market products
under different labeler codes. This is done to separate our various
business units. The proposal to use only one labeler code for any new
NDC numbers assigned by the FDA would disrupt our business process.

Number four; currently, Watson does not use different package codes for
each level of packaging. To change this practice would cause a major
disruption in our business processes by causing us to reconfigure the
business software we currently use to control our manufacturing,
packaging and distribution processes.

Number five; NDC numbers are used as identifying codes for a myriad of
other activities including interactions with other governmental agencies
such as the DEA for Arcos reporting and various agencies for
Medicaid‑Medicare reimbursement.

In addition, many firms use 10‑digit NDC numbers to track their own
internal business processes and/or documentation such as manufacturing
records, analytical test methods, validation reports, et cetera. Any
changes to the current system will cause major disruption to these
processes.

As stated previously, Watson fully supports the electronic submission of
drug‑listing information. We believe this is significant improvement
over the current system and will improve the accuracy of the data
contained in the system. However, the proposal for FDA to assign NDC
numbers will cause major disruptions in our business processes.

We advocate allowing firms to continue to assign their own numbers
according the current practices. We believe the agency could devise an
electronic system that allows firms to enter their own information while
still accomplishing the goals of the proposed rule.

Thank you for the opportunity to present my concerns.

MR. BERNSTEIN: Any follow up for Diane?

MR. LEVIN: Yes. I have a few questions. How early in the process do you
assign the NDC, how much time before you go to market, would you say?

MS. SERVELLO: I would say it is sometimes three or four years before.

MR. LEVIN: So if the assignment is made three or four years before, that
would accomplish what you need. Would that accomplish what you need?

MS. SERVELLO: I think that one of our concerns, and I didn\'t mention
it, is the time factor, too, because if it is a process where we have to
apply for it and then wait 60 days for it, I don\'t think that is going
to allow us the flexibility we need and what we have under the current
system.

MR. BERNSTEIN: What time factor would be acceptable?

MS. SERVELLO: I would like at least five working days. I get 20 minutes
to do it right now.

MR. LEVIN: you said there was a problem with assigning the numbers,
duplicate numbers, or whatever. How do you avoid assigning those?

MS. SERVELLO: I assign numbers currently through an access database
where I have all the possible numbers that are available. If that spot
is blank, then I have that number available.

MR. LEVIN: When you were talking about the different business units, can
you elaborate on what those business units are for the different labeler
codes?

MS. SERVELLO: Watson currently has a branded division and a generic
division. For our generic division, we use a 4,4,2 configuration. For
our branded division, we use a 5,3,3 configuration. We also just did an
acquisition. That division is going to maintain their labeler code so
that is another division that requires another labeler code.

MR. LEVIN: So, through an acquisition, you are going to keep them as a
separate entity at least inside of your company.

MS. SERVELLO: Yes.

MR. LEVIN: You talked about the level of packaging. What level of
packaging do you assign the NDC?

MS. SERVELLO: We assign the NDC number for bottled products. But it is
the case quantities that we don\'t assign a level at this point,

MR. LEVIN: So you assign it for the bottle but not at the‑‑you have a
case of 12 bottles. not at that level.

MS. SERVELLO: Yes. Even for injectable products, we would assign it for
the carton that contains the vials but not the outer shipping case.

MR. LEVIN: Okay.

DR. GARDNER: Can I follow up on a few more of these? As we are currently
contemplating, we would have the company submit the NDC number they want
and then we would not accept that only if it didn\'t meet formatting
requirements or was duplicative of another product.

It is possible, because of the 5,4 labeler code configuration that, when
you collapse 11 digits to 10, you get a duplicate. You would never know
that within your company. But, within your company, with your labeler
code, you would have total control over your own product codes and
package codes, again, as long as they meet the requirements. The
requirements will change.

If you change the inactive ingredient, for example, or a significant
inactive ingredient, then it would get a new number, it would have to
get a new number. Would that disrupt your business processes?

MS. SERVELLO: I don\'t think so. As long as we could submit the
requirements, you would accept that number.

DR. GARDNER: There is no reason we wouldn\'t accept it I can think of
other than, as I mentioned, the formating stuff. But, anyway, that type
of interaction‑‑what I am getting at is if we continue to give the
companies control over the numbers they request, would that resolve most
of the issues you have brought up?

MS. SERVELLO: Yes.

DR. GARDNER: Okay.

MR. LEVIN: I have another question. Coming back to your business units,
how do they function as far as operation in your company? Are they
separate? Do they have separate chains of command, contact people.

MS. SERVELLO: They are all subsidiaries of Watson Pharmaceuticals, but
they do operate‑‑the branded side and the generic side operate as
different divisions of the company.

MR. BERNSTEIN: Thank you very much. I guess we seem to keeping the
trains running on time this morning. We have a break scheduled until
10:45 and then we will pick up again with additional speakers.

\[Break.\]

MR. BERNSTEIN: We will move right back into the speakers. The next
speaker is Dr. Thomas F. Willer who is with Hospira.

DR. WILLER: My name is Tom Willer. I am the Director of Regulatory
Affairs at Hospira. I would like to focus my comments on legacy, NDC
numbers and compliance.

As noted here, the National Drug Code numbers are one of the linchpins
of the healthcare system. NDC numbers are used throughout the
drug‑supply chain and users extend from pharmaceutical companies,
distribution system, medical community, insurance industry as well as
the government, itself.

Currently, NDA and ANDA holders assign NDC numbers for the product code
of their own products. This has been the case for decades and is deeply
embedded in the internal processes of sponsors specifically and the
healthcare system in general.

The NDC number is not only used for marketing purposes. It also plays a
pivotal role for sponsors and the R&D process where the number is
crucial for internally tracking compounds in a company\'s pipeline. As
noted by one of the earlier speakers, the R&D process begins years
before a product is launched. Therefore, under the current
recommendation by the agency, the NDC number would have to be applied
for and granted years before a product launch or before an ANDA or NDA
approval.

The NDC number is also used in identifying the export of scheduled drug
compounds for DEA.

Now as noted by earlier speakers, the August, 2006 proposed rule
contains the key NDC‑related points noted in this slide, namely
universal standard format, drug‑industry requests new NDC numbers. FDA
signs them. Current NDC numbers remain unchanged provided these numbers
comply with the new rule when finalized. Lastly, non‑compliant NDC
numbers would be reassigned by the agency.

NDC numbers have been used for decades. The FDA has accepted these
numbers via its drug‑listing function. The FDA has not routinely
contacted companies requesting changes to currently used NDC numbers.
Existing NDC numbers are already accepted, a critical part of the supply
chain, and being interwoven with both public and private healthcare
organizations.

The proposed rule intimates that some unknown number of NDC codes may
not be correct. This raises some questions. For example, how many NDC
numbers currently exist? How many does the FDA estimate may not meet the
21 CFR 207.35? In other words, how big is the problem, or potential
problem?

Again, we are talking about thousands of drug products and legacy NDC
numbers. Creating NDC numbers for various levels of packaging, as noted,
for the container, carton, as well as the shipper or corregate increases
the universe of NDC numbers, increases FDA cost to assign new numbers,
increases FDA cost to record and monitor new numbers and seemingly has
no additional benefit to patient safety.

So it is not clear how the shipper NDC number has any effect on the
actual patient.

Current distribution systems are already based on existing NDC numbers.
An NDC number changeover could cause drug shortages as companies
navigate expiration of products with legacy NDC numbers and introduction
of products with revised or new NDC numbers.

Tens of millions of dollars to the pharmaceutical industry would be a
cost as well as healthcare enterprises is an understatement. This is
especially distressing in light of the increased cost of healthcare and
financially strapped hospitals and medical service providers. In this
end, the burden ultimately will be born by patients.

First and foremost, industry needs to know what criteria will the FDA
use to judge legacy NDC numbers for compliance. From a legacy
standpoint, there are thousands of products which fit the compliance
criteria over the decades. For instance, the FDA approved Hospira\'s
first NDA in 1946. The FDA has not notified the company of any
compliance issues with any NDC number in the past 60 years.

Massive changes to the NDC system would require a much longer
implementation period than the proposed three years and nine‑month time
frame.

Two issues to consider, if there is a compliance issue to reassign NDC
numbers from numbers currently meeting the needs of the marketplace. For
example, many infusion devices already read barcodes or NDC numbers
would have to be recoded one by one. An infusion device is a pump at the
hospital level.

Also reprogramming and changes to databases by all parties is seemingly
not a productive use of limited funds and may disrupt reimbursement as
well. A change to the existing NDC rule would cause a heavy burden on
the pharmaceutical and medical providers. The internal processes and
systems would have to be reevaluated and changed.

All parties in the supply chain incur costs from manufacturers,
warehouses, distribution centers, medical offices, hospitals to
insurance and other reimbursement parties. A unique package‑code system
encompassing every company seems daunting since there are only two
digits available for the multitude of packaging configurations.

If current legacy NDC numbers that meet market needs are retained,
progress to the proposed new FDA allocation of NDC numbers can easily
proceed. We also strongly urge the FDA to put in place a robust security
system to protect sponsor confidentiality when requests are made for a
new NDC number. As noted earlier, this occurs early in the R&D phase of
a company and we need that number and not let anyone know that is has
been allocated.

As I have discussed, this isn\'t simply a matter of an NDC number. This
is an issue that could include barcoding and reprogramming.
Consideration of expanding currently used barcodes would not produce the
dislocation issues of requiring new changes to NDC numbers with the
current market products.

Company mergers and acquisitions; how will the agency handle these
frequent occurrences and the NDC implementation time? System learning
curves which involved initial glitches and breakdowns occur.
Reprogramming NDC numbers in all computer databases throughout the
supply chain inevitably would be slow.

Pipeline confidentiality, as I have mentioned, and delay of new product
launch and marketing, allocation of the NDC number must be confidential
and must be allocated in a timely fashion. As noted earlier, a five‑day
period or a 30‑day period would probably meet our needs.

A finite pool of numbers for an infinite amount of number
configurations, we see the number of NDC numbers as limited and not the
100,000 number or pool that the FDA projects.

In summary, we urge the agency to consider retention of all current
legacy NDC numbers in the marketplace.

MR. BERNSTEIN: Thank you. Any questions for Dr. Willer?

MR. LEVIN: Moving forward, then, for new products, following a set up
rules, do you have issues with that?

DR. WILLER: We support the idea. Our only worry is how can the FDA do
it? Right now, we have a 4,4,2 code. So the first four of the label
code, they are gone. The next four are the drug code. There are only
9,999 numbers. So Hospira already has allocated about 3500 of those
numbers. So when the agency gets ready to allocate our next NDC number,
they have to know what has already been used up, at least in those four
digits for us.

I don\'t know how you will do that. Now, maybe as the NDC numbers become
more mechanized under Dr. Gardner\'s system for drug listing, maybe that
will be easy to manipulate and to understand. If that is, then that is
good.

DR. GARDNER: So you don\'t think 100,000 unique numbers for Hospira is
enough?

DR. WILLER: I don\'t know where the number 100,000 comes from? There is
4,4,2. You only have four numbers.

DR. GARDNER: That is 10,000.

DR. WILLER: Yes. That is not enough over the long term.

DR. GARDNER: That is because you use two for a package code.

DR. WILLER: As mentioned earlier, the agency wants a number for products
going outside the United States. We assign under that packaging code a
unique country destination. So we have a specific number for Ireland or
for Germany or for ex‑U.S.

DR. GARDNER: So if you ran out of product‑code numbers, then a new
labeler code, would that solve your problem?

DR. WILLER: Correct.

MR. LEVIN: I have a question about what you just said about that you
used different codes for different countries.

DR. WILLER: Correct.

MR. LEVIN: Can you tell me more about that?

DR. WILLER: We manufacture some products for export here in the United
States. In order to keep it clearer at the manufacturing site, we want
to assign‑‑we have assigned a unique NDC number to follow that product
during the manufacturing stage so that if the product formula for Italy
was different than the one for the United States, we would make sure
that that number is associated with that product. So it is a security
issue.

DR. GARDNER: The product formulation or packaging?

DR. WILLER: The product formulation. It could be packaging but it more
likely is formulation.

DR. GARDNER: But if it is formulation, it would have to have a different
product code.

DR. WILLER: Under the proposal; yes.

DR. GARDNER: That is current.

DR. WILLER: Yes.

MR. LEVIN: But some of these products are the exact same formulation?
You are just sending them to different locations?

DR. WILLER: Correct.

MR. LEVIN: Then you assign another product code for your own internal
purposes. These are never made public, these numbers. They are never
used. Am I misunderstanding that?

DR. WILLER: I am not an expert on exporting of drugs so I don\'t know
for sure.

MR. LEVIN: Okay.

MR. BERNSTEIN: Thank you. Next up is Scott Melville from the Healthcare
Distribution Management Association. Following Mr. Melville\'s remarks,
we should have some time for some discussion if there are any audience
questions. If you don\'t want to use the microphone, you can also write
them down and send them up here.

MR. MELVILLE: Thank you and good morning. I am Scott Meville. I am
Senior Vice President of Government Affairs for the Healthcare
Distribution Management Association. I commend the FDA for holding this
important public hearing this morning. I thank you for the opportunity
to comment on behalf of HDMA and our members.

HDMA represents the nation\'s primary full‑service healthcare
distributors. Our 40 members include large national companies and small
regional family‑owned businesses. Each day, our members deliver 9
million healthcare products to more than 144,000 pharmacy sites across
the country in all 50 states and U.S. territories so there is a lot of
volume going through our members on any given night.

HDMA supports the FDA efforts to clarify the regulations on drug
establishment, registration and listing in much of the proposed rule.
However, there are two critical parts of the proposed rule that will
have an enormous and very negative impact on our members in the
pharmaceutical‑supply chain. Those two areas are the definition of
relabeling and the assignment of NDCs on new packaged drug products.

With regard to relabeling, the FDA\'s proposed definition of relabeling
in Section 207.1 is defined very broadly to meet any change or addition
to the label or labels on a drug or drug package. HDMA has grave
concerns regarding the breadth of this definition.

HDMA distributors, as I said, ship millions of prescription drug units
each night to customers across the country. To do so efficiently, it is
common practice for our members to affix stickers, barcodes, tags or
other identifiers to drug packages to track inventory location, identify
product origins and/or ensure proper returns from pharmacies.

For example, stickers may confirm or convey important handling
information for customers such as \"refrigerate upon arrival\" or direct
a delivery of drugs to a particular part of the hospital or medical
facility. Some distributors manage inventory by applying proprietary
serialized codes to drug packages that enter their facilities. These
additions allow a company to identify and trace the drugs entering and
leaving the distribution center.

Some distributors also apply codes to drug products in order to
efficiently and effectively comply with the FDA\'s barcode rule.
Requirements under the PDMA final rule and/or state drug pedigree laws;
to improve compliance with the State of Florida\'s recent pedigree law,
for example, some HDMA members add serialized barcodes to the
drug‑product container.

Currently, also, some distributors participate in radiofrequency
identification pilots to study the use of RFID tags in the
prescription‑drug supply chain on appropriate products. As RFID programs
further develop, distributors will need the flexibility to sticker or
tag products without also triggering the listing or registration
requirements of this rule.

I have an example of a very simple tag that many of our members use, but
this is an example of a type of a tag a distributer might put on the
bottom or side of the bottle when he sends it out to his customers. It
explains where the product should be returned to or reordered from.

I also have a photo here of a license plate, essentially, a code that a
distributer may affix to the bottom of a product. This is an example of
what one distributer is doing to comply with the state pedigree
requirement to be able to track a unit of that product since, as of now,
most products coming from manufacturers are not serialized. They simply
have a lot number and an NDC number. Many, many pedigree laws require
them to get down to the unit level. So there is some additional marking
that is necessary to comply with those laws.

These examples of distributer‑applied stickers and tags do not otherwise
alter the drug\'s original label, labeling, package or outer container.
They do not affect the safety, purity of potency of the drug and do not
disturb its existing packing configuration in any way.

Thus, if the definition of relabeled remains as proposed, many common
security and inventory tracking best practices conducted today by
distributors would, we believe, unintentionally trigger the relabeling
designation and requirements of this rule. If left unchanged, FDA would
have to assign tens of thousands of new NDC numbers to ensure
compliance.

Given that the agency stated in the rule\'s preamble that most drugs
would be able to retain their current NDC number, we believe FDA did not
intend these consequences. In our written comments, we will propose an
alternative definition of relabel that we believe both accomplishes
FDA\'s goals and permits continuation of common distributor stickering,
tagging and barcoding practices.

The second issue with which HDMA would like to discuss today is
repackaging. We believe this is a practice that would be significantly
affected by the proposed rule.

HDMA members perform many forms of packaging. For example, a packaging
company may simplify the last step in the manufacturing process such as
contract processing or aid in the dispensing of products to the patient
for use for unit‑dose systems such as unit‑dose packaging in hospitals.
However, today I will limit my comments to the proposed rule\'s effect
on another type of packaging known as retail‑service repackaging, a
practice that was earlier discussed by the National Association of Drug
Stores representative John Coster.

A retail‑service repackaging company purchases finished solid oral
dosage‑form drug products from the manufacturer and repackages them into
smaller quantities. The smaller packages are sold and delivered to
retail pharmacy customers bearing the manufacturer\'s applicable NDC
number for that package size.

Retail‑service repackaging safely and effectively offer package sizes
that increases inventory efficiencies, eliminates waste and provides
enormous value to our members\' retail pharmacy customers.

HDMA members who conduct retail‑service repackaging do so in a safe,
secure environment. All repackaging companies must register with the FDA
as a manufacturer and operator in strict adherence with current good
manufacturing practices. In addition, repackaging companies must be
licensed as distributors under applicable state laws.

Further, our repackaging members include their name, address and
repackage lot number on each and every repackaged drug product enabling
the product to be tracked back to the repackager and ultimately the
original manufacturer.

Above and beyond these regulatory requirements, HDMA has established
recommended guidelines for pharmaceutical distribution‑system integrity
and recommended guidelines for pharmaceutical repackaging integrity.
HDMA\'s repackaging members also voluntarily and independently follow
even more aggressive security policies including those that require that
they purchase the drug products directly from the manufacturer of the
product, itself, the original manufacturer.

The proposed rule would disrupt the safe, efficient and cost‑effective
business service by requiring a new repackager NDC on the product. Under
CMS requirements, responsibility for payment of the Medicaid rebate
follows the NDC number on the drug package. If the manufacturer\'s NDC
number appears on the package, it is responsible for the rebate payment.

If the repackager\'s NDC number appears on the package, the repackager
is responsible for the rebate. By requiring that retail repackaged drugs
bear the repackager\'s NDC number, the rule effectively shifts the
burden for Medicaid rebate payments from the manufacturer of the product
to the repackager.

To better understand the business implications of this shift, NDC
retained the Moran Company, an independent consultant firm. Their
analysis concluded that repackaging companies will not be able to absorb
the rebate cost given the industry\'s traditional slim profit margin. If
the proposed rule becomes final and repackaged drugs must bear the
repackager\'s NDC number, the consultant confirmed that distributors
will no longer be able to offer this valuable service to pharmacy
customers and will exit the retail‑service repackaging industry.

Considering the economic impact and safety and security controls already
in place, requiring a new repackager NDC number, we believe, is not
warranted nor will it provide additional levels of security. However, if
FDA is convinced that an additional identifier is needed, we believe the
alternatives that HDMA and NACDS have previously described to the FDA
are still valid and will satisfy the rule\'s intent while allowing the
repackaging industry to continue to serve it\'s pharmacy customers.

Given the significant impact of the proposed rule, we ask that the
agency reconsider those alternatives. Either one would formalize the
application of the unique repackage item code and would meet the FDA\'s
objective of further identifying the repackager and repackaged product
without requiring a new NDC.

We hope FDA will seriously consider the implications and alternatives
presented by NACDS and permit a path forward that enables our pharmacy
customers to continue to benefit from repackaged products. If, however,
FDA proceeds with implementation of the rule, NDC may ask, on behalf of
its members, that the agency allow sufficient time to orderly structure
the retail‑service repackaging operations.

For prescription drugs, FDA had proposed a three to five‑year
implementation period. HDMA members estimate the pharmaceutical supply
chain will be five years to adapt to this new rule. Repackaging
companies will need to renegotiate their contracts with both customers
and suppliers, change and phase out retail‑service repackaging
operations and terminate or reassign work force.

Our members pharmacy and hospital customers will need time to evaluate
their supply options and locate alternative sources for the product they
obtain from retail‑service repackagers. Finally, manufacturers, some of
which rely on repackaging to meet pharmacy needs, will require time to
alter their operations and possibly increase their own packaging
capacity to produce additional smaller units for distribution to retail
pharmacies.

To conclude, HDMA appreciates the opportunity to share views with the
FDA. We commend the agency for proposing a rule intended to improve the
quality and timeliness of information available to patients and
healthcare professionals but we believe the proposed definition of
relabel would undermine those stated goals by adding a more complex
numbering and relabeling process into the current distribution system.

We ask that the agency carefully examine the proposed definition of
relabel and narrow it to permit barcoding, tagging and other stickering
practices distributors use to ensure a safe and secure delivery of
products to their pharmacy and other healthcare‑provider customers.

Second, we ask the agency reconsider its proposal to require that
repackagers use their own NDC number and, instead, allow the continued
use of the manufacturer\'s NDC. If the agency chooses not to amend the
proposal as we recommend, we urge full consideration of the implications
to the entire pharmaceutical supply chain by allowing the five‑year lead
time needed for manufacturers, repackagers and the retail industry to
make alternative arrangements.

I thank you for the opportunity to provide these comments today.

MR. BERNSTEIN: Thank you. Questions?

DR. GARDNER: The repackaging issue, it sounds to me like this is
primarily a rebate issue. This repackaging item code‑‑is there a need to
have two separate codes on there, an NDC and a repackaging item code
rather than just a different NDC number?

MR. MELVILLE: Certainly, the NDC number is key to determining who pays
the rebate.

DR. GARDNER: Aside from that question, is there any reason to have two
different identifications numbers?

DR. WILLER: No; absolutely not.

DR. GARDNER: So it is really a rebate issue.

DR. WILLER: Yes.

DR. GARDNER: And that is, to me, a separate issue. That is a Center for
Medicare‑Medicaid Services issue as to how they manage their rebate
program rather than a unique product‑identifier issue.

DR. WILLER: Let me alter that answer a little bit in that, if it is
truly the intent of this rule to identify the origin of the product,
then the NDC number on the bottle with the repackager\'s current
identifier, the practice of placing the repackager\'s name on the label,
that is the addition that a repackager product adds. It is required to
add \"repackaged by\" on that label.

So you have the NDC number, the manufacturer of the product. Then you
have, in human‑readable form, the repackager\'s name. You are able to
identify who repackaged that product and that repackager is able to
identify, obviously, the source of the product, the source being the NDC
number that is on that bottle.

DR. GARDNER: But the new NDC number for the repackager would serve the
same purpose as having that RIC? number.

AUDIENCE: \[Chorus of no\'s.\]

DR. WILLER: I hear the people in the audience do not agree with that.

DR. GARDNER: I am asking.

DR. WILLER: Perhaps that could be during the question‑and‑answer
session. It would not serve the same purpose because, under the current
Medicaid rebate rules, the manufacturer‑‑

DR. GARDNER: There are two separate issues here. One is the unique
identification of the product. We go by NDC. Does that RIC serve another
purpose that would not be met by having a new NDC number is my point,
other than the rebate issue.

DR. WILLER: Oh. Sure. I think the agency is required to consider the
economic implications of every rule that it undertakes. By going and
putting the repackager\'s NDC number on, you would essentially put that
industry out of business. So, by keeping the old one on with a RIC, the
industry could continue to provide the benefit to its customers and, at
the same time, provide that additional level of identification that it
appears the FDA may desire to have.

DR. GARDNER: I am not saying that we would tend to interfere with the
rebate process. That is certainly not what we are doing. What I am
saying is there are two issues here. One is the unique identification of
a product which, in our current thinking, that should be by NDC number.
But a second is the rebate issue which is an issue with CMS, not with
us. But we certainly would get it worked out before we went forward.

DR. WILLER: We recognize that the NDC number that goes on the repackaged
product to the customer is the NDC number for that exact product that
that patient or that customer is receiving. It is the manufacturer\'s
product, so everything that is in that NDC label that describes that
product that is in that bottle.

They are repackaging the manufacturer\'s branded product and putting it
in a bottle.

DR. GARDNER: I understand that but the repackager is, by definition, a
manufacturer. They\'ve changed the product. So that manufacturer needs
to be identified in our listing system as having touched or dealt with,
manufactured that product. That wouldn\'t happen under‑‑by using a RIC,
because we don\'t use the RIC in our listing. We use the NDC. So that is
what I am trying to get clarification on.

DR. WILLER: Our members do have to file listing for an NDC number. The
Chairman of our Packaging Committee, Tim Booth, is her. Tim, do you want
to talk about your company\'s practice as far as the listing?

MR. BOOTH: My name is Tim Booth. I am the Chair of the HDMA Packaging
Committee which we have several members, three larger members being the
wholesale distribution community.

In the filing process, we do have to file with the FDA for drugs and
list drugs that we do repackage. On the label for the branded
repackaging that we are referring to is the NDC of the original
manufacturer. We do, however, list with the FDA with our own NDC number
for that repackaged drug in the listing process. Therefore, we have
complete traceability from the original drug, the original manufacturer,
to the repackaged product, very clear traceability, both through the
listing process and also in our systems that we use to track the drug
from the purchasing to the actual sales side of the business, complete
traceability.

Does that answer your question?

MR. LEVIN: Again, it seems like it is this rebates issue, which number
is on there. That is the main issue.

MR. BOOTH: That becomes a thrust of what is‑‑by changing NDC number,
that becomes the thrust of the issue for our business; correct. But,
from a traceability and product standpoint, we have complete
traceability from the original manufacturer, and we do buy from the
original manufacturer directly, to the actual repackaging process to the
sale of the drug through to the retail pharmacy, complete traceability
in both batch records of production, purchasing activity and the listing
process.

MR. LEVIN: The repackager item code, can you give me more about that? I
am sorry, but I don\'t know‑‑

MR. BOOTH: The repackager item code that we are referring to is a unique
identifying number that we will assign to that specific product. It is
an internal number that we generate in our business practice that we can
identify that unique number. So it is unique to every single item with,
in this case, the McKesson distribution‑supply chain.

MR. LEVIN: It is unique in your own system.

MR. BOOTH: It is unique to our system; correct.

DR. GARDNER: So there would be a one‑to‑one match between the RIC and
the repacker\'s NDC.

MR. BOOTH: Yes. Absolutely. There is a unique connection between the
internal economos number, as we call it, the identifying number, the
repacker\'s NDC that we file and also the manufacturer\'s NDC number
that is placed on the label, a very acute connection there.

MR. LEVIN: So when you go through the listing process, you can identify
the NDC of the manufacturer that this is in your repackaging.

MR. BOOTH: On the listing process, we put on the actual filing the NDC
that we are filing for our product. We also refer to the original
manufacturer on this listing process and the labeler code of that
original manufacturer. So there is, again, a unique connection between
our systems.

We also use those systems to actually create the pedigree for a product
that we are shipping out to Florida and to other states that require a
pedigree.

Any other questions on that? Did we answer the question sufficiently for
you?

DR. GARDNER: Yes. Thank you. Is this the last presentation of the
morning? Let\'s just move to the open discussion.

DR. WILLER: Thank you very much.

**Open Discussion**

MR. BERNSTEIN: Did anybody have any questions or comments from the
audience?

MS. BENYO: My name is Laurel Benyo from Ben Venue Laboratories. We are
both a generic drug‑product manufacturer as well as a contract
manufacturer for branded drug products. I have three comments that
developed as I have been listening to the other speakers. Thank you for
this opportunity.

Number one, with regards to timing, you have been told over and over
again, we are the same. Our R&D uses NDC number. We assign numbers
approximately four years prior to the time that they actually reach the
market, ideally, if everything goes well.

But there is also another timing issue that we have. We do private
label. We have received contracts from GPOs where we are expected to
launch in, like, a week. I assigned an NDC number in 20 minutes, as
somebody else spoke. So we would need very, very quick turnaround on NDC
numbers, the approval, because we are expected to do product launches in
a very timely manner when we do get contracts like this or private
labels.

We do turn them around very quickly. 30 days would not satisfy some of
our private‑label distributors that we try to launch immediately.

The next comment is regarding 10 digits. We are a small buy‑in
parenteral. The majority, about 70 percent of my drug‑product labels are
2 cc vial labels. I have a great deal of difficulty currently with the
RRS barcoding that will be used. We try to always use the 7 ml barcode.
We have gone down the a 5. This does cause difficulty. We want to make
sure that our barcodes are always legible and easily scanned by the end
user.

Adding additional digits would be very difficult. Our unit cartons do
use the UPC. I thank John Roberts for pointing out that it is a 12‑digit
number and that it would cause a great deal of concern if it was to go
to 11 digits. We would no longer be able to use the UPC on our cartons.

Our final thing; we have a 5‑digit labeler code so we have 5,3,2
configuration. Our generic drug business has only been around for 14
years. We have always used one‑third of the available digits in that
middle three. We have used over 300 numbers. If you look at that, in 14
years, we do have a finite number available to us.

I know the gentleman was talking about having 9,999. But we only have
999 in that middle digit. We have already used a third in 14 years. So
we do see a finite possibility in how we manage our NDC numbers. So I
respectfully request that we continue to allow industry and ourselves to
assign these numbers based on the need for timeliness, the need for
control. It is a great deal of numbers. You look at all of industry and
it would use a great deal of the FDA\'s resources.

So thank you for this opportunity.

MR. BERNSTEIN: Thank you.

DR. GARDNER: Again, if you ran out of product‑code numbers and we were
able to issue you a new labeler code, would that solve your problem?

MS. BENYO: It would from that point forward. But then you have to relate
them together. So we would have part of our product line using our
5,5,3,9,0 labeler code. Then you are going to switch in the middle of
our history to a new labeler code. Whereas, if we are able to continue
to control them, then we can use‑‑and we do assign new NDC number to
different formulations as they come through.

I admire your use and restrictions that was put up by you at the
beginning. Those are things that we comply to now. If the proposed rule
continued to make industry comply with those use and regulations, we do
now and we would continue to do so. But, yes; if you assign a new
labeler code, well, then, we would open up with another 999 digits in
the middle. But you would be disrupting the history in the middle of our
list of numbers.

MR. LEVIN: I have a question. When have you estimated that you would run
out of numbers? How many years?

MS. BENYO: Currently, we file 12 ANDA applications every year with the
agency. We have, on occasion, had 21 drug launches. We average
approximately 10 drug launches a year. So, like I said, in 14 years, we
are growing very, very quickly. We started with one or two drug launches
a year and now we are going up to 10.

In addition to that, we do private label. We use our labeler code and
assign brand‑new middle numbers for all of our private labels from GPOs.
We have one drug product that we have four private labels in addition to
ours with three dosages. So, right there, you have 15 numbers on just
one drug product. So, given our past successes and a good hope for the
future, and we are already a third of the way in 14 years, then you can
just figure out that, hopefully, if this continues, we are talking 25
years.

MR. LEVIN: So 25 years from now.

MS. BENYO: Yes.

MR. BERNSTEIN: Thank you. Did you have a comment? Go ahead.

MR. WRIGHT: Thank you. Good morning. My name is George Wright. I am Vice
President and one of the principals of Product Identification and
Processing Systems. My company has a 25‑year history of involvement in
the barcoding standards, development and implementation arena
particularly in healthcare.

For the last 15 years, I have served on the Health Industry Business
Communications Council\'s Automatic Identification Technical Committee.
I am a certified solution provider for the GS1 system and, most
recently, served as editor of HDMA\'s new Barcode Implementation
Guideline.

I would like to address a couple of comments on the NDC, its length and
the capacity of the system. John Roberts did us a great service in
emphasizing that nothing beyond 10 digits in an NDC can be accommodated
within the present GS1 system. It is not a question of you would like to
go to 11. You may statutorily, of course, but it would completely
undermine the use of the UPC and the barcode rule as promulgated by FDA.

So, from that perspective, and there is a great deal of detail behind
that‑‑I don\'t think everybody wants to have their eyes glazed over here
for it. My public comments in writing will cover this, but you cannot go
to 11 without completely disrupting the barcode rule as implemented and
the UPC system as used today at every level of packaging in the United
States.

With respect to the capacity of the NDC system, on Page 85 and elsewhere
in your docket document, you talk about a capacity of 100,000 labeler
codes. On one page, in particular, on Page 85, you refer to the possible
confusion that would emanate from a labeler code of 1,2,3,4,5 followed
by a 3,2 configuration with labeler code 1,2,3,4 followed by a 4,2
configuration.

The age may have overlooked the fact the 30 years ago, you specifically
reserved code numbers 1000 through 9999 never to be used. They cannot be
used or you would have exactly this problem you alluded to. If you go to
the firms.text listing as published currently, you will find that
4‑digit labeler codes cease at 0999 and only begin again at 10,000.

There are two exceptions in the current listing. I believe them to be
erroneously assigned codes, but 30 years ago, the way duplicates were
avoided was to set aside those 9,000 numbers from 1000 to 9999 never to
assign them.

So there is, in my opinion, no prospect that there can be duplicates
within the current NDC system that you have 91,000 labeler codes
available for assignment and that that will meet the foreseeable needs
of this industry for as long as we are constrained by UPC.

Thank you.

MR. BERNSTEIN: Thank you. Questions?

MS. HORN: Hi. I\'m Heidi Horn. I work in regulatory affairs for the
Perrigo Company. I first want to thank you for the opportunity to come
today and share ideas and open up a dialogue.

I have a question as it relates to the filing of labeling
information‑‑electronic labeling filing as part of the drug‑listing
process as it relates to monograph products. For ANDA and NDA products,
SPL labeling is part of the submission process. But for monograph
products, SPL labeling is not a requirement today.

So my question is will other electronic forms of the labeling be
accepted as part of the drug listing requirement? Maybe now is not the
time to answer it.

DR. GARDNER: I think that would be answered in the final rule, but that
is an issue we need to determine for the XML SPL format that is required
for prescription application drugs. But then we defined, in the proposed
rule, the content of labeling for over‑the‑counter drugs as the
drug‑facts label. We would develop a mechanism to do that.

MR. LEVIN: It might help if you put your question in the form of a
comment, turn it around. What are the issues that you have.

MR. HORN: The issue would be that, for monograph products, electronic
form of labeling does exist. But it doesn\'t exist in SPL format.
Therefore, manufacturers of monograph products, in particular Perrigo,
as store‑brand manufacturer, we would have to create SPL labeling for
all of our products. Annually, we develop 13,000 different labeling
components. That is a lot of extra work.

MR. LEVIN: You said the labeling exists now. Can you give us details.

MR. HORN: In electronic format? Yes. Today, the labeling exists in
Pediafile format.

MR. LEVIN: That labeling is also, I guess, in a word‑processing format,
too?

MR. HORN: Yes.

MR. BERNSTEIN: I believe the preamble in the proposed rule contemplates,
at this point, use of sufficient PDF information other than the specific
exceptions that are named.

MR. LEVIN: Just in the comments; is that right?

MR. BERNSTEIN: That\'s right. But I think those things are subject to
review as the process moves forward. I don\'t know that anything has
been set in stone on that yet but I would point that out. That is where
the proposal stands right now.

DR. GARDNER: The rule does state that we will submit a guidance that
would specify the format. What that is has not been determined.

MR. HORN: I have another question that I will try to make a statement
this time around and that is as it relates to the labeling of monograph
products. I believe that it would your intention to post that labeling
also to be available to pharmacies and physicians.

I guess my quandary or my concern would be that, with the monograph
products‑‑labeling changes with the monograph products are primarily
driven by changes in the monograph. If an additional warning was needed
on a monograph product, we would not necessarily have to request a new
NDC number and then subsequently file the revised labeling with FDA to
then be posted on the site and have you taken that into consideration.

DR. GARDNER: The current mechanism for posting labeling is the XML
format. So, if it came in in XML format, we already have the capability
to do that, to post those. If it didn\'t, then we would have to develop
a new capability and that would be a different process.

MR. HORN: Okay. So it goes back to software.

DR. GARDNER: You can see the direction we are thinking. Whether we get
there or not is not yet decided.

MR. HORN: Thank you very much.

MR. BERNSTEIN: Thank you, Ms. Horn.

MR. LAY: Good morning. My name is John Lay. I am the Director or
Regulatory for Apotex. Currently, we have 68 applications pending with
the agency. We currently follow about 45 annually.

My question is, with that many applications, we use multiple
manufacturing sites. Therefore, up to three sites, actually, will
produce the same drug and this is approved in the applications. What
your rule is asking me, or directs me to do, is to produce the same
product, same formulations, at three sites and essentially have three
NDC numbers out on the market with my name on the product.

I think that is going to‑‑and after talking to the wholesalers, the
cardinals of the world, that is going to cause confusion from their
system because it is going to overburden their system by having to track
three NDC numbers instead of just one.

That is one of the major concerns that Apotex has over this.

MR. LEVIN: Can I just have a clarification. You said your company has
three different sites and you would different NDC for each site?

MR. LAY: Well, currently we would produce it under on NDC number at
three different sites. Therefore, the cardinals McKessons would track it
accordingly. By the rule, the way it is proposed, they would then have
to track three different numbers and actually have to order the product
depending on what number.

DR. GARDNER: That is not my understanding of what we proposed. If it is
all within the same company, the site has to be listed but it would not
have a separate NDC number. It is only if you are buying from different
companies that you would then have to have a different number‑‑

MR. LAY: That is correct. If you use a contract‑‑and that is my point
here‑‑if you use a contract manufacturer to produce your product, it
will have another labeler code. It will not have your labeler code on
it. That is the point here is that the contract manufacturers product,
what they produce on your behalf, according to your ANDA that is
approved, or NDA, it will come on the market with multiple NDC numbers
for the same product.

DR. GARDNER: That is an issue we have to think about how to address
because the contract manufacturers, as a whole, are a grey zone. If it
is clearly a different manufacturer you are purchasing from, then I
think it is clear. But if it is within the same company, it is also
clear. It is when you have a contract manufacturer that it is not so
clear.

MR. LAY: But what if the second or third manufacturer is located in a
different country; i.e., in India, as an example. That is going to be
the same situation as a contract manufacturer.

My next question is‑‑it is a point and then a question‑‑

DR. GARDNER: Back on that, I think that our public‑health perspective on
this is that we need to know‑‑if we want to trace a drug back to where
it was really made, if there is a problem and it has to be recalled, or
whatever, we need to be able to identify which product goes back to
which manufacturer and that is the thinking behind uniquely identifying
those products through the NDC code.

MR. LAY: I would agree with that except I do my recalls based upon my
lot numbers, not based upon an NDC number. It is always lot‑number
driven. Really from a CMC\'s perspective, it is always lot‑number
driven, not NDC driven.

Now, another concern is, and I know there are numerous companies in here
that do the same thing as Apotex is I actually manufacture my product
according to an NDC number. That is essentially my item number. So my
NDC number does, in fact, go to a specified market for a specific bottle
size, whatever the case may be.

My concern is I am going to change 2700 batch records to meet the
requirement so where my batch records, again, match my NDC numbers, that
could drastically change. And the economic impact of that change is
enormous. It really is.

MR. LEVIN: So you have multiple contract manufacturers. Your issue is
with new NDCs for each one of those.

MR. LAY: The labeler code; yes. And not even multiple contract
manufacturers but multiple sites and geographical locations throughout
the world that are, in fact, are approved to ship into the U.S.

The next point I would like to ask, based upon the pedigree rule that is
now on a stay in the Eastern Port of New York, has there been any
conversation between the FDA and the states to try to alleviate the
conflicts of interest between the states or the conflicts between the
FDA and the states because the states do have, and the state
formularies, do have registration requirements that, if the states are
not involved in, we are going to go back into the pedigree requirements
right now that the FDA essentially told the states, under the PDMA rule,
that, here is the basic requirement. You can add whatever you want to
it.

So now I am dealing with 50 different egos of states, if you will, and
50 different requirements that could essentially be the same if the
states are not being advised by the FDA on what your requirements are.
And that is a concern again. I have a pedigree staff that just monitors
the state requirements and the differences.

MR. BERNSTEIN: It is getting a little bit off the subject, but thank
you. We will take it into consideration. Anybody else have any comments
or questions that they want to raise? Please.

MS. ROBINSON: Hello. My name is Donna Robinson. I am a regulatory
professional at Ranbaxy. I just wanted to touch on the topic of contract
manufacture. I wanted the agency to put to note that a generic
pharmaceutical company is required to file a supplement, a
prior‑approval supplement if it is a contract manufacturer. Therefore,
the system is in place to look at is this formulation the same. Is the
equipment the same.

Therefore, the need to change the NDC code may not be needed because you
still have that same type of controls. I believe the agency is trying to
do what it tries to force the pharmaceutical companies to do and that is
to continue to look at our systems and to continue to implement better
systems.

If it is to implement better systems, I think, in changing the NDC code
for this contract manufacturer, this contract manufacturer adds
different things for us more to look at and increases the chance of
error.

If it is a prior‑approval supplement and you have shown that it is the
same formulation, it is the same product and it is manufactured in
India, Switzerland and it is the same formulation. I ask the agency to
consider that it be the same NDC code.

In terms of recalls, you can still track it by the lot number, which
identifies that lot number being manufactured on such‑and‑such a date at
such‑and‑such at time and by what place it was manufactured. Therefore,
it can be recalled.

If it is a recall on a formulation, that whole product will be recalled.
Therefore, it decreases‑‑may decrease‑‑the need to recall, in terms of
having different NDC number codes.

DR. GARDNER: So are you suggesting that we carry lot‑number information
in listing?

MS. ROBINSON: That is not the suggestion, to carry it. But if the
agency\'s concern is do you have control. If you have a recall, can the
FDA know what lot or where that product was made. You still can because,
by that lot number, A,B,C,X,Y,Z, I can tell you, and I am sure every
pharmaceutical company here or every company can tell you where it was
made, who manufactured it, who packaged it, who handled it, who analyzed
it. Therefore, you still have the same controls.

MR. BERNSTEIN: Thank you very much.

MS. McGAHAN: Good morning. I am Chris McGahan from Abraxis
Pharmaceutical Products, Division of Abraxis Bioscience. I have a
comment on regards to separate NDC number for each level of packaging.

The proposed ruling says that there will be a NDC number for the
individual unit, the package and the shipper. Being a somewhat small
company, we currently have one NDC number that encompasses this. If we
were to have to go through and do a separate NDC number for each level,
the number of man hours to change all of that labeling would be enormous
for us.

We sell a package. We may sell a 2 ml vial packaged in 25 packaged in 50
in a shipper. We will give it a package code of 2 because that is its
end unit. For us, this is just an easier way‑‑we can keep track of it
all the way through to our batch records and all of that. But, to ask
for us to have three levels of NDC numbers for one product is a massive
undertaking.

MR. LEVIN: So when you sign that level with No. 2, which was that‑‑

MS. McGAHAN: That would be the package code. That was be for its a 2 ml
vial. It would be a package 2 ml.

MR. LEVIN: If you have a number of them in one package, in one box?

MS. McGAHAN: It is just packaged as 25. It is then stated in the PIs and
the SPL as its package size of being 25.

MR. LEVIN: That is what, then, you assign a number to that? The vial or
the whole package?

MS. McGAHAN: To the vial only.

MR. LEVIN: Then, if you are packaging different iterations‑‑

MS. McGAHAN: Then that number will change. If our main package is‑‑we
pretty much package everything in 25s. If it changes, say, to a 10 and
we have a 10 and a 25, the 25 will help the package code of 02 being the
vial unit. The 10 pack will have a 10 because it is now a 10‑pack.

MR. LEVIN: Okay. So a package of 25 2 ml vials and the package of 10
will have two different‑‑

MS. McGAHAN: Yes.

MR. LEVIN: Then the trouble with adding a NDC at each‑‑at the package
and the vial, it is putting it on the package of the product, itself, or
just coming up with the number?

MS. McGAHAN: It is not coming up with the number. It would be a matter
of labeling for each component because currently, if our label, vial
label, is sufficiently‑‑holds all of the information, it will also be
used as the tray label. It will be placed on the front of the tray. Then
there is a separate diagraphed barcode label that really has just the
lot and XP and a barcode that goes on top of the tray.

If this were to be implemented, we would have to create a separate tray
label for each of those trays and then another one for the shipper.

MR. LEVIN: So it is the labeling on each one of those components, not so
much the number, itself.

MS. McGAHAN: No; not the number.

MR. LEVIN: The barcode right now, or the numbers on that outside
package.

MS. McGAHAN: Yes.

DR. GARDNER: You talked about three levels. So there is the unit vial,
which has its own NDC. Then you have boxes of 10 or 25 which would each
have their own NDC number.

MS. McGAHAN: Currently, no.

DR. GARDNER: But then you said three levels. Then a box, a carton full
of boxes, of 25?

MS. McGAHAN: Yes; the shipper.

DR. GARDNER: I am not sure we envisioned that third level. I think we
definitely did envision the second level.

MS. McGAHAN: That was just my interpretation of what I read, that it was
the individual, the carton and the shipper level.

DR. GARDNER: You need to help us, in your comments, clarify those issues
so we can decide exactly how to do that.

MS. McGAHAN: Okay. Thank you.

MR. BERNSTEIN: Thank you.

MR. NEWMAN: My name is Rick Newman with RnD Services. I want to bring up
a topic I haven\'t heard talked about yet, at least publicly. Some of
the companies I work with are pharmacy compounders who are not required,
of course, to list as pharmacy compounders. But what we have found
recently in doing some work in conjunction with FDA, we have put unique
NDC numbers‑‑we have voluntarily gotten an establishment listing
regulation, so we have gotten our NDC numbers.

They are very unique for that compounded product because they can claim
the diluent and sometimes maybe multiple actives, whatever it might be.
We put the NDC, barcoded it, and given it to the hospitals. It has
become very useful in the hospital setting from a point‑of‑care
perspective because then, when they scan the patients wrist I.D., and
scan our drug, they can see that they are getting the right product, the
right compounded pharmacy product into the right patient.

Now, because it contains multiple products and the rest of it, the way
it is set up, according to the rule, there are a lot of issues. You can
see around being multiple products and the rest of it. Now, we are just
trying to figure out how we would comply or could we continue, if we did
as John Gardner suggested, to suggest NDC number with our establishment
listing. But we, of course, wouldn\'t have all the various labeling
pieces that you would get with a branded product and the rest of it.

That is the issue we are trying to face and I was wondering if you guys
had thought about that one yet.

MR. LEVIN: Do you currently list those compounded products?

MR. NEWMAN: No; we do not list the compounded products. We have actually
gotten direction from FDA because we have hundreds of them. We don\'t
list them.

MR. LEVIN: So you just put an NDC number on there but don\'t list those
products.

MR. NEWMAN: And they are not listed; yes.

MR. LEVIN: You would be interested in listing them?

MR. NEWMAN: Quite honestly, we would just as soon continue not to list
them. That would make it easier for us and I would think easier for you
because, basically, when a physician calls up and needs a new compound
for that patient, we are talking about moving fairly quickly. The time
constraint for that is an issue for us.

MR. LEVIN: I may have put it a different way. You would want to continue
using the NDC.

MR. NEWMAN: Correct. We would not want, for example, for an inspector to
come in and see our NDC numbers and say, oh, they are not listed and you
are misbranded in some way. That is the concern from the compliance
point of view.

DR. GARDNER: These are pharmacy‑compounded products that are
patient‑specific so they all have the patient\'s name of them.

MR. NEWMAN: Some do. Some don\'t. Some are anticipatory compounding. You
can get to a whole‑‑we can have a whole day on that one. But that is
not‑‑

DR. GARDNER: We don\'t want to get into that issue.

MR. NEWMAN: We don\'t want to go there.

DR. GARDNER: But if you have a patient‑specific product that has a
patient\'s name on it, you would want to use an NDC for that; is that
what your question is?

MR. NEWMAN: Yes, because sometimes‑‑just take something like oxytocin
where it is compounded but it is for many‑‑you leave space for a
patient\'s name but you have got many patients coming in for labor and
delivery in the hospital in any one day. So you would still have that
specific NDC number for that oxytocin at that concentration in that
diluent‑‑some hospitals like normal saline, et cetera, Ringer\'s
lactate, whatever it might be.

But what is good about it, really, the advantage we see is that it does
get you that traceability right to the patient and right back to us so
there is a public‑service aspect to it. It is just how do we fit it into
the rules and the system.

MR. BERNSTEIN: Thank you.

MR. MIRABELL: I am Dave Mirabell, Director of Regulatory for Hollister
Stier Laboratories. Hollister Stier is a manufacturer of allergenic
extracts as well as a contract manufacturer of parenteral drugs and
biologics.

Speaking regarding allergy extract, part of the business today, allergy
extracts, generally speaking, have been exempt from NDC numbers. In many
cases, about 10 generic numbers have handled the whole product line. By
the whole product line, I mean that, under allergy or biologics, we have
650 different source materials under our BLAs.

That equates, in the product lines of sizes and formulations to well
over 2,000 NDC numbers. In actual practice, my firm actively extracts
and manufactures about 350 different source materials but that still
relates to well over 1,000 unique NDC numbers.

That is just for those products that we would deem stock. The prior
gentleman talked about custom formulations, custom manufactured
products, that we would manufacture for specialists such as allergists
or ENTs. Those are finite as to the combinations of allergens and
dilutions and package sizes that might be related.

I have no idea what this industry will do regarding those products. I
also want to relate that, probably unique to‑‑most, 99 percent, of the
allergy extracts are shipped directly to the specialist. They do not go
into the normal distribution chains that most here probably relate to.

So I am just letting you know the complications of this biological
product line and, if we do move forward in trying to meet these rules in
some regard, it will be a difficult adventure for the seven small
business companies that are involved in this practice.

I also want to relate kind of a different situation. If you take 350
different allergens for NDC numbers, in one product form, that means one
package insert, or one PPI, in this proposed system will relate. We will
use the same PPI for those 350. So each of those NDC numbers we would
file for that one formulation would use the same PPI. That relates to
about six different PPIs we have in four different product forms.

Maybe if I can add one more thing on NDCs regarding diluents for
allergenic extracts. Maybe I am bit confused about what I heard
regarding different package sizes. Diluents for allergenic extracts‑‑we
have NDCs, but we relate them by size of the contents of the diluent.
So, at 2.0 ml for a buffered saline with phenole, which is one of the
products, we would have a 2.0, 4.0, 4.5, 9.0, 20, 30 and 50. We relate
them all to the base product NDC number but under the package size is
how we differentiate those.

Thank you.

MR. BERNSTEIN: Thank you. Any other comments? Otherwise, I think we can
break for lunch. We are hoping to start again at 1:00 p.m. this
afternoon with more speakers.

\[Whereupon, at 11:55 p.m., the proceedings were recessed to be resumed
at 1:00 p.m.\]

A F T E R N O O N P R O C E E D I N G S

\[1:00 p.m.\]

MR. BERNSTEIN: Good afternoon everybody. I think we will try to keep
moving along with the same kind of efficiency that we had this morning
and go right to the afternoon speakers off the schedule agenda.

**Public Speakers**

MR. BERNSTEIN: The first speaker is Heidi Horn from Perrigo.

MS. HORN: Good afternoon. I\'m Heidi Horn. I have worked in the Perrigo
Regulatory Affairs Department for the last 17 years and have overseen
the management of NDC‑number assignment and drug listing for the last 16
years. In fact, Perrigo was the first company to propose and have
accepted by FDA a 2658 form that could be completed electronically.

At the sake of dating myself, I remember when we were managing NDC
numbers before they were used to track Medicaid reimbursement. So a lot
has changed over the years but, yet, I think improvement is still
needed.

I would like to thank FDA for giving us this opportunity to speak today.
I am also excited about the opportunity to improve not only the
efficiency but also the accuracy of the NDC number system and use
today\'s electronic technology to do so.

The Perrigo Company has been in business in 1876. Today it is a
prescription, generic prescription, manufacturer as well as the
nation\'s largest store‑brand‑‑also a term for private label‑‑OTC drug
manufacturer.

We manufacture 450 products for 45 private‑label distributors, CVS,
Walgreens, Rite‑Aid, in a variety of different sizes. This results in
7,000 active NDC numbers.

The scope of Perrigo\'s product line requires Perrigo to provide and be
responsible for a variety of different roles. We are a manufacturer. We
are a labeler. We are repacker and we are a distributor. Each of these
roles have given Perrigo the opportunity to gain valuable and extensive
knowledge into the management of NDCs. In addition, Perrigo participated
in the e‑drug‑listing pilot program.

Since private‑label distributor is a large part of my presentation, for
clarification purposes, I would like to define what the private‑label
distributor is. In my mind, private label and store brand are
synonymous. I believe that store brand does a better job of describing
this business because every store has a name and that name is a large
part of their marketing program.

The name is displayed on the building before you walk into the store to
make a purchase. The name is displayed on banners when you walk into the
store. The name is on the name tag of the employees trying to help you
out. The name is on the bag that holds your purchases as you walk out of
the store and the most painful part of the shopping experience, it is on
the receipt.

But the name is also on the front of the label as well as the back of
the label and signature line of the products that Perrigo manufactures.
In other words, the private‑label distributor is the retailer, CVS,
Walgreens, Rite‑Aid. They are not in the business of manufacturing and
packaging products. They are in the business of retailing.

So who is responsible for the regulatory compliance of these
private‑label products? It is the private‑label manufacturer that is
responsible for the compliance of the product, not only with FDA
regulations but with other governmental agency registrations.

Therefore, most private‑label manufacturers are responsible and
accountable for assigning NDC number and doing the drug listing for the
private‑label distributor. In fact, there are only private‑label
distributors that do business with Perrigo that assign their own NDC
numbers and do their drug listing.

There are many reasons that Perrigo has gained knowledge and experience
in managing NDC numbers. One is that the private‑label manufacturer is
in the middle. What I mean by that is a private‑label distributor gives
the private‑label manufacturer NDC‑number information such as NDC‑number
format as will as the signature‑line information.

Then it is the private‑label manufacturer that takes that information,
assigns the NDC number for the private‑label distributor and then
submits that information to FDA. If FDA has a question, they come back
to private‑label manufacturer, Perrigo, who, in turn, may or may not,
depending upon the question, have to go back to the private‑label
distributor. Then we forward the information on to FDA.

So, really, Perrigo is in the middle of the relationship between the
private‑label distributor and FDA.

Secondly, questions, questions and more questions from the private‑label
distributor. What is the NDC number used for? Does everybody use the
same NDC‑number format? I don\'t understand. Who signs those NDC
numbers? And, the most commonly asked question, why can\'t I use NDC
numbers on dietary supplements.

Secondly, education, education and education. Several of Perrigo\'s
foreign buyers have encountered issues when importing products into the
United States. Many of these issues are due to incorrect assignments of
NDC number and/or lack of drug listing.

Perrigo gets involved, educations the importer, gets them the
information they need so they, in turn, can get FDA the information they
need to release the product in customs, or from FDA.

Because of Perrigo\'s relationship with FDA, and the private‑label
distributor, as well as the variety of roles it plays in the supply
chain, Perrigo has found itself a place to ask questions and to give
answers regarding NDC numbers.

My presentation today is going to focus on the complexities associated
with the current and proposed NDC‑number system and the respective
volume of NDC numbers assigned.

There are several factors that drive NDC changes and add complexity.
These are today\'s factors. One is acquisitions. But let me lay out a
scenario for you, just a real‑time scenario. XYZ private‑label
distributor assigns their NDC numbers and submits the NDC numbers to
Perrigo to place on their art work.

Over the course of time, we noticed that the product‑code number‑‑now
this is the number that is in the center of the NDC number after labeler
code‑‑that the product‑code number was used on more than one product. In
addition, they were assigning‑‑they product‑code number was used on more
than one product.

In addition, they were assigning multiple product‑code numbers to the
same product. So we contacted them. We explained NDC‑number assignment.
They weren\'t very happy but we explained it to them and we recommended
that they contact FDA.

Well, time went on. As time went on, they contacted us and they told us
that they wanted to change their NDC‑number format. They wanted to go
from 5,3,2 format to a 5,4,1 format. Once again, we gave them the CFR
citation and we recommended that they contact FDA.

Well, as time went on, XYZ private‑label distributor acquired another
private‑label distributor, private‑label distributor ABC. XYZ said, what
a wonderful opportunity for us to clean up our NDC‑number system. So
they chose to use the labeler code for ABC private‑label distributor as
the opportunity to clean up their NDC number and consequently used ABC
labeler code with ABC signature line and XYZ signature line.

We tried to bring to their attention that that wasn\'t correct. There is
a happy ending to this story. The happy ending is that they were, then,
acquired by another private‑label distributor who did understand the
rules and regulations as it relates to NDC numbers and labeler codes. So
acquisitions is one area that adds complexity to the current NDC‑number
system today.

Changes in signature lines; some private‑label distributors go through
restructuring. This can also create changes to NDC number.

Product reformulations that involve active‑ingredient changes is another
area that can add a lot of complexity with today\'s NDC‑number system.
The nasal‑decongestant category, I think, is a great example of this. In
2000, phenylpropanolamine was voluntarily removed from the marketplace.
So cough‑cold manufacturers replaced phenylpropanolamine with
pseudoephedrine. Well, pseudoephedrine was used in the production of
methylamphetamine. Consequently, all pseudoephedrine‑containing products
were removed from the retail shelf and placed behind the counter.
Consequently, a lot of the pseudoephedrine‑containing products were
discontinued.

Well, in order to provide the consumer, who didn\'t want to use the
assistance of a clerk or a pharmacist in order to obtain a
nasal‑decongestant product, cough‑cold manufacturers are introducing
another nasal decongestant product which contains phenylephrine.

So, phenylpropanolamine, pseudoephedrine, phenylephrine; all these
changes have created changes in NDC numbers not only for one company,
one product, but for all products containing those active ingredients
for all distributors containing those active ingredients.

Lastly, a private‑label distributor changes vendors. Due to pricing,
product supply and product‑offering considerations, private‑label
distributors will switch from one private‑label manufacturer to another
private‑label manufacturer. When Perrigo was given the new business from
private‑label distributor‑‑we call it takeaway business‑‑from a
competitor, we will assign that product a new NDC number and the former
supplier will have to then delist it. So private‑label distributors
changing vendors do add additional complexity to the system.

What I would like to do is I would like to walk through a supply‑chain
scenario. This is a present‑day supply‑chain scenario. Where I would
like to focus is on the private‑label distributor here at the bottom.

This is a product. It is a soft‑gel product. This soft‑gel product is
supplied to Perrigo from Supplier A and well as from Supplier B. In
addition to that, we have a soft‑gel product packaged into blisters at a
contract packager as well as an in‑house packager. All of these parts
and pieces come back to Patent Office and the blister strip is packaged
into a carton at Perrigo and then distributed to the private labeler.

So we have Supplier A can use contract packager. Supplier A can use
in‑house packagers. Supplier B can use contract packagers. Supplier B
can use in‑house packager. Both get sent to Perrigo for cartoning and
then it is shipped to the private‑label distributor. This today results
in one NDC number.

Based on our earlier conversation today, I do want to say that it is the
lot number that gives us traceability of that finished good back to
whether it was packaged at the contract packager or packaged with
Supplier A or Supplier B material. So there is a mechanism in place in
order to track which supply chain that product went down.

So let\'s say Supplier A shuts down their plant. If supplier A shuts
down their plant, what impact does that have on the NDC number of the
private‑label distributor? None.

Okay. Or the contract packager decides to bring in new equipment and
cannot package for us for a period of time so all of our packaging must
be done in‑house. What impact does that today have on the private‑label
distributor\'s NDC number? None.

But if the private‑label distributor acquires somebody or goes through
an acquisition, that results in a new NDC number. If the private‑label
distribution decides to source the products from another private‑label
manufacturer, that results in one NDC number and if the regulatory
status of active ingredients changes, that results in a new NDC number.

The reason I reiterate those points is because, if you look at the
commonality between those points, it is actually the marketplace that is
driving changes to NDC numbers today, those things that happen after the
finished goods are completed.

So, next scenario. Added complexities with the proposed rule. Added
complexities with the proposed rule are driven by supply‑chain
scenarios. These supply‑chain scenarios are those events that need to
occur in order to develop the finished goods.

So, with the proposed rule, the changes are being driven by the supply
chain not necessarily by the marketplace. These are changes in
inactive‑ingredient change in manufacturers and changes in contract
packagers.

So we will take the same supply‑chain scenario that we had previously.
Okay. So Supplier A can use either a contract packager or in‑house
packager. Supplier B can use a contract packager or in‑house packager.
It results in four different supply chains, all four, and four data NDC
numbers, all four, one private‑label distributor, one product, one size.

So let me make sure I am getting this across. We have four supply
chains. Supplier A contract packager, Supplier A in‑house packager,
Supplier B contract packager, Supplier B in‑house packager. This is for
one product, for one size, for one private‑label distributor.

It results in four times the labeling, one for each private‑label
distributor, and it results in four NDC numbers. But it is for one
product for one size for one private‑label distributor.

AUDIENCE: I have a question of clarification. Are Supplier A and
Supplier B the same company, or are they two separate companies?

MS. HORN: Supplier A and Supplier B are two separate companies.

Due to the volume of labeling and NDC numbers, efficiency becomes a
concern since Perrigo must carry four times the inventory. In addition,
it means that Perrigo and FDA will need to manage four times the NDC
numbers, not to mention the confusion that it will cause the
private‑label distributor.

But, hang on. Maybe there is a different way to manage this. Let\'s
reduce the complexity by supplying some customers with Supplier A\'s
product and the remaining customers with Supplier B\'s product. Then
Perrigo is carrying half the inventory for each customer‑‑excuse me,
private‑label distributor‑‑and FDA and Perrigo are managing half the NDC
numbers.

I think the idea has got merit. But, for some unknown reason, Supplier A
has decided not to service Perrigo. Perrigo must find another supplier,
Supplier C. Because Perrigo begins to source product from Supplier C,
new NDC numbers need to be assigned requiring new labeling. New
labeling. It takes five months to create the new label. Five months. So
it is at least five months that I am not serving the private‑label
distributor.

Also, in addition to that, the consumer. Will they have product that
they need, not to mention more NDC‑number changes. So I think I want to
go back and carry four times the inventory or four times the NDC numbers
so then I guarantee product supply.

Okay. That\'s all right. So the equipment at the contract packager now
needs to be changed and replaced. Perrigo needs to solely rely on
in‑house packaging but the capacity of Perrigo isn\'t great enough in
order to supply all the needs of the private‑label distributors.

What? More challenges? This will give the private‑label distributor
cause to change suppliers. That means changing the private‑label
manufacturer. Perrigo will lose the business to another private‑label
manufacturer. More NDC‑number changes, less business for Perrigo.
Neither of us benefit.

Oh, no. The incorrect label is placed on a product produced from a
different supply chain. Supplier A contract‑packager label is placed on
a product actually manufactured by Supplier B and in‑house packaged.
Although the label information will allow the consumer to use the
product safely and effectively, the product is misbranded.

We will need to rework the product and correct the labeling. What would
that do to supply? What will that do to cost?

The proposed supply‑chain criteria to change NDCs coupled with today\'s
market‑driven changes to NDCs is not only increasing the complexity of
the system but is also increasing the volume of NDC numbers.

So let\'s compare the current process to the proposed process. On
average, Perrigo has 30 private label distributors carrying three size
codes per product. It is 90 NDC numbers to manage in the current
process. In the proposed process, that is 360 NDC numbers to manage.

The current process. NDC‑number changes are driven by the marketplace
wherein the process, these NDC‑number changes are driven not only by the
marketplace but also by the supply chain changes. Private‑label
manufacturers carrying one label per product per private‑label
distributor per package size versus multiple labels for one product per
private‑label distributor for one size.

What about the potential for mix‑up, misbranding? In addition; able to
react to product‑supply needs to prevent retail shortages in the current
process. The proposed process; unable to react to product‑supply needs
resulting in retail shortages.

Last, to do a label conversion in the current process costs‑‑just to
change the labeling‑‑\$90,000. In the proposed process, it will cost
approximately \$360,000. This difference, probably more than likely,
will be passed on the consumer.

So why did I want to focus on private‑label distributors? Because the
NDC number associated with the private‑label distributors will change
not only with market changes, as in the current process, but also with
supply changes as in the proposed process. This will dramatically
increase the volume of NDC‑number changes and consequently the cost of
the providing these products to the consumer.

So what is my real concern? Increased volume and increased complexity
will increase the possibility for error when the objective is to make
the NDC‑number system more accurate.

Recommendations. Our recommendations are based on two objectives;
improving the accuracy of the NDC‑number system and maintaining that
level of accuracy and, secondly, improving efficiency of submitting and
maintaining NDC‑number format.

I am asked to stop, but I would like to run through my recommendations,
if that is okay. It probably won\'t take me more than a couple of
minutes. Objections? Okay. Thank you very much.

First, maintain the current rules of assigning NDC numbers. Before we
attempt to manage a system more complex than we have today, let\'s try
to improve the accuracy of the current system and maintain that level of
accuracy for a period of time. Increasing the level of complexity will
potentially double the number of NDC numbers. It will be difficult, with
this larger volume of NDC numbers, to identify which aspects of the
system are causing the problems and which aspects of the system are
actually providing the efficacy.

Secondly, remove the ability of private‑label distributors to assign NDC
numbers and drug lists. The private‑label manufacturers are, for the
most part, managing NDC‑number assignment and drug‑listing
responsibilities for private‑label distributors today. Remove that
variable.

Third, implement electronic drug listing. Reducing the number of times
the same information has to be processed will reduce the chance of
error. If the manufacturers are allowed to input the information
directly into the database or work‑in‑process site, FDA personnel would
only need to check the accuracy and do minimal data entry saving FDA
time and improving efficiency.

The electronic process of obtaining a food‑facility license is fast and
efficient. My hope is for the same or similar outcome for the drug
listing.

Last, invest in education regarding the current requirements. Many of
the inaccuracies generated by the current system can be overcome with
education and clarification. Perrigo has experienced this with
private‑label distributors. Offer FDA‑led classes or issue guidance
documents. The guidance documents are an excellent tool toward
communication and education.

The guidance document that was used in response to the Food Labeling and
Consumer Protection Act has been an awesome resource. I know that it has
been issued several times over the last year. The question‑and‑answer
format used in that guidance document is very effective.

Then that will give you a tool, also, that if further clarification is
needed, like, no, you can\'t put NDC numbers on dietary supplements,
mentioned four or five times, then you can do that. I am encouraging
that.

I am confident that the combination of these four points will result in
a more efficient and accurate NDC‑number system. Once this has been
accomplished, then let\'s sit down and discuss additional changes to the
NDC‑number system.

I have one last point. At the request of FDA, several years ago, FDA
asked Perrigo if they would drug‑list their products on a quarterly
basis, not a biannual basis. Perrigo and FDA have tried to work
together, due to the volume of our drug listings, to come up with
different means of meeting this objective and meeting this requirement
efficiently and accurately.

What I am hoping is that Perrigo can work with FDA in looking at what
ideas and suggestions in using our knowledge and experience to do the
same here in the future.

Thank you.

MR. BERNSTEIN: Thank you. I would offer an opportunity for follow‑up
questions if anybody on the panel has any.

MR. LEVIN: I have a question. On your present‑day, let\'s say you change
Supplier B and are now using Supplier C, no change in the NDC number.

MS. HORN: Yes.

MR. LEVIN: So, really, at the top of this is the private‑label
manufacturer.

MS. HORN: No. Actually, in those particular‑‑

MR. LEVIN: They are controlling the whole thing.

MS. HORN: Oh; correct. We are controlling the whole thing.

MR. LEVIN: So you are at the top there. You have these suppliers that
you contract with. This is the contract and you are contracting with
this packager.

MS. HORN: I want to add one point of clarification. Actually, Supplier A
and Supplier B have a product. It is a soft‑gel product‑‑Perrigo
doesn\'t have soft‑gel technology‑‑that they offer to a variety of
different manufacturers and packagers in the industry. So it is really
Supplier A\'s and Supplier B\'s product. They fill out the 2657 form for
the product.

Then we purchase that product from them. We obtain the information from
them in order to create our labeling and do our quality‑check systems.

MR. LEVIN: And list their products.

MS. HORN: Right. We are not going to them and saying, will you please
manufacture us a soft‑gel product that contains X, Y and Z active
ingredients. They already offer for sale a soft‑gel product with X, Y
and Z active ingredients.

There is a difference. I think it is important to discuss this
difference because I think, through our trade‑association meetings,
there is confusion as it relates to what is a private‑label distributor
and what is a contract manufacturer. Yet I think Supplier A and Supplier
B as yet a third category.

If I am a branded company and I have a product, I may go to another
manufacturer and give them specifications. Here is my formula. Here are
my specifications. I want you to manufacturer that for me. That is what
I consider to be a contract manufacturer.

Private‑label distributor, as I explained in my presentation, is a
retailer. Then, yet, there is what I am calling Supplier A and Supplier
B. These are people in the industry that have the technology that they
create their own products and they offer for sale their own product
other manufacturers or distributors.

MR. LEVIN: Don\'t their products meet your specifications? They are just
off‑the‑shelf that they meet your specifications?

MS. HORN: They meet our need from the standpoint that they contain the
active ingredients that we are looking for. We are not going to them and
saying, please create us this product.

MR. LEVIN: But, if you did, would you get the same product?

MS. HORN: Yes; I would. I guess the difference is this. It is who is
driving the bus. In the case of Supplier A and Supplier B, Supplier A
and Supplier B and driving the bus. They are out there trying to sell
their products.

In the case of the contract manufacturer, it is branded product that is
driving the bus. They are seeking out a manufacturer to do it. Those two
scenarios, in my mind, are different.

MR. LEVIN: Then, by keeping the one NDC number, you are controlling the
whole‑‑

MS. HORN: We are controlling the supply chain and creating a finished
product; correct. Yes; we are.

DR. GARDNER: You said here that you track those through the lot number.
You track the supply chain through the lot number.

MS. HORN: Yes.

DR. GARDNER: Do you print the lot number on the label?

MS. HORN: Yes.

DR. GARDNER: Explain. Is there a difference between printing the lot
number on the label than printing these four NDC numbers on the label
that would also track the supply chain?

MS. HORN: The difference is a lot number is placed on the finished
labeling component after the product is packaged. The NDC number is
placed on the labeling component before the labeling component is
printed. So that creates quite the dilemma.

DR. GARDNER: You couldn\'t do it after?

MS. HORN: At the moment, no.

DR. GARDNER: I mean, if it is a non‑barcoded issue.

MS. HORN: At the moment; no.

MR. LEVIN: I have another question. Go back to Supplier A and Supplier
B. They list their products. They are doing this. If they were under
contract, then they would not list those products?

MS. HORN: No; I think they would still list those products.

MR. LEVIN: So they would still list them whether it is contract or not.

MS. HORN: Yes.

MR. LEVIN: One is that they are doing it on their own versus that
you‑‑proactively‑‑versus you are getting them.

MS. HORN: I think, in some cases, they would proactively do it in either
situation. There is a check and balance between the person asking the
manufacturer to manufacture the product and the manufacturer doing it.
There is a check and balance.

MR. LEVIN: I am trying to look at the differences between these
suppliers in this situation and the contract.

MR. BERNSTEIN: Thank you very much.

MS. HORN: Thank you.

MR. BERNSTEIN: I realize that we are running a little behind now. There
is some extra time built in‑‑it is kind of like an airline schedule,
there is some extra time built into some of the intervals between
speakers. We would be able to pick that back up.

Next up is Madeline Palla from the Animal Health Institute.

MS. PALLA: My name is Madeline Palla. I am the Manager of Regulatory
Affairs for the Animal Health Institute. AHI is a national trade
association representing manufacturers for animal‑health products,
pharmaceuticals, biological products and feed additives used in modern
food production and the medicines that keep livestock and pets healthy.

AHI member companies represent the majority of animal pharmaceuticals
and animal insecticides as well as serving a significant segment of the
world market. As such, we have a tremendous interest in the development
of policy affecting requirements for foreign and domestic‑establishment
registration and listing for animal drugs.

The FDA\'s effort to implement an electronic‑establishment regulation
and drug‑listing system are to be commended. Members of AHI, however,
feel the impact of the proposed rule on many aspects of the
animal‑health industry has not been given full consideration in the
development of the regulation.

Implications for animal‑drug sponsors include financial system, process
and resource ramifications. With respect to the National Drug Code
portion of the proposed rule, we raise the following issues.

One, assignment of an NDC number. The way the proposed regulation reads,
the appropriate NDC number is the NDC number that the FDA has assigned
to the last manufacturer, repacker or relabeler or private‑label
distributor responsible for the drug immediately before it is received
by the wholesaler or retailer.

The animal‑health industry currently uses the sponsor code as the
labeler‑code portion of the NDC number even if the sponsor does not
manufacture the drug product. The proposed rule appears to take away an
enormous amount of control from the entity with the most vested interest
in the process, which is the drug sponsor.

The definition of a drug sponsor is used in these comments as the owner
of the drug application. However, they do not always manufacture the
drug. For example, many of the drugs are told\[?\] manufactured for the
sponsor.

MR. LEVIN: Contract manufacturing.

MS. PALLA: If less sponsor involvement is not the proposed rule\'s
intent, the manufacturer definition needs to incorporate the sponsor. If
a drug has an application and, therefore, a sponsor, the drug sponsor
wants to retain the ability to drug list.

Two, implementation of the NDC number changes. FDA is proposing that the
electronic drug registration and listing system be used to enter and
update all NDC‑number information as well as all registration and
listing information no later than 9 months after the effective date of
the final rule.

An overview of the proposed electronic‑system requirements should be
available prior to the finalization of the rule. It is critical that
companies be able to assess their ability to submit information prior to
the rule coming into effect. If the FDA system only accepts structured
product labeling, the animal‑health industry is at a severe disadvantage
as currently SPL is not required for animal drugs.

Clarification is needed as to whether the animal‑health industry will
have to drug‑list all of their products again or if there will be a
migration of the data to the CDER database.

Currently, if you go on line to look up NDC numbers on FDA\'s website,
only CDER products NDC numbers are available. AHI would like to know if
FDA intends to create one combined system for CDER and CVM.

Three, revision of an NDC number. The animal‑drug industry will incur
significant additional costs with the revision of an NDC number. To put
the financial burden in perspective the animal‑drug industry\'s total
pharmaceutical sales for 2005 was estimated to be approximate \$3.9
billion compared to the human pharmaceutical industry\'s estimated sales
of approximately \$164 billion.

For example, there is significant cost to industry to change a product
label including changes to the printing plate for the label, existing
inventory that may no longer be used after the implementation date, cost
of production of new labels, time and resources used to change the
labels.

AHI would like to know if the economic impact to the animal‑drug
sponsors has been taken into account while writing the proposed rule as
well as the potential effect of costs incurred by the industry raising
the product prices for the consumer.

Our fourth concern, the requirement to have the NDC number in the
barcode. There are several significant NDC issues raised as a result of
present barcoding practices. Some segments of the animal‑health industry
currently utilize UPC barcodes on their labeling. GS1 issues the barcode
owner\'s I.D. based on the FDA labeler code. Therefore, a similar
numbering system is used for nonregulated products with UPCs.

Potentially, the NDC assigned by FDA could duplicate a code already
assigned as a UPC. This impacts all layers of the supply chain down to
retail outlet. If a UPC were required, the inventory costs would be
substantial. The animal‑health industry should be exempt from the
requirement to include the NDC on all labels with barcodes as it will be
a great expense providing no apparent benefit to the health and safety
of animals.

This requirement would present great difficulties in cases where other
information is barcoded for manufacturing control. It is also important
to note that changing the barcoding system does not only affect that
drug sponsors, the manufacturers, but it will be a costly change for
distributors that use the barcode data for their inventory and sales
records.

It will require change to their electronic tracking systems and
significant employee hours to incorporate the changes for multiple
products.

I do have one last point after listening to several of the speakers
today and what the NDC code is used for in human‑health products, it
seems to me that a lot of it is to match the drug to the patient in the
hospital or to make sure they are getting the right dose, the right
drug, and then also used for Medicare rebates. The animal‑health
industry does not have a need for tracking these same things.

I very much appreciate the opportunity to speak today. If there are
questions or clarification from the panel, I would invite some of the
Animal Health Institute members that are in the audience to assist me in
answering those questions.

MR. BERNSTEIN: Any follow‑up questions from the panel? Thank you very
much.

Next up is Mark Meteyer, President and CEO of the Compressed Gas
Association.

MR. METEYER: Thank you very much. My name is Mark Meteyer. I am
President and CEO of the Compressed Gas Association. CGA represents over
130 members. These are industrial and medical‑gas companies involved in
all types of gases including medical gases as well as the equipment
producers. We are a standards‑development association. We have been in
the business of developing safety standards for over 93 years.

First, I want to thank FDA for extending the comment period. I think it
is very useful to have this dialogue and it gives us additional
opportunity to fully analyze the impact of the rule.

I also want to thank you for the opportunity to comment today on the
proposed rule of the National Drug Code System. The Compressed Gas
Association and the Gases and Welding Distributor Association‑‑I will be
speaking on behalf of both of them today‑‑represent over 1,000
pharmaceutical manufacturing locations that may be affected by this
proposed rule.

The CGA and GAWDA understand the agency\'s objectives to improve patient
safety and the timeliness and accuracy of traceability. However, it does
not appear that agency considered the unique aspects of the
medical‑gases industry when estimating the effect of new requirements on
industry.

For instance, traditional pharmaceutical packages are typically
single‑use medical‑gas packages that are re‑used for decades, are
refilled in different locations within the same company and, under
current FDA regulations, only require a new drug‑product label when the
existing label is damaged.

The proposed rule will require that the drug‑product label include the
NDC code that is specific to the filling location, package type and
size. This will require a significant increase in drug‑product‑label
replacement and the time and effort needed to properly control the label
inventory. The agency has proposed a regulation that would significantly
increase the complexity of medical‑gas‑industry compliance. The proposed
regulation would also result in unintended consequences that are at odds
with the stated objectives.

The following points will explain how the proposed rule will increase
the likelihood of unintentional misbranding, put patient safety at risk,
cause hardship on the industry without achieving the stated objectives
and ultimately may limit the availability of medical gases in some ares
of the U.S.

Present industry practice for each company is to have one product label
for each product type. Under the current proposal, a company could have
over 40,000 substantially similar labels for a single product and
require different labels to be affixed to cylinders in the same batch or
lot number.

This increased activity of placement of substantially similar labels
logically multiplies the potential for product misidentification
contrary to the agency\'s stated objective. In addition, for our
industry segment, there is no obvious advantage to including package
size or package material in the NDC code.

We do not believe that the cost of compliance was evident to the agency
when it developed the proposal. The increased costs associated with
labeling activities are substantial. For example, a 700 percent increase
in label replacement. This would amount to an \$80 million investment in
the first year and \$10 million in each subsequent year for oxygen
alone, smaller runs of multiple labels with higher printing costs per
label, increased receipt, inspection and release effort and
documentation, increased storage requirements to segregate label types,
increased controls to have multiple labels available per batch run.

We believe that the proposed rule may provide marginal improvement and
traceability for medical gases. However, it provides no improvement in
traceability for a large segment of the medical‑gas suppliers.

For instance, the proposed regulation fails to address the existing
situation where it is common practice for unregistered entities such as
pharmacies, hospitals, clinics and public‑health agencies including
emergency responders and fire stations to refill cylinders bearing the
labels affixed by the previous gas manufacturer.

Therefore, the intent of the regulation is not achieved in that the
agency will not be able to identify the actual manufacturer based on the
NDC code when the product is manufactured by one of these unregistered
entities.

There are potential implications for patient safety with this new
system. Under the proposed rule, the FDA must assign a new NDC code with
the manufacturer, repacker or relabeler for every new product and
packaging combination or combinations that are considered discontinued
and need to be provided again.

In addition, a private‑label distributor must go through their supplier
for an NDC code for every new product‑packaging combination. This could
result in significant delays before an NDC is assigned resulting in
patients not receiving needed drugs in a timely fashion especially in
disaster‑recovery situations; for example, the area affected by
Hurricane Katrina.

Similar situations occur on a smaller scale in the oxygen‑distribution
chain and it is not clear that the agency and our label vendors have the
resources to provide timely support to help industry assure that
patients receive their prescribed oxygen.

Nearly 60 percent of the medical‑gas supply chain is serviced by
independent medical‑gas manufacturers many of which are small
businesses. Imposing these requirements and associated costs on small
firms, especially since these changes will not provide a commensurate
improvement in the safety and security of the medical‑gas supply chain
could result in many of the firms existing the medical‑gas business.

The likely impact of this would be to significantly limit the
availability of medical gases in many areas of the U.S.

In summary, for medical gases, this proposed rule will cause increased
errors in misbranding, increased costs with questionable benefit
regarding traceability and increased risk to patients due to delays in
supply and potential unavailability of life‑sustaining medical gases.

CGA will be submitting more detailed written comment prior to the
January 26th deadline. We appreciate the opportunity to address the
proposed rule and look forward to working with FDA to address our
concerns.

Thank you.

MR. BERNSTEIN: Thank you. Any follow up? Thank you very much.

John Willenbrock

MR. WILLENBROCK: Good afternoon. My name is John Willenbrock. I am
President of Gas Regs Incorporated and am representing AA Homecare as
its Vice Chairman of our Medical Gases Committee.

The American Association for Homecare, AA Homecare, would like to thank
the agency for providing us with the opportunity to comment on the
proposed changes to the NDC system. We will be submitting our comments
on these and other aspects of the proposed registration and listing rule
by January 26.

AA Homecare represents approximately 700 healthcare providers with
approximately 4,000 locations nationwide. These providers include
manufacturers, suppliers and home‑health agencies who furnish healthcare
services and durable medical equipment to hundreds of thousands of
Medicare and other government and private payer beneficiaries.

A significant portion of our members provide medical gases, primarily
oxygen, to respiratory‑care patients at their residences. Although we
support the agency objectives to improve patient safety and product
traceability, we are not sure the proposed changes will achieve those
objectives in the case of medical oxygen.

Our comments today are limited to the proposed requirement to have the
appropriate human readable NDC number appear on the drug label and the
impact that that will have on both our members who manufacturer and
distribute medical oxygen and on the patients we serve.

AA Homecare fully supports the comments just made by the Compressed Gas
Association and the Gases and Welding Distributors Association. Like CGA
and GAWDA, many AA Homecare members fill and refill their own oxygen
cylinders. The same cost‑benefits concerns that these associations have
raised regarding their members and the customers that they serve apply
to our members and our patients as well.

We are concerned about the potential mix‑up of labels at each filling
location when the only differentiator between oxygen labels would be the
container size and type theoretically differentiated only by one or two
numbers or possibly letters in a 10‑ or 11‑digit NDC. Unlike most
pharmaceuticals, different size and types of containers can be filled or
refilled at the same time on the same high‑pressure filling line because
container size is not dose‑specific and container material such as steel
or aluminum does not impact drug‑product quality and safety.

Where only one compliant label is currently required, the proposed rule
would require multiple unique labels for each size cylinder. Until this
morning, when a slight clarification was made, this could also be
compounded by the number of different filling locations, in some cases
several hundreds within the same company.

Similar concerns exist for liquid oxygen units with different capacities
filled at homecare facilities and at patients\' homes. Where one label
currently suffices, multiple labels would be needed.

The agency acknowledged the fact that container differentiation was not
necessarily a patient‑safety issue when it exempted medical gases from
the barcoding requirement a few years ago. In addition to those
concerns, many of our member companies own their own cylinders labeled
with an oxygen USP label bearing their company name preceded by the
words, \"distributed by.\"

They currently have those labeled cylinders legally filled by several
firms often in different parts of the country. Under both the current
and proposed rules, these firms would be considered private‑label
distributors. However, under the proposal, they would not be permitted
to obtain their own NDC number as they currently do.

The proposed rule would require the filling firm to obtain an NDC code
that is unique at that filling location increasing costs and causing
unnecessary delays in providing patients with their needed oxygen.

For example, a patient that travels to Florida from New York with an
oxygen cylinder that was contractually filled by one of our members in
New York using the \"distributed by\" statement could not legally be
filled by that member\'s contracted firm in Florida without a change in
label.

How long will it take us to obtain an NDC labeler‑code number, obtain a
new label from our label manufacturer, have that manufacturer relabel
the cylinder and, finally, provide it to the patient. We question what
additional safety is gained from this proposed requirement.

The requirement would also create a barrier to changing medical oxygen
suppliers not present today. Consideration would now need to be given to
the additional time necessary to obtain the new NDC number, the
additional costs in time to have the new numbers printed, new labels
printed, then the cost in time to have them replaced on all cylinders.

In some cases, the labels are placed under a coating to enhance label
readability and prevent damage. To remove and reapply the coding with a
new label will be cost‑prohibitive. We also have concerns with how this
proposal will impact our members and CMS as we wrestle with the new
budget law requiring the transfer of container ownership from the home
healthcare company to their patient once the patient has been on oxygen
for 36 months.

In conclusion, we look forward to working with the agency to address
these concerns and we invite the agency to contact us to answer any
questions with what we have presented today or any concerns which you
may have with our written comments.

Thank you.

MR. BERNSTEIN: Thank you. Any follow up? Thank you very much.

Next up is Paul Larsen of the Consumer Healthcare Products Association.

MR. LARSEN: Good afternoon. My name is Paul Larsen and I am the
associate general counsel of the Consumer Healthcare Products
Association, or CHPA.

CHPA was founded in 1881 as a trade association representing
manufacturers and distributors of non‑prescription or over‑the‑counter
medicines in dietary supplements in the United States. Our 65 active
members account for over 90 percent of the OTC medicines used and
trusted by Americans to treat their common everyday illnesses and
conditions.

CHPA supports FDA\'s efforts to establish an interactive electronic
establishment registration and drug‑listing system. This technological
advance can improve efficiency and aid in the detection of errors,
omissions or other problems in registration and listing information.

To ensure a fully functioning system that meets the goals of the agency
and minimizes the impact of industry, CHPA would like to work with FDA
in cooperation during this developmental phase. We are, however,
concerned about several changes that are being proposed to the
NDC‑number system that are intended to remedy certain perceived
shortcomings in the system.

Our member companies have given us extensive feedback on these proposed
changes. We will be addressing a subset of these concerns and offer
solutions during today\'s meeting. We will also be submitting detailed
written comments in the proposed rule in January.

CHPA encourages the step‑wise approach that focuses first on the
development of an electronic system that utilizes the exiting NDC‑number
system. CHPA further supports issuance of draft guidance in technical
specification on the electronic submission of registration and listing
information. We believe this approach will best serve FDA, the regulated
community and ultimately the American consumer.

The first issue we would like to address concerns the proposal to
designate the responsibility of assigned NDC numbers to FDA. CHPA and
its member companies have several significant concerns with respect to
this proposal. To begin, one of the agency\'s goals in designating the
responsibility of assigning the NDC number to FDA is that manufacturers,
repackers and relabelers will be able to obtain their NDC numbers
quickly and, as a result, prepare product labels and marketing plans
earlier.

But, as we at CHPA have learned from our member companies, FDA
assignment of the NDC number, even if done electronically, will undo
needed flexibility. For manufacturers of OTC monograph drugs, the
proposal would cause a fundamental shift in the \"go to market\"
structure of the monograph system.

Under this system, marketing preclearance of OTC drug products by FDA is
not required if the standards of the applicable monograph are met.
Having to obtain an NDC number from FDA in effect subjects these
products to a form of premarket review. Timely consumer access to these
products could be negatively impacted especially in light of the fact
that vast majority of OTC drugs on the market today are monograph‑based.

Currently, NDC number are often assigned well in advance of the actual
launch of the product, sometimes several years or more. At the time of
assignment, formulas, packaging, imprint information and even the
manufacturing site may not be fully known. Trade customers routinely
request NDC numbers for products that are scheduled to launch but not
yet in production.

The need for flexibility and providing early alerts of NDC numbers to
trade channels may be affected by the requirement that FDA issue the NDC
number because the information to request the number may not be
available or is for a developmental product that is not yet final.
Short‑term promotional skews can also be adversely affected or, in
certain cases, altogether halted due to the intervening step of FDA
assignment.

FDA\'s proposal lacks a needed mechanism to change information in the
NDC number application prior to the listing information being submitted.
Any number of changes could occur at this stage of development, from a
change to the proprietary product name to replacement of the
preservative system system and the formulation based on stability data.

Under the proposal, if a product is changed after the request for an NDC
number has been submitted, there could be multiple NDC‑number requests
and numbers for a drug prior to commercialization. The risk of confusion
in product‑launch delays in this situation would be high.

Similarly, if a product is changed after the product has been assigned
an NDC number or reached the marketplace, the company\'s internal
records, manufacturing and control documents in embedded universal code,
or UPC, carrying the first issued NDC number would have to be revised.
New labels and art work to reflect the updated NDC number would have to
be created and previously prepared labels may become obsolete.

The burden associated with these reworkings and increased inventories is
substantial particularly for smaller companies with fewer resources.
Again, the risk of confusion in product launch dates would be high.

It is also unclear what would become of an NDC number that is assigned
to a particular product or dosage form that is never launched. Would a
manufacturer, repacker, relabeler, be required to withdraw this
information? A similar question arises with respect to a product that is
changed after the request for an NDC number has been submitted. What
becomes of this information?

Our member companies have also expressed concern with the requirement to
consolidate labeler codes and the confidentiality of that information
from products and and business relationships prior to launch.

Next, we would like to register our concern with the requirement that
the information to be submitted to obtain an NDC number includes
inactive ingredients. Inactive‑ingredient changes in a product, whether
qualitative or quantitative, can occur before or after the product is
launched for any number of reasons.

The inactive ingredient may be replaced because it is unavailable or has
become too expensive or a new raw‑material vendor may have acceptable
specifications with no effect on the product that vary from those of the
previous supplier.

Where a product has more than one manufacturing site, especially between
a foreign and domestic site, there is a possibility that an inactive
ingredient may be different but equal within the formula. Requiring
inactive‑ingredient information for assignment of NDC number runs
counter to the FDA\'s sanctioned flexibility that permits overinclusive
inactive‑ingredient labeling.

In November, 2001, FDA determined, in response to citizen petitions,
that overinclusive inactive ingredient labeling may be accomplished
consistent with the Federal Food Drug and Cosmetic Act by placing those
ingredients that may or may not be contained in the OTC drug product in
the inactive‑ingredient listing with an asterisk placed next to those
ingredients.

It is unclear whether the agency is now seeking to overturn this prior
determination. Under the proposal, every time an inactive‑ingredient
change occurs, unless the approved U.S. application number is provided,
a new NDC number from FDA would be required. This opens the NDC number
to being changed many more times than it is subject to change under the
current system.

It also opens the door to multiple NDC numbers being issued for the same
product. This could result in unnecessary confusion and product‑launch
delays and, as previously noted, changing the NDC number is not an
insignificant undertaking for documentation or related purposes.

We believe that existing regulatory and related requirements applicable
to OTC drugs are sufficient to address the agency\'s concerns for
several reasons. First, monograph OTC drugs may only contain suitable
inactive ingredients that are safe in the amounts administered and do
not interfere with the efficacy of the drug product.

Second, the label of all OTC drug products must specify the identity of
active and inactive ingredients. Third, the current labeling is required
to be submitted to FDA at the time of drug listing.

The third issue we would like to address concerns the criteria for
determining what constitutes the appropriate NDC number. The proposal
segments the current definition of manufacturing into four functional
types; manufacturer, repacker, relabeler and drug‑product salvager. The
private‑label distributors are not included within this group.

Under the proposal. an entity that develops a new proprietary formula as
part of its research and development for an OTC drug product and then
utilizes a contract manufacturer, or manufacturers, for commercial
production of that drug product does not meet the definition of a
manufacturer, repacker or relabeler or drug‑product salvager or a
private‑label distributor.

This quagmire produces a troubling result. The entity arguably with the
most product knowledge is unable to obtain an NDC number and listed drug
and, in effect, is classified as a private‑label distributor which it is
not.

The entity would essentially lose control of its own drug and the
contract manufacturer would forcibly be delegated this authority. In the
final rule, the definition of manufacturer should be expanded to include
an entity that is a specification developer. Alternatively, the
definitions and associated responsibilities should distinguish a
distributor which might be the specification developer for a
private‑label distributor and allow the distributor to form its own drug
listing.

As an addendum to our written comments, CHPA will be providing a list of
scenarios not unlike that which was presented by Perrigo earlier today
to help illustrate the questions and complications including assignment
of multiple NDC numbers to a single product that the proposed rule will
generate.

The next issue we would like to address concerns the agency\'s proposal
of a nine‑moth time frame for reviewing and updating the information in
FDA\'s database for NDC numbers assigned to drugs before the effective
date of the final rule.

In short, 9 months is an inadequate period of time to verify compliance.
OTC drugs on the market today are expected to have an NDC number and,
for some producers, the number of effective products will be in the
hundreds, if not thousands, at the time of the effective date of the
final rule.

The complexity of the proposal\'s NDC‑number requirements also supports
an extension. Private‑label distributors including specification
developers will, under proposal, lack the authority to access
drug‑listing information and supply needed reviews and updates. Thus,
extensive information sharing, coordination and cross‑checking between
entities will be required and this effort will be time‑intensive.

In addition, a product with multiple inactive ingredient combinations or
other minor differences may lack an NDC number for each variation of the
product. To trace and bring these products into compliance with the new
regulation, in addition to adjusting internal records and documentation
to enable the review and updates to occur, will take a considerable
amount of time.

The impracticality of achieving compliance within the 9‑month time frame
is further suggested by the fact that information entered by FDA into
its drug‑listing database is, itself, not up to date. To our knowledge,
the last such update for OTC drugs was in 2003. Until this body of
information is current, a comprehensive review cannot occur.

To account for these factors, CHPA suggests that FDA extend the period
of time to review and update information on drugs listed before the
effective date of the final rule.

Our written comments will also address the proposal to phase in the
requirements with an NDC‑number placement and appearance on OTC‑drug
labels over a seven‑year period.

The final issue we would like to address concerns the proposal that
human‑readable NDC numbers appear on the labels in drugs with the prefix
NDC. CHPA concurs with the industry feedback received by the Eastern
Research Group as outlined in the preamble, that the new label
requirements, as they apply in OTC \"unit of use\" levels such as
blister packs may pose problems.

As noted by FDA, some packaging lines per \"unit of use\" OTC products
not subject to the barcode might need to be retooled to accommodate
human‑readable NDC numbers and these modifications are expected to be
fairly challenging.

Space on the label is also a concern, particularly for small and medium
packages with limited label space. Professional promotional samples fall
into this category as well. Having both a barcode and a human‑readable
NDC number could mean going to a larger container with a larger label
which raises issues of increased cost.

What alternative we would recommend is allowing the use of \"N.\" This
option would utilize less label space than NDC and would clearly signal
the NDC number. Importantly, requiring the NDC number on secondary
packaging may create additional burdens for the labeling of temporary
skews such as promotional skews, \'buy one, get one,\" or \"bo‑gos,\"
where two or more immediate containers are repackaged into a single
carton.

In this situation, each immediate container will have an open stock NDC
number but the promotional skew may require another different NDC number
as a different packaging configuration.

New immediate containers, rather than open stock, with this \"bo‑go\"
NDC number would be required or the open‑stock immediate containers
would need to be overlabeled.

In sum, CHPA believes mandatory inclusion of the NDC number on the
product label should not be required for OTC drug products especially
those products that are skewed that do not require a barcode label.

MR. BERNSTEIN: Thank you. Any follow up?

MR. LARSEN: Just as a conclusion, I would thank FDA for the opportunity
to present today. I would be happy to answer any questions.

MR. LEVIN: I have a question. For the time frame, you talk about the
phase‑in for the labels. What is the time frame for reviewing your NDCs.

MR. LARSEN: Are you talking about for the nine‑‑well, there is
nine‑month time frame for reviewing existing NDC numbers. We don\'t
think that will be adequate.

MR. LEVIN: So how much time do you think you will‑‑

MR. LARSEN: We will address that in our written comments. We are still
sorting out that issue.

MR. LEVIN: If the NDCs are listed in the database‑‑you are talking about
that they are listed in the database and you are going to check and make
sure that you have the NDC listed there.

MR. LARSEN: Right. I think that that would be part of what is included
in reviewing and updating that information to ensure they are compliant.
I think you would have to do it on an NDC‑number‑by‑NDC‑number basis
because the issues could be different.

For example, under the proposal now, if there is an different inactive
ingredient used in a different‑‑per product, or there are inactive‑
ingredient changes, in that case, it would require a new NDC number for
each of those changes and it can get very complex quickly.

DR. GARDNER: I think the issue is related‑‑the timing issue might be
related more to developing electronic labeling than actually reviewing
information because the information would come directly from the
electronic labeling. So could you address that in your comments?

MR. LARSEN: I think using the electronic form would definitely enhance
the review and update process because you would probably be able to more
quickly identify if there were different inactive ingredients per
product.

DR. GARDNER: What I am getting at is in submitted an electronic label
that has ingredients in it and we are able‑‑it is submitted in such a
way that we can extract those and that is how we would want to do the
listing, then the time isn\'t in reviewing what is in our database. It
would be in reviewing what you put on those electronic labels. That is
the issue.

Since the information in the database is going to come directly to the
labels, transferring it from the old system isn\'t necessarily going to
help.

MR. LARSEN: Okay. Thank you. We will address that in our comments as
well.

MR. LEVIN: I have another question about inactive ingredients. So you
use the inactive ingredients that you are allowed to use as far as the
specification. In the label, itself, which inactive ingredients do you
supply? In the label, on the box, what inactive ingredients do you put
on the label now?

MR. LARSEN: We want the label to accurately reflect what is in the
product. Our member companies accurately list those or follow what is
allowed under the current regulations. So I think it is what is captured
in the product. We capture what is in the product.

MR. LEVIN: So if a product then changes, though, with the inactive
ingredients, then you are proposing no change in the NDC.

MR. LARSEN: Correct. We do not believe that the inactive‑ingredient
information should be required to obtain an NDC number.

MR. LEVIN: Okay.

MR. BERNSTEIN: Thank you very much.

Next up is Wes Siegner from Hyman, Phelps and McNamara.

MR. SIEGNER: Good afternoon. I am from Hyman, Phelps and McNamara. We
represent basically all of the different industry groups in one form or
another, individual clients mainly that are in the drug medical gas and
other industries here.

I am not here actually speaking on behalf of those entities today. I am
speaking on behalf of medical‑foods and dietary‑supplement interests so
I have to be a little bit careful about not making anybody upset with
me.

First, I wanted to start with some general comments. I see this proposed
rule as having huge ramifications. I better understand those today after
hearing other commenters speak about the specific aspects of the
implications for their industry.

I think we all agree that there needs to be a change to the current
system and shift away from a paper system to electronic system, but, in
my view, the proposal goes far, far beyond that and needs to be
rethought in many aspects.

In echoing Paul Larsen\'s comments about the OTC industry, I think that
this proposal effectively if‑‑it depends on how it is implemented but,
as I understand it might be implemented, would become a form of
premarket approval for OTC drugs. It would substantially, from a
practical effect, have huge delays on introducing OTC drugs to the
market.

I don\'t believe that some of the aspects of this system would be
authorized by the statute because of the implications for that industry.

The other aspect and getting more directly to the point that I am here
for today which is on behalf of medical foods and supplements, I am not
going to argue that they are appropriately governed under the NDC
system. However, the way the NDC system has been operating, as was
pointed out, for decades, dietary supplements and medical foods have
obtained NDC numbers and some of them depend on their marketing and some
companies depend on the NDC numbers for their business because of
reimbursement through those numbers.

Again, I am not saying that FDA ought to include those products within
something that is called the National Drug Code, but, in considering the
economic impacts of this rule, the agency, I believe, is required to
consider the impacts on reimbursement and public health and on small
businesses. These are all issues that need to be looked into and
considered. It may be necessary to set up a separate system for those
regulated categories.

In closing, anybody who is a small business and feels that they are
impacted by this, I recommend that you do get in touch with the Small
Business Administration. They are very interested in hearing from small
businesses and how regulations impact their day‑to‑day business.

Finally, I would recommend that the proposal be thoroughly reconsidered
and simplified to address the electronic tracking issue and to remove a
lot of the more far‑reaching impacts of the proposal.

Thank you.

MR. BERNSTEIN: Thank you, Wes.

Next up is Carolyn D. Jones of Advamed. I think, after Ms. Jones, we
will take the break a little bit late and extend the break to 2:30.

Was there a question?

MR. LEVIN: I have a question. Can you give me some more detail about, or
are you going to provide more detail about, the dietary supplements and
how they are affected by the‑‑

MR. SIEGNER: We will be filing more detailed comments but it is
effectively‑‑I can\'t tell you what proportion of the industry, but
there are doctors who prescribe supplements and medical foods regularly.
I think it is mainly through the state systems. They are on lists and
are reimbursed through state reimbursement programs and they rely on NDC
numbers effectively to do that.

I know that wasn\'t an intent of FDA\'s, but that is effectively how the
system is working for some of those products.

MR. LEVIN: Then with the proposed rule, the effects there?

MR. SIEGNER: The proposed rule specifically says that supplements were
not intended to be covered under the previous regime an won\'t be
included under this one. I guess it would be possible to call this
something other than the National Drug Code, and I am not necessarily
saying that I agree with FDA that putting an NDC number on a dietary
supplement is misbranding the product.

I think actually what some medical foods and supplements do is put the
number on without the NDC letters, again not something that FDA would
recommend of probably condone. But, again, that is how it is being done.

They need some kind of tracking system for reimbursement is the bottom
line.

MR. LEVIN: So if there was a way that they could provide the information
and do the NDC, that would be‑‑is that something you will address in
your comment?

MR. SIEGNER: I will cover that, but, yes; if there were some form,
either within this system or another system, for them to have NDC
numbers or NDC‑like numbers, that would resolve the problem.

MR. BERNSTEIN: Thank you.

MS. JONES: Good afternoon. I am Carolyn Jones. I am Associate V.P. in
the Technology and Regulatory Affairs Department at Advamed. Advamed is
a device trade association. I appreciate the opportunity today to
present the device industry perspective on issues raised by CDER\'s
changes to the NDC system, specifically, the proposed prohibitions
against the use of the NDC number on non‑drug products, which was just
raised.

Compelling health and safety issues necessitate the continued use of NDC
numbers on certain medical devices. While there are a number of medical
devices that use NDC numbers, the most striking use is in diabetes‑care
devices which include blood‑glucose meters, strips, lancing devices,
lancets, syringes, pin needles, insulin‑pump supplies and continuous
monitoring products. Millions of patients use these products daily.
Routinely dispensed through pharmacies, diabetes‑care devices are
uniquely identified with an NDC number consisting of an FDA‑issued NDC
number manufacturer\'s labeler code combined with a
manufacturer‑identified product code and package code.

In fact, NDC numbers have been used to identify blood‑glucose monitoring
devices for greater than 15 years and are an integral part of the
healthcare system involved with diabetes management.

NDC numbers have three key roles in diabetes care. They are used to
identify co‑pay, to process insurance claims and they are used in
patient safety and educational communications. We will discuss these
aspects of their use.

NDC numbers are the key identifier for third‑party reimbursement of
diabetes‑care products and other medical supplies throughout the United
States. The reimbursement process for diabetes‑care products is
identical to prescription drugs. A pharmacy enters the NDC system into
their pharmacy system to determine the coverage and copay for these
medical‑supply and diagnostic products.

The system communicates on line, real‑time, to health‑plan databases.
These NDC numbers are submitted to multiple databanks to make available
their on‑line network which is subscribed to by pharmacies, health
plans, again just like prescription drugs.

NDC numbers are also used by pharmacies and healthcare plans to identify
counterfeit product and prevent diversion. Elimination of the use of NDC
numbers will result in dramatically higher out‑of‑pocket costs to
patients for diabetes‑care products as it would eliminate the existing
system for coverage and co‑payments.

Customer end‑user complaints regarding new sudden impediments to
obtaining these products would increase. The target of these complaints
would range from retail pharmacies and other suppliers to state
insurance commissioners.

Because the NDC number is an integral component of the healthcare
system\'s use, access and processing of payments for diabetes‑care
products, prohibiting continued use of NDC numbers on these products
will result in confusion that will disrupt patient access to these
devices.

We believe that such a disruption would be costly both in terms of its
monetary impact and in terms of its undesired healthcare costs of
patients which may be caused by interruptions in self care and primarily
compliance with diabetes‑management responsibilities.

FDA\'s estimate of the financial impact may not take into account the
impact of non‑drug products using NDC numbers in terms of the financial
impact. Claims process for blood‑glucose monitors alone with the NDC
numbers are about \$2 billion annually. There are about 25 million
transactions per year.

NDC numbers are printed on a product labeling, price lists, contracts,
customer‑support materials, training materials and sales‑force
materials. This will require creation of new packaging and patient
materials, et cetera. Approximately \$350 million worth of existing
inventory would have to be destroyed and replaced.

Further, if FDA requires medical‑device manufacturers to move to a
different coding system, every pharmacy computer‑system health plan,
computer‑system and related on‑line network being used today would have
to be reprogrammed.

As such, an activity would require the coordination of multiple parties,
A move to a different coding system will require a lead time of five
years or greater.

I am being told to stop here. Do you want me to continue?

MR. BERNSTEIN: If you could wrap it up.

MS. JONES: Well, one of the issues that we are looking at is the
disruption in patient care. We understand that you would like to clean
up your system and not have non‑drug products on there, but what we
would ask is that these types of products be allowed to continue to use
the NDC code until such time as another system becomes available.

We understand that the device center is working on new device
identifier. However, that immediately will not solve the problem as the
associated systems and pharmacies and hospitals and so on will still
have to develop programs in order to be able to recognize those systems.

In addition to their other roles, as I said, these systems, NDC numbers,
are used by our manufacturers to decide where educational training and
the like is needed for this diabetes‑care equipment. So we will
supplement our comments here today, since we had such a sort time, with
written comments but we ask that you would allow the continued use until
such time there is another system in place for these products.

MR. BERNSTEIN: Thank you very much. Any follow‑up questions?

MR. LEVIN: I have a question. What about the health‑related item code?
How is that related to this?

MS. JONES: The health‑related items code‑‑now I tried to do some
investigation on the use of that. According to my investigation, there
are aspects in CDRH that are saying that they are no longer supporting
that system. So that system is currently not in place for the diabetes
care.

The other problem with switching to any other system is that, once FDA
comes up with a UDI, you want to the health‑related code or UPC system,
and they you are going to switch them to the UDI. We would just like to
be able to maintain one system so that customers will only have to deal
with one switch.

MR. LEVIN: Do you know anything about the health‑related item code?

MS. JONES: I do know that some companies in the past have received those
numbers and are using them. But, in the diabetes‑care arena, there are
not a large number of companies using the health‑related code.

MR. BERNSTEIN: Thank you very much. We will break until 2:40.

\[Break.\]

MR. BERNSTEIN: We have two speakers left for the afternoon session.
Then, after that, there is some time that has been allotted for open
discussion again. The first speaker up is Pat Distler from the
International Council for Commonality in Blood Bank Automation.

MS. DISTLER: Thank you. My name is Pat Distler. I am from ICCBBA. I
would like to suggest an alternative mechanism for labeling
cellular‑therapy products as opposed to using the NDC.

I would propose that we use something that is called ISBT 128. This is
an international standard for the transfer of information that is
associated with tissue, cellular‑therapy and blood products. It provides
for a globally unique donation identification numbering system,
standardized product codes, internationally known data structures for
barcoding and electronic data exchange.

One of the important features of ISBT 128 is that it is independent of
the delivery mechanism so whether linear barcodes are used, which is
what is common today, or two‑dimensional barcodes, RIFD or electronic
data interchange, it doesn\'t matter to the standard. This is a
mechanism for delivering information.

I do work for ICCBBA. We used to be the International Council for
Commonality in Blood Blank Automation. Since our focus has changed to
include tissues and cell therapy, ICCBBA has now become our name. We are
a not‑for‑profit organization based in Virginia. That is where our
corporation is. It develops and manages the ISBT 128 standard.

We do this by working with advisory groups, with experts in the field of
cellular therapy, tissues and blood. We also interact with the other
regulatory agencies and standard‑setting organizations that are involved
in these three fields.

ISBT 128, as a standard, has existed for ten years. It has been in use
for ten years. For cellular therapy, there are a number of U.S.
organizations using it today as well as a number of European
cellular‑therapy organizations. It is being used in cord banks
throughout the world. That is probably where it sees its greatest usage
is in cord banks.

It has been used in blood banks since 1997 in Europe. It is being
implemented today in the United States. There is a goal of May, 2008 for
all U.S. blood banks to be using ISBT 128. Tissue; U.K. is using it
currently in their National Health System and it is being evaluated for
use in the U.S. by the American Association of Tissue Banks.

As far as cellular therapy goes, major international standard‑setting
organizations have committed to using ISBT 128. The organizations that
have committed to this are listed on this slide.

Essentially, they represent all the major groups in North America and in
Europe; the AABB, the American Society of Apheresis, American Society
for Blood and Marrow Transplant, European Group for Blood and Marrow
Transplant, Foundation for Accreditation of Cellular Therapy,
International Society of Blood Transfusion, International Society for
Cell Therapy, ISCT Europe and the Joint Accreditation Committee for ISCT
and EMVT which is a European standard‑setting organization.

These groups have all committed a representative to work with ICCBBA in
further developing the standard. As I said, it has been in use for ten
years throughout the world, but, as we get more and more global, we are
finding that it needs refinement. So these groups got together. Each
sent a representative to do the work to ensure that this is universally
acceptable.

The group has defined terminology and label designs. They will be
publishing their two‑years‑worth of work for public comment in January
and I will also mention that an FDA liaison has been invited to all the
meetings.

The process by which ISBT 128 achieves international consensus is to
first identify the experts in the field who can help us define the
terms. Defining the terminology is very important and is the first step
after the group gets together. Then the information is encoded into the
computer‑understandable terminology. We trade common databases that then
can be used around the world and then we design the standardized label.

The common terminology is more difficult than it may seem. What to one
group, a DLI is a donor lymphocyte infusion or a donor leukocyte
infusion. That is just within the United States. Then there has to be a
consensus achieved worldwide.

Once the terms are selected, then they are defined and then these are
published for broad input. The big thing is getting everybody on the
same page so that everyone, whether they be in Shanghai, China or the
United States, has the same meaning to that particular term.

The information is then encoded into data structures, as one of the
speakers this morning alluded to. This is simply a string of characters
that has meaning to a computer, that relates back to a database. The
first two characters are a data identifier and so all the computer
systems know the type of data, whether that be an identification number
or a product code that is coming across. And then the actual data
content.

The database, then, that supports these numbers is found on the ICCBBA
website which is accessible to users as well as to regulatory and
standard‑setting organizations. These reference tables are maintained
and defined very carefully that if it is an S0005, that is a thawed HPC
from bone marrow. This is the same definition, then, that everybody
uses.

The last step is label design. This gets very, very particular. Exactly
where every barcode appears is defined to the millimeter of where it
needs to be. All the information that needs to be on the label is
defined as occurring in a given location. As you can see, at this point,
this is a very busy label.

That is actually one of our larger labels. It is a 4‑inch by 4‑inch
label. To put all the information that is important to both the
clinician and to the facility that collected the product, it takes up
most of the space. Now, cell‑therapy products are subject to the barcode
rule and you can see we are sort of running out of space on where we are
going to put another barcode.

Why is it important, then, to put every little bit of information on
exactly where those barcodes appear. It is because you can get a foreign
label, that this is an international standard. If you looked at this
label‑‑you probably can\'t read of a word of it. I certainly can\'t‑‑but
I do know what is going to be where.

Up here is the identification number of that, the lot number, if you
will. This is the AB/O and Rh. Down here is the product code and down
here is the expiration date.

If I scanned this into my computer system, my computer system is based
on the same database as the one in China. So it will interpret this
label into English for me allowing me to change the text into English
text. If I didn\'t have the computer, it doesn\'t matter because the
eye‑readable information directly below the barcode can be compared back
to that database and interpreted into English. So those codes would tell
me how to interpret that particular label.

We have different size labels, as I said. That is one of the larger one.
We can get 1‑inch by 3/4‑inch labels or, as is used in cord banking,
about 1 3/4‑inch by about 2‑inch labels. Again, it is specified exactly
what barcodes will appear and where they will appear depending on the
size of the label.

Why is international standardization so important? These are very
specific products. They are very carefully matched to the patient. The
National Marrow Donor Program in the United States tells me that 39
percent of their products cross an international border. They are either
coming in from another country or they are destined for another country.

These are unique products. Patients and donors are matched. When they
are collected, most of them are collected with a very, very specific
patient in mind. It is not a case of batch processing where there are
multiple products in a given lot number. It is a 1‑to‑1 relationship
most of the time.

A lot of information can be encoded using ISBT 128. One is the unique
identifier including the manufacturer or the registry name, the product
code, the donation type, AB/O and Rh which is unique in this group for
the importance of that information, whether or not the product is
biohazard‑‑in cell therapy is may be considered biohazard‑‑the
expiration date and time, collection date and time, special testing
results, a donor identifier.

A donor identifier may not be important in blood transfusion where this
system also works because that information is kept confidential. It is
confidential in cell therapy. However, a physician may need to know that
two products came from the same donor. So they may need to know not the
identity of the donor but a mechanism to assure that it is all from the
same donor. Also patient identification and date of birth.

What one of our identification numbers is is this. The first five
characters are a facility identification code followed by a year. The
facility identification code makes it unique worldwide. All countries,
anyone who participates in this system is assigned a facility I.D. code.

The year allows it to be unique for every 100 years. Then a serial
number followed by the flag characters. Flag characters are to identify
where that particular unit number was read from, where the barcode was
read. In the case of cellular therapy, you may be using the mother\'s
sample to test the cord blood. You can identify that that particular
sample came from the mother. It is related to that cord‑blood collection
but it came from the mother as opposed to the infant.

Then there is a check digit that can verify that the information, that
the entire string of numbers, was entered into the computer system
accurately if it was done through keyboard entry as opposed to scanning.

The facility identification number can also encode a donor registry.
There is a statute that requires that the donor center that collected
that be kept confidential because that can lead to the identification of
the donor. So you cannot identify where that was collected on the label.

Because of that, you have to be able to use the donor registry such as
the National Marrow Donor Registry in Minnesota to identify that
product. They, in turn, keep track of the collection facility.

The key to this, the database, as I have mentioned, is on the ICCBBA
website. It is accessible to users and regulatory agencies so that you
can identify exactly where that was collected or the registry that was
responsible for its collection.

Once assigned, the donation identification tracking number doesn\'t
change. This is important to cell therapy where being able to trace back
to the donor who gave that product is very, very important. The only
exception would be on a pooled product where multiple donors are pooled
into a single product.

The information, then, appears beneath the barcode. The W number, in
this case, identifies the center that collected that and that
information would appear in text immediately beneath it. If another
facility was involved in processing that further, that would appear
beneath that. With cell therapy, there are not multiple processors.
There tend to be one or two.

As I had mentioned, there is also room for putting the AB/O group, the
Rh, and whether or not it is considered a biohazard collection.

Moving on to ISBT 128 product codes, our products are defined in terms
of their cellular content, the anticoagulant, the storage and other
attributes. We do not include highly variable information. As I
mentioned, cell‑therapy products are very unique. They are
patient‑specific. \>From the time they are collected, they are intended
for one specific patient.

The active ingredients are the cells. The cells vary depending on who
the donor is, what the donor cell count was. So we don\'t know ahead of
time what that count is going to be. Indeed, because of the short dating
on these products, 24, 48 hours, often the products are being shipped
while we are still doing the laboratory work. That data will catch up
with the product before it is infused but it is not known at the time
the product is labeled.

To try to assign codes based on the actual count would create way to
many product codes for it to be manageable. The codes would have to be
requested on a very urgent basis and we would lose the benefit of
standardization. As I said, when that product from China comes in to the
United States, we can scan that. That is only if it is in the ICFA
database. If it is not there because it was assigned just as it was
being shipped, that product cannot be translated once it gets into the
United States.

We agree this information is useful and it does appear in eye‑readable
form, human‑readable form, on the label but is not encoded into the
computer code.

ICCBBA also reaches the patient\'s bedside because we do have data
structures for patient identification and patient birth date to further
identify the patient. Again because these products are meant for a
specific patient, it becomes important to tie it all the way to that
patient.

So the advantages that I see of ISBT 128 over the NDC number was, one,
it was designed for international use, overcoming language barriers. It
provides collection processing or donor‑registry I.D. The tracking
number does not change during subsequent processing making it better
traceable back to the donor.

It provides specific product information but it does not encode that
information which is highly variable. The product codes are, therefore,
able to be assigned in advance of need and be able to be circulated to
anyone who might receive those products. It delivers safety to the
patient bedside.

In summary, ISBT 128 is a very comprehensive system. It is designed
specifically for cellular‑therapy products. It is a proven system. It
has been in use for over ten years in C.T. laboratories, tissue banks
and blood banks worldwide. It is flexible enough to accommodate the
technological advances that are prevalent in cellular therapy and yet it
is structured enough to maintain global standardization.

Thank you.

MR. BERNSTEIN: Is there any follow up?

MS. RICHARDSON: Do you see the ISBT and NDC as mutually exclusive?

MS. DISTLER: No; and I believe the next speaker will be addressing that.
Perhaps not, but I don\'t think NDC number adds anything in the way of
patient safety. Yet it becomes a burden to the industry be we are not
using it now. The computer systems are not the pharmacies that will
handling this products. They are the blood banks and the transplantation
services.

So it is not going to provide anything beneficial to the user. We are
not using them today because we don\'t have licensed products.

MS. RICHARDSON: Would that be another data element that would go on the
label presumably?

MS. DISTLER: It detracts. I mean, it is a redundancy.

MS. RICHARDSON: I\'m sorry; I mean the license number.

AUDIENCE: Can you repeat the question?

MS. RICHARDSON: I first asked whether you thought that the use of ISBT
and the use of the NDC number or the placement of the NDC number on the
label were seen as being mutually exclusive.

MS. DISTLER: No. The problem is, though, the international. If we have
that extra barcode, it confuses. It has no purpose. No one is going to
be able to read it because the computer systems are not designed in the
laboratories to read the NDC number. So it may be useful to the FDA but
I don\'t see where it is going to help the users, other than adding yet
another thing to track.

It doesn\'t enhance patient safety and yet creates a burden for the
industry.

MS. RICHARDSON: You are speaking of the barcode, the NDC number barcode.

MS. DISTLER: Yes, because it is another element to put on that label and
sometimes it is a very small label.

MS. RICHARDSON: But what about the eye‑readable, human‑readable, NDC
number?

MS. DISTLER: I believe that will be addressed by the next speaker as far
as how the industry views having to apply for that number on an urgent
basis.

MR. LEVIN: I have a question, too. Who maintains the product codes?

MS. DISTLER: ICCBBA.

MR. LEVIN: The product codes‑‑give me an example of a product that you‑‑

MS. DISTLER: HVC cord blood.

MR. LEVIN: Then do you have any other components of that product that
are‑‑

MS. DISTLER: Yes; the temperature, the storage temperature, the
anticoagulant and the volume of that product. Then there can be
additional things. If it is CD4 enriched, that type of attribute or
modifier.

MR. LEVIN: That is added to it.

MS. DISTLER: Right. The exact count is what we don\'t have.

MR. BERNSTEIN: Thank you.

MS. DISTLER: Thank you.

MR. BERNSTEIN: Next up is Allene Carr‑Greer.

MS. CARR‑GREER: Good afternoon. My name is Allene Carr‑Greer. I work for
AABB. Today I am speaking on behalf of a number of organizations.

AABB, America\'s Blood Centers, American Red Cross, American Society for
Blood and Marrow Transplantation, Foundation for the Accreditation of
Cellular Therapy, International Society for Cellular Therapies and
National Marrow Donor Program wish to thank the Food and Drug
Administration for the opportunity to speak at today\'s meeting. We
support FDA\'s ongoing efforts to improve the safety of human drugs and
biologic products.

Today, we will address the proposed requirement to implement the
National Drug Code System for licensed human cells, tissues and cellular
and tissue‑based products, HCT/Ps, and, in particular, hematopoietic
progenitor cells collected from peripheral or cord blood and therapeutic
cells as described in this attachment to my statement.

I have a list of these products for you now. In particular, they are not
important to be called out today.

A requirement to implement the NDC system for these products will create
a duplicate tracking system that will not provide increased patient
safety but, in fact, may detract from the current level of patient
safety. Today, and in comments to the docket for this proposed rule that
are due by the end of January, we will provide justification for
requesting that these products be exempt from any requirement to use the
NDC system as outlined in 21 CFR Part 201, Subpart 201, and Part 207,
Subparts C and D.

The exemption is requested under proposed 21 CFR Part 201, the one up on
the slide right now. In that, it is where the FDA does have an exemption
lined out to the barcode requirement that, on their own initiative or in
response to a request, the exemption request must document why and, in
our case, an alternative regulatory program or method of product use
renders the barcode unnecessary for patient safety.

Again, we are speaking of the NDC number barcode.

It is our position that the NDC system is not a good fit for the
products identified in this request and that manufacturers of the
product and the companies receiving them for patient infusion and/or
transplantation are already implementing a system that was developed
specifically for them.

In support of our request for an exemption, we offer the following
comments today; that NDC is a square peg for a round hole. Due to the
biological nature of the products and the manufacturing process, a
manufacturer must have the ability to obtain NDC identifiers with
minutes of collection 24/7. Most of these products are infused within
hours of collection. Recipients are being prepped and irradiated‑‑this
would be total body irradiation‑‑while the products are being collected
and transported.

Products are generally en route to the consignee before all the data
that would be required to obtain the NDC number from FDA is even
available‑‑this is where Pat alluded to the specific product counts‑‑if
a part of listing and obtaining an NDC number is the amount of active
and/or inactive ingredient.

Currently this data is often faxed to arrive at the site of infusion or
transplantation by the time the product arrives. The integrity of the
product may be compromised if delayed due to a delay in obtaining an NDC
number. This could result in a less safe and efficacious product being
available for the patient.

The products do have variable contents as opposed to a drug that would
have a specified concentration of the active and inactive ingredients.
Thus, each HPC or TC would be a law unto itself and would require that
the manufacturer obtain different NDC numbers for each.

As stated above, the contents of each of these unique products that must
be available in order to obtain the NDC number is most often not
available before the product must be transported to the consignee.

HPCs and TCs are unique products. They are not mass‑produced in lots
like other drugs. Indeed, it is much more likely that each product is
collected for and tailored to a particular patient\'s needs.
Transcription and dispensing errors are very unlikely to occur due to
the small amount of product that is given and the limited number of
patients that would be receiving the treatment.

HPCs and TCs are not similar to other drugs covered by the NDC
requirements of this proposed rule or the rule on barcodes. In fact,
some of the comments from the compounding pharmacies and the allergenic
products this morning, I think we have some of the same issues.

Our products do not fit the NDC system, we believe, or the other
databases that are described throughout the proposed rule. The process
of having to obtain an NDC for each product and potentially each
processing step would impose an undue burden on the manufacturer with no
positive impact on patient safety.

DailyMed searches were alluded to in the proposed rule. DailyMed
searches could not be performed by a patient or patient advocate using
the NDC number because the patient and/or physician would not have the
NDC number until immediately prior to the infusion. There would be no
existing database of information for the product that could be searched
and thus no improvement to patient safety by better access to medication
information through the DailyMed initiative.

I selected this one because we are really not familiar with the
databases. But this is one that I could at least understand.

In general, cellular‑therapy products will have been infused before the
NDC number is populated in any federally maintained database. Adverse
reactions that occur with the patient after infusion are already
required to be reported to FDA via the MedWatch form FDA 3500A. This
form recognizes the use of a unique number for product identification
and does not require use of the NDC number.

Like some of the other speakers this morning, currently, these products,
while they are not licensed, they are actively being used to transfuse
and infuse worldwide and we don\'t participate in anything called the
structured product labeling. So that would be a whole other system that
we would have to become a part of.

The ISBT 128 standard, as Pat said, is international information. It
provides a globally unique product identifier that provides greater
benefits in patient safety than does an NDC. Currently, all major
standard‑setting organizations for cellular therapy have committed
themselves to the use of the ISBT 128 as an industry standard.

I won\'t go over again the group that Pat described other than to say
that, in the field of blood transfusion and transplantation, this ISBT
128 is being successfully used worldwide.

The use of the ISBT 128 would ensure that all imported and exported
products using this system could be read by the current computer
systems. This we think is critical to the position that we are taking
that this would require us to maintain a duplicative system that the NDC
could never replace the ISBT 128 because the NDC is meaningless
worldwide. For an establishment to send a product in, they, of course,
have to register and apparently have to become a part of this system in
the proposed rule but products going out, the NDC number is meaningless.

Facilities that manufacture and infuse HPCs and TCs are very familiar
with ISBT 128 because it is the labeling system used in hospital
laboratories and transfusion services as well as cellular‑therapy
processing laboratories. These laboratories do not use the NDC codes out
on the hospital floor. Perhaps those systems use NDC codes because they
get their products from the pharmacy.

The original manufacturer\'s information which is extremely vital not to
be lost in this trail will never be lost due to relabeling in the NDC
system. It is the lower left‑hand corner of this labeling patch‑‑it is
the lower level; it is either left or right‑‑for all the processing that
occurs will be reflected there but the original collector of the product
or the original registry that it was collected through would never be
lost and it is extremely important that that always be available to
everyone handling the products.

The NDC system requires the product to have a new facility or product
code assigned as it moves through collecting, processing and
distribution systems. The ISBT labeling system does not require
recoding. It will decrease transcription error rates and increase
trackability of the product.

In addition, in the ISBT system, the product code which must be changed
as the product is further processed, is not tied to the manufacturer
I.D. and can thus be changed without disturbing the trackability of the
product.

ISBT 128 labeling system contains more information than NDC and can
therefore afford a better tracking and tracing mechanism of this product
and facilitate quicker recalls. We are talking about recalls from
someone in the manufacturer stream, not an FDA recall. These products go
quickly.

When a problem is discovered post‑infusion, that is likely within days
or the first couple of weeks. It is up to the people in the
manufacturing stream to put out an alert to the recipient to that
physician, not the FDA. That happens months later, weeks, months, later,
if that ever happens.

This will also facilitate improvements in deviation management, the ISBT
language standard, reporting of adverse effects and outcome follow up.
Again, Pat outlined some of what the ISBT label provides for us and I
won\'t do that again although to say that it goes beyond what NDC would
provide and that it is globally unique and it will allow us to capture
additional attributes of cellular products.

There is a negative impact of implementing NDC system on these products.
Current cellular therapy processing and hospital laboratory computer
systems are not designed to accommodate the reading and incorporation of
NDC information. New computer systems will be needed by manufacturers
and hospitals. Minimally, the current systems will require major
upgrades. It is hard to say at this point exactly what the gaps are as
the system explained in the proposed rule is not operational.

While pharmacy computer systems may accommodate NDCs, cellular‑therapy
processing and hospital laboratory systems are unlikely to do so. Due to
the small package size of some products, the NDC label would have to be
attached to the product, not adhered to the product. Loss of
standardization will occur due to similar products varying only by minor
differences in cell counts or in active ingredients having different
product codes, even when manufactured by the same organization.

There may be a need to include an identifier to show multiple products
from the same donation. NDC cannot accommodate the various attributes of
cellular products. Once again, ISBT 128 has given consideration to the
very unique nature of the product and is addressing these requirements.

The requirement to implement NDCs is a de facto requirement to maintain
duplicate system for HPCs and TCs. The ISBT 128 labels are central to
the success of importing and exporting cellular‑therapy products. NDCs
do not contain the information necessary to document and track the
collection, the processing, distribution and infusion of these products.

Maintaining these duplicative systems is overly burdensome and adds
nothing to patient safety. It will result in resources being directed
away from processes and initiatives that can add to patient safety. NDC
makes no provision for encoding of the donor registry, as Pat alluded
to. The NMDP currently adheres to the confidentiality provisions of the
C.W. Bill Young Cell Transplantation Program to protect the identity of
donor centers and apheresis‑collection sites.

I think you all know that that happened much later in the subsequent
year if donors and recipients are to meet each other. It is confidential
up to that point.

FDA is proposing use of a system that has yet to be developed by the
agency. However, the cellular‑therapy community has been proactive over
the last years in assessing the needs for labeling HPC and TC products
in a manner to support accurate and complete tracking of the product
from the time of collection through various manufacturing processes,
during storage and transport to the consignee and ultimately to patient
infusion.

The ISBT standard was voluntarily selected for use by the
cellular‑therapy community prior to these proposals made by FDA. The
community has invested much time and money in developing the system as
well as implementation plans.

A careful review of the facts indicates that the use of the NDC
numbering system, in addition to the already existing ISBT 128 system,
does not offer any increase to patient safety. In fact, we would argue,
the implementing of NDC codes for HPCs and TCs will hinder the progress
of implementing the superior ISBT 128 information standard for these
products.

To require these products to also be labeled with NDCs would force
manufacturers to redirect what are very limited resources in order to
implement the new manufacturing process that offers no benefit to
patient safety. Again, we believe it would be overly burdensome.

NDC will not replace the need to use ISBT 128 and the requirement to
track using two different labeling systems will ultimately have a
negative impact on patient safety and will open the manufacturing
processes to many opportunities for error.

The organizations represented by this statement strongly support
initiatives that improve the safety of patients and donors and stand
ready to interact with FDA as necessary.

Today, we ask that FDA carefully consider patient‑safety issues when
evaluating the position put forth in this statement. We believe that the
National Drug Code system is not a viable option for improving the
safety of hematopoietic progenitor cells and therapeutic cells and that
they should be exempt from the requirements found in 21 CFR Part 201 and
207 for the use of the NDC system.

Thank you.

MR. BERNSTEIN: Thank you. Any follow up?

MS. RICHARDSON: I thought I heard you say that your analysis indicated
that manufacturers of these products would need to obtain an NDC number
for each individual product. Is that what you were implying?

MS. CARR‑GREER: Yes. As we read the language of the proposed rule, a
part of obtaining an NDC number and the listing components in order to
obtain that number is to give the‑‑I don\'t have a paper to quote, but
it is the amount of active and/or inactive ingredient. We don\'t know
that amount until the product is collected and is in the laboratory
being processed.

MS. RICHARDSON: So that is the determining factor in how you came to
that conclusion that a new NDC number would be necessary for every
individual product manufactured by every individual manufacturer of
these products.

MS. CARR‑GREER: Yes. Following the language in the proposed rule, that
is how‑‑we can\'t seem to make it mean anything else. The other issues
for us are, of course, just entering into a system that is going to be
very costly in addition to the systems that are already in use. That is
not a small thing.

MS. RICHARDSON: These products would also have lot numbers?

MS. CARR‑GREER: No; they do not.

MS. RICHARDSON: They have a unique identifier.

MS. CARR‑GREER: They have a unique identifier just like the blood
product.

MS. RICHARDSON: Thank you.

MR. BERNSTEIN: Any other follow up? Thank you. I would thank all the
speakers particularly for keeping with the time limits. We pretty much
stayed on time.

At this point, I am going to open it up for audience discussion again as
we did this morning. If anybody has any comments, feel free to take the
floor.

**Open Discussion**

MR. NEWMAN: Rick Newman. Just two questions. One is, for the information
that is going to be submitted to the dockets, do we have any idea how
soon after comments are submitted to the dockets they might be available
on the web?

MR. BERNSTEIN: I don\'t know. It varies. I am not exactly sure. It is
Dockets Management Branch, I think.

MR. NEWMAN: I have looked and to date there is nothing that is available
since the docket was opened. I just didn\'t know if that was a priority
or timing or may never be available on the web. If you could check it
out, that would be helpful.

The second is we didn\'t really discuss it but combination drug‑device
products‑‑I understand devices don\'t have the NDC number. But if you
have a combination product‑‑take a drug‑eluting stent. Would it have, on
that drug‑eluting stent package an NDC number for the drug? I don\'t
think it is addressed in the proposed rule. I just was wondering what
the group\'s thinking is on that.

MR. BERNSTEIN: I am not sure offhand. Does anybody‑‑

DR. GARDNER: I am not sure we can get into specifics like that.

MR. NEWMAN: Just in general. I am just talking combination devices in
general. Are you thinking that you would, on a combination device, have
an NDC number?

MR. LEVIN: Maybe you could express that as a comment. Do you think that
there should be?

MR. NEWMAN: Okay.

MR. LEVIN: I didn\'t mean to chase you away.

MS. CLARK: Lauren Clark. You may tell me the same thing but I haven\'t
heard any comments about NDCs on blood components. In the barcode
ruling, the blood products were exempt from barcode rule because of ISBT
128. However, with the proposed 207 Rule, nothing exempted at all. So we
are all left to question what was FDA\'s intent? Was that an oversight?

As somebody was mentioning over here, the way it is worded is that you
may be exempted from the barcode rule but the NDC eye‑readable number
would be expected to be on the blood‑product label and, I am assuming,
the blood‑bag manufacturer\'s label.

MS. RICHARDSON: There are what we call conforming amendments in the
proposed rule that are discussed. So they would be proposed changes to
607.

MS. CARR‑GREER: It does exempt the blood‑products, that conforming
amendment that she is talking about? I don\'t know if you can say that,
but I can.

MS. MORGAN: My name is Kay Morgan. I work for Gold Standard and I am
going to give you some of my past history. I spent six years at First
Databank populating their file. During that tenure, I populated the
Medispan database as well.

There seems to be a perception that you must have an NDC in order to
listed on a drug database and thereby be reimbursed through a
third‑party payer, use in the pharmacy system or be eligible for
Medicaid reimbursement.

Let me assure you that the First Databank, Medispan and Gold Standard
files have numbers UPCs and HRIs on that file. It is just most users
choose to name the field NDC rather than have the computer flip around
saying, NDC, UPC, HRI. So there are number fonts on there that are all
flagged as to what they are. But the fact that you don\'t have an NDC
will not preclude reimbursement by a state Medicaid or by any other
reimbursing firm.

So I just wanted to make sure everyone understands. You don\'t have to
have an NDC to be on the database or to be paid for by a payer.

MS. PALLA: Madeline Palla with the Animal Health Institute. First, I
just have a quick question. The questions that we submitted to the panel
previously in writing, are they going to be addressed today or should I
form it as a comment now?

MR. BERNSTEIN: We are going to submit those to the public docket. I am
glad you raised that because I was going to announce that and I forgot.
But those questions will be submitted to the public docket. If you want
to summarize now as comments, you can. We will respond to comments that
are submitted to the docket in the final rule.

MS. PALLA: For the most part, the questions that we had were addressed
in our comments but we look forward to your response in the federal
docket.

There is one additional thing that I did not mention. Under the Animal
Drug User Fee Act, we charged product fees based on the drug listing. It
is our understanding that a revision to an NDC number would cause
another product to be charged.

So, if a new NDC number needs to be assigned due to a change in a
product\'s packaging, a change in active ingredient or because the
current NDC number did not comply with the regulations as finalized,
then, under the current EDUFA fee system, AHI members would be charged
twice for the drug listing.

The EDUFA fee requirement applies to approved animal drug products that
have been listed or submitted for listing. It is also my understanding
that the Prescription Drug User Fee Act does not charge fees in the same
nature and we are just interested to know how EDUFA was taken into
consideration in the writing of this proposed rule and how that will be
handled in the collection of fees not to exceed what the CVM is allowed
to collect in a given fiscal year.

MR. BERNSTEIN: Thank you.

MS. PEREZ: I am Lauren Perez from Sandler Travis. I have a question
regarding, I guess particularly OTC products that are imported. In order
for a product to be deemed misbranded and not allowed into the country,
and there is an NDC number on the labeling that may not belong to the
person who exported or shipped the product but maybe to a person behind
that person in the supply chain, the repackager or relabeler or maybe
the original manufacturer, how is customs going to know it is
misbranded?

DR. GARDNER: Like I said, we are not here to answer all these questions
but to take comment as to what you think the implications might be of
what we are trying to propose. Part of the intent of the proposal is to
make sure we have accurate information by an NDC number on every product
that then can be used by customs and others to properly evaluate those
products.

MS. PEREZ: Thank you.

MS. HORN: Heidi Horn, Perrigo. I know that I have had more than my fair
share of microphone time today but I have one last comment. My comment
really relates to the proposed rule and is impact on a very large scope
of healthcare products. We are talking biologics, animal health,
prescription drugs, OTC drugs, gasses, with very large scope of
supply‑chain rules, manufacturers, repackagers, packager, labelers,
relabelers, with a very large number of objectives.

FDA listed ten objectives. Then we are also talking about drug billing,
insurance, Medicaid reimbursement. So I would strongly encourage FDA to
look at the very large scope of healthcare products with large scope of
supply‑chain rules with large scope of objectives and determine whether
one system can effectively manage all that.

Thank you.

MR. BERNSTEIN: Thank you. Any other comments? Questions?

MS. GARCIA: Carol Garcia, Alpharma Animal Health. Really, a housekeeping
question. The slides that were presented today, will they be available
at some point?

MR. BERNSTEIN: I think everything will be in the public docket, on
display in the public docket. That is my understanding. The transcript
of the meeting, the slides that were submitted to us prior to the
meeting, should all go into the public docket.

MS. GARCIA: Thank you.

**Closing Remarks**

MR. BERNSTEIN: It looks like there are no other comments. We really
appreciate everybody coming in today and taking the time, preparing the
comments. We were interested in what you had to say and we will consider
all these comments in devising the final rule.

I, again, appreciate the fact that everybody stuck to the time limits as
much as possible and kept us moving along and we have actually ended a
little bit early. So thank you all for coming and thank you for
submitting your comments.

\[Whereupon, at 3:28 p.m., the meeting was adjourned.\]

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