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Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

T F D
HE  OOD AND  RUG 

A  N
DMINISTRATION S  ATIONAL 

D C D
RUG  ODE  IRECTORY

Daniel R. Levinson

Inspector General 

August 2006

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Office of Inspector General 
http://oig.hhs.gov 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs, as well as the health and welfare of beneficiaries served by those programs. This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides all auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits examine 
the performance of HHS programs and/or its grantees and contractors in carrying out their 
respective responsibilities and are intended to provide independent assessments of HHS programs 
and operations. These assessments help reduce waste, abuse, and mismanagement and promote 
economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide HHS, 
Congress, and the public with timely, useful, and reliable information on significant issues. 
Specifically, these evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness in departmental programs.  To promote impact, the 
reports also present practical recommendations for improving program operations. 
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations of 
allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of OI lead to criminal convictions, administrative 
sanctions, or civil monetary penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to OIG, 
rendering advice and opinions on HHS programs and operations and providing all legal support 
in OIGs internal operations.  OCIG imposes program exclusions and civil monetary penalties on 
health care providers and litigates those actions within HHS.  OCIG also represents OIG in the 
global settlement of cases arising under the Civil False Claims Act, develops and monitors 
corporate integrity agreements, develops compliance program guidances, renders advisory 
opinions on OIG sanctions to the health care community, and issues fraud alerts and other 
industry guidance.  Report Template Version  = 03-01-05_rev.07  
  E X E C U T I V E   S U M M A R Y  

OBJECTIVE 
To determine (1) whether the Food and Drug Administrations (FDA) 
National Drug Code Directory (the Directory) is a complete and accurate 
listing of currently marketed prescription drug products; and (2) if the 
Directory is not complete or accurate, those factors that contribute to 
missing or obsolete product listings. 
BACKGROUND 
Among other requirements, the Drug Listing Act of 1972 requires drug 
firms to list with FDA prescription drug products manufactured, 
prepared, propagated, compounded, or processed by them for commercial 
distribution.  Drug products are uniquely identified and reported using a 
three-segment number, called the National Drug Code (NDC).  FDA 
assigns the first segment and drug firms assign the other two segments.  
As drug firms introduce a new drug product, or discontinue a product, 
they must report the complete NDC and associated information to FDA 
as part of the drug product listing process. 
A comprehensive list of drug products supports a variety of compliance 
activities and health initiatives at FDA and other Federal agencies.  
Examples of activities and initiatives include recalls of dangerous or 
tainted drugs, bioterrorism response, drug importation, and NDC 
barcoding of drug products. 
FDA inputs drug product information into a database known as the Drug 
Registration and Listing System (DRLS).  If a drug firm does not list its 
marketed drug products properly with FDA, they are deemed misbranded 
and FDA can take enforcement action against the drug firm. At the time 
of this study, every 3 months FDA extracted a database of all currently 
listed drug products from the DRLS, known as the Directory.  As of 
February 2005, the Directory included 123,856 prescription drug products 
listed with unique NDCs. 
FDA is currently pursuing changes to facilitate the submission of drug 
listing information and firm registration information by drug firms and 
to improve industry compliance with mandatory submission of this 
information to FDA, including provision of electronic submission 
capability. These changes warrant revision of existing regulations, and 
FDA is preparing to publish changes in a proposed rule. 
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E X E C U T I V E   S U M M A R Y

To identify prescription drug products that were missing from the 
Directory or that were still listed after they were discontinued, we 
compared the Directory with a private industry database, First 
DataBanks National Drug Data File PlusTM (First DataBank).  To 
confirm the status of the NDCs identified, we reviewed documents 
obtained from FDA and surveyed drug firms to determine the market 
status of the drug products.  Further, we examined FDAs processes for 
drug listing by interviewing FDA staff and reviewing procedural 
guidelines. The findings in this report reflect the Directory as of 
February 2005. 
FINDINGS 
The Directory is incomplete, with an estimated 9,187 prescription drug 
products missing, primarily due to insufficient reporting by drug 
firms. For 16 percent of missing NDCs, drug firms confirmed that they 
did not submit the required FDA forms for listing the drug products. In 
nearly all of the remaining cases in which drug firms claimed to have 
submitted listing forms, evidence of submission was not provided or the 
documentation provided was inconclusive.  However, in 9 percent of cases, 
firms claims to have submitted forms were corroborated by forms we 
found in FDAs files.  In these cases, FDA had failed to appropriately 
process the forms. 
An estimated 5,150 marketed drug product listings are pending, 
primarily because drug firms failed to submit complete listing 
information and because of submission errors. For 94 percent of the 
products in FDAs pending file, firms failed to provide the information 
required for listing.  Drug firms most frequent errors were failure to 
submit labels and insert materials and failure to provide manufacturer 
information for a product they were repackaging or distributing.   
The Directory is not accurate, with an estimated 34,257 drug products 
no longer on the market or listed in error, primarily because drug 
firms failed to report drugs taken off the market. Fifty-four percent of 
inaccurately listed drug products resulted from drug firms failure to 
submit forms to notify FDA that the drug was discontinued. An 
additional 18 percent resulted from firms assigning new NDCs to existing 
products and failing to discontinue the old ones.  The remaining 
inaccurately listed drug products were the result of drug firms going out 
of business and not reporting product status (13 percent), drug firms 
reported unawareness that they had listed the drug product and 
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consequent failure to update drug product status with FDA 
(13 percent), and FDA errors (3 percent).  
FDAs drug product listing process and lack of oversight contribute to 
deficiencies in the Directory. FDAs manual process for listing drug 
products provides opportunities for errors that may cause NDCs to be 
processed incompletely or incorrectly.  Procedural breakdowns are evident 
by the number of NDCs in the pending file or not listed even though the 
appropriate listing forms from drug firms were present in FDAs files. 
Additionally, FDA has neither finalized guidance documents for listing 
procedures nor established adequate avenues of communication, 
according to drug firms. Further, the Directory is not updated timely and 
is cumbersome for firms to use to verify their listings.  Inadequacies such 
as these may deter drug firms from listing drug products or following up 
to verify listings. 
Although FDA is aware that firms fail to submit drug products for listing, 
FDA staff reported to us that they do not actively pursue information 
about unlisted drug products. As of August 2005, FDA had not taken 
enforcement action against any drug firm solely on the basis of its failure 
to list drug products or update listings, although FDA has added listing 
failures to charges when taking action against firms for other violations. 
RECOMMENDATIONS 
FDA should: 
 Finalize guidance documents for submission of forms to list drug 
products, 
 Assume greater control over the assignment of NDCs, 
 Continue efforts to implement electronic submission of listing forms 
by drug firms, 
 Implement a mechanism to routinely identify omissions and

inaccuracies in the Directory, 

 Resolve the status of drug product listings in the pending file, 
 Enhance communication with drug firms, and 
 Identify and take appropriate action against drug firms that 
consistently fail to list drug products and update information. 
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AGENCY COMMENTS 
FDA concurred with each recommendation and requested access to our 
data files to follow up on identified problems.  In its response, FDA 
delineated a number of initiatives it expects will improve the Directorys 
completeness and accuracy, such as conversion to an electronic listing 
system for use by drug firms.  While FDA acknowledged the existence of 
many missing and inaccurately listed drug products, it stated that our 
results show a marked decrease in the percentage of missing drug 
products since 1990. FDA also expressed concerns with the studys 
methodology, which it believes potentially resulted in our overestimation 
of the extent of problems with the Directory. 
OFFICE OF INSPECTOR GENERAL RESPONSE 
We will provide access to our data files so that FDA can follow up on the 
problems identified in this report. 
In response to FDAs concerns with our study methodology, we believe 
that the methodology was appropriate for the purpose of identifying 
missing or inaccurate drug products and did not overestimate the extent 
of problems.  We acknowledge the apparent decline in the percentage of 
missing drug products, and we continue to recommend that FDA 
implement the actions described to address the remaining issues 
identified and ensure that the Directory is complete and accurate. 
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  T A B L E   O F   C O N T E N T S  

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 i 
I N T RO DUC T IO N  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

F I N D IN G S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

The Directory is incomplete due tomissing drug products. . . . . . .  7

Additional drug productlistings arepending  . . . . . . . . . . . . . . . . .  8

The Directory is inaccurate  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

FDA contributes to incompletenessand inaccuracies. . . . . . . . . .  11

R E C O MMEN D A T ION S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

  Agencycomments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16

Office of Inspector General response . . . . . . . . . . . . . . . . . . . . . . .  16

E N D NO T ES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20

A:  FDAs Current Drug Listing Process  . . . . . . . . . . . . . . . . . . . .  20

B:  DetailedMethodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

C:  Confidence Intervals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27

D:  AgencyComments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

A C K NO WL E D G M E N T S  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
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OBJECTIVE 
To determine (1) whether the Food and Drug Administrations (FDA) 
National Drug Code Directory (the Directory) is a complete and 
accurate listing of currently marketed prescription drug products; and 
(2) if the Directory is not complete or accurate, those factors that 
contribute to missing or obsolete product listings. 
BACKGROUND 
The Drug Listing Act of 1972 (the Act) requires drug firms engaged in 
manufacturing, preparation, propagation, compounding, or processing 
drugs to report all drug products to FDA.1 Pursuant to the Act and 
implementing regulations, the process of new drug product reporting, 
known as listing, is to occur within 5 days of the establishments first 
entry into one of these operations and be updated thereafter twice each 
year.2  In addition, certain changes to drug product information, e.g., 
discontination, must be reported to FDA twice yearly.3, 4 
Mandatory listing by drug firms promotes FDAs mission to protect the 
public by ensuring the safety, efficacy, and security of human drug 
products.  Drug products that are not properly listed are considered 
misbranded and the firms that are responsible may be subject to 
criminal or regulatory action.5  According to FDA officials, as of August 
2005, FDA had not taken any such action against a firm solely on the 
basis of its failure to list drug products, although it has added listing 
failures to charges when taking action against firms for other 
violations. 
A comprehensive list of drug products supports a variety of compliance 
activities and health initiatives at FDA and other Federal agencies,  
such as recalls of dangerous or tainted drugs, bioterrorism response, 
and barcoding certain drugs with drug product universal identifiers, 
known as National Drug Codes (NDC). 6,7 
NDCs uniquely identify each drug product.  They were originally 
developed for outpatient drug reimbursement under Medicare, but 
were later used for other purposes. Currently, for example, the 
Centers for Medicare & Medicaid Services uses NDCs to assess 
compliance with program requirements for participation in the 
Medicaid Drug Reimbursement and Rebate programs. NDC 
information is also vital for importation of drug products. Border 
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agents routinely verify drug product NDCs with FDA before allowing 
drugs to enter the United States.   
National Drug Code Directory 
FDA maintains a publicly accessible database of drug manufacturers 
and drug products called the Directory.  As of February 2005, the 
Directory contained 123,856 drug product listings, each with a unique 
NDC.  The Directory reflects FDAs knowledge of drug products in 
commercial distribution.  The Directory is supposed to include every 
drug firm that markets prescription, over-the-counter and homeopathic 
drugs, and an NDC for every such product currently on the market. 
The Directory is FDAs inventory of drug facilities and commercially 
marketed drug products; therefore, it plays a significant role in 
protecting public health.  FDA and others use information in the 
Directory when they perform many functions, such as inspecting drug 
facilities, identifying ingredients for marketed drug products, 
managing drug recalls and withdrawals, dealing with drug shortages, 
verifying drug imports, identifying medication errors, monitoring 
adverse drug experiences, and evaluating drug impacts of natural 
disasters and terrorist threats.  In addition, NDCs are almost 
universally used to identify drug products in pharmaceutical billing 
and reimbursement systems and in drug information resources. 
FDAs system for collecting and maintaining drug product information 
from firms is known as the Drug Registration and Listing System 
(DRLS). Drug firms submit their drug products NDC information to 
FDA using Forms FDA-2657 or FDA-2658.8, 9  Once the forms are 
received, data are entered into the DRLS by staff contracted to perform 
this function. During calendar year 2004, 15 full-time contract 
employees processed 19,601 forms from drug firms. A flowchart 
depicting FDAs drug listing process is included in Appendix A. 
A drug product and its associated NDC may reside in one of three 
databases within the DRLS:  
 	 The DRLS Listed Drug Filecurrently marketed drug products 
that were successfully listed; this file is the source of the 
Directory and, at the time of this study, was extracted every 
3 months. 
 	 The DRLS Discontinued Drug Filediscontinued drug products 
that were listed but are no longer on the market as reported by 
firms or known to FDA. 
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 	 The DRLS Pending Drug Filedrug products for which the 
listing process is not complete.10 
An NDC consists of three numeric segments.  The first segment is a 
labeler code, the second segment is a product code, and the final 
segment is a package code.11  While FDA is ultimately responsible for 
assigning NDCs, it currently only assigns the labeler code segment. 
The labeler code is the unique identifier for each drug firm and is 
assigned when the firm registers with FDA.12  Drug firms assign the 
product and package code segments of the NDCs.  The product code 
identifies the strength, dosage form, and formulation of the particular 
product, and the package code identifies the size and type of package. 
Combining these segments produces a 10-digit number. 13 
Drug Industry Product Databases 
The drug industry has developed several commercially available 
databases listing drug products and associated NDCs.  These 
databases exist primarily to provide users with pricing and use 
information. One of the more prominent and frequently used 
commercially available databases is First DataBanks National Drug 
Data File PlusTM, hereafter referred to as First Databank, which is 
used by both private industry and Government agencies. 14  As with 
FDAs Directory, First Databank relies almost exclusively upon drug 
firms to report drug products and their associated NDCs.  In contrast 
to required reporting to FDA, firms voluntarily report to First 
DataBank; however, First DataBank staff report that they actively 
pursue information and updates from drug firms.15 
Past Study of FDAs Drug Databases 
A 1991 study by the Office of Inspector General (OIG), The FDA 
Prescription Drug File, identified problems with the listing process 
and inadequacies in the DRLS data files.16 OIG found that the 
Directory was neither complete nor totally accurate.  An estimated 
8,000 products were on the market but not listed and an estimated 
1,400 products were inaccurately listed.  The OIG report attributed 
these shortcomings primarily to firms failures to supply the 
prerequisite information for listing. Other deficiencies included lack of 
quality control in DRLS processes, limited procedural guidelines, 
inadequate systems software, uncertain legal authority, and unclear 
data requirements for the industry. Recommendations to FDA 
included clarifying data requirements for industry, developing internal 
quality control procedures for manual data processing, and ensuring 
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effective use of a new ORACLE data system developed to support the 
DRLS. 
In response to these recommendations, FDA took steps to strengthen 
the drug product listing process and to streamline data entry 
procedures.  For example, FDA added automated error checking to the 
ORACLE data system and implemented procedures to barcode 
incoming documents to better track listing information received from 
drug firms.  Further, FDA developed a clear set of internal guidelines 
for processing forms and information.  According to FDA officials, 
associated staffing levels were increased by 52 percent during the next 
7 years.  However, in subsequent years, the staffing levels have 
dropped to below pre-1991 levels.  In acknowledging the reduction, 
FDA officials provided no explanation for the decline.  The DRLS 
database has expanded from 39,000 prescription drug products in 1990 
to more than 120,000 products in 2005 and the number of listing forms 
processed each year has more than doubled. 
FDAs Proposed Changes to the Listing Process 
Although changes in the early 1990s improved the FDA listing process, 
additional improvements are currently being pursued. For example, 
FDA is pursuing implementation of electronic submissions of listing 
information by firms.  In 2001, FDA pilot-tested the feasibility of 
electronic submission of information from firms for listing NDCs and 
providing updates. According to FDA officials, the pilot project 
provided valuable lessons as FDA moves toward full implementation.  
Implementation timeframes were uncertain as of January 2006 when 
OIG discussed the status of this initiative with FDA.  Regulatory 
changes necessary to implement the system are underway with the 
expectation that the system will take a few years to become fully 
operational.  
METHODOLOGY 
This study compared NDC listings for prescription drug products in 
the Directory to NDCs in First DataBank as of February 2005.  First 
DataBank was chosen as the basis for the comparison because it is 
widely used by both private industry and Government agencies and 
because it was used for the 1991 OIG study.  The comparison of the 
NDCs in the Directory to those in First DataBank served to identify 
both currently marketed prescription drug products not listed with 
FDA and discontinued prescription drug products inaccurately listed 
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with FDA as still on the market.  We contacted drug firms to verify the 
market status of a random sample of missing and possibly 
discontinued drug products.  Further, we obtained drug firms insights 
into and experiences with the listing process through a survey. We 
performed onsite case reviews and observations at FDA to enhance our 
knowledge of the listing process. (See Appendix B for a detailed 
description of the methodology.)   
This study focused on drug products falling into the following three 
mutually exclusive groups as of February 2005, after we matched FDA 
and First DataBank databases:   
 	 Group 1:  Missing NDCsNDCs that were in First Databank, 
but were not in the Directory or the FDA pending file;   
 	 Group 2:  Pending NDCsNDCs that were in FDAs pending 
file and in First DataBank, but not in the Directory; and 
 	 Group 3:  Discontinued NDCsNDCs that were in the 
Directory, but were not in First DataBank.  
To adjust match results to exclude NDCs for drug products no longer 
on the market, we randomly selected samples from each group to verify 
with the drug firms. 
A simple random sample of 100 NDCs was taken from the 13,163 
NDCs in Group 1 and a simple random sample of 100 NDCs was taken 
from the 5,479 NDCs in Group 2, to equal 200 NDCs that were in First 
DataBank and not listed in the Directory.  For these samples, we 
examined FDA files to determine whether FDA had received the 
required Form FDA-2657/2658 to list the new drug products or to 
change information or status for drug products already listed.  For the 
pending NDCs (Group 2), we requested information from FDA to 
explain why the drug product listings were pending.  Additionally, we 
sent information requests to drug firms to determine whether the 
products corresponding to each NDC were on the market and whether 
drug firms submitted the necessary forms to list them.  We asked drug 
firms to provide documentation of their submissions, i.e., a copy of the 
Form FDA-2657/2658 they had submitted. 
For Group 3, we selected a simple random sample of 200 from the 
94,682 NDCs to determine the proportion of drugs in the Directory that 
were discontinued or listed in error.  We examined FDA files to 
determine whether a Form FDA-2657/2658 had been submitted to 
discontinue the listing. We sent information requests to the drug firms 
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to find out whether the drug products were on the market and, if not, 
whether the drug firms had submitted the necessary forms to 
discontinue the listing (again requesting copies of Forms 
FDA-2657/2658 submitted). 
We calculated estimates by generalizing the results from the sample 
findings to the respective populations based on a 95-percent confidence 
interval. Each confidence interval estimated the range of values that 
was likely to include the population parameter.  Upper and lower 
boundaries of the confidence limits are reported in Appendix C. 
When we had questions about information in FDA files from any of the 
three groups, we contacted FDA staff. They provided clarification or 
additional information as needed. We also contacted drug firms when 
we needed clarification or further information. 
Data Limitations 
Because drug firms are not required to list with First DataBank, that 
database does not include all drug products from all drug firms. 
Consequently, our analyses underestimate the number of NDCs 
missing from the Directory.  The extent of underestimation is 
unknown. 
Quality Standards 
This study was conducted in accordance with the Quality Standards 
for Inspections issued by the Presidents Council on Integrity and 
Efficiency and the Executive Council on Integrity and Efficiency. 
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  F I N D I N G S

The Directory is incomplete, with an  The Directory, consisting of 123,856 
estimated 9,187 prescription drug  drug products as of February 2005, is 
missing an estimated 9,187 drug 
products missing, primarily due to 
products that are listed in First 
insufficient reporting by drug firms 
DataBank. (See Appendix C for 
confidence intervals for estimates.)  These drug products were on the 
market and listed in First DataBank, but unlisted with FDA.  We 
found that 28 percent of the 47,814 drug products listed in First 
DataBank were not listed with FDA.  This finding confirms that firms 
do not always list drug products with FDA, even when they list them 
with First DataBank.     
The timing of the submissions to both First DataBank and the 
Directory does not appear to have caused the discrepancy.  Because 
drug firms are required to list a drug product with FDA within 5 days 
of first manufacturing, distributing, or repackaging drugs and to 
update this information twice each year thereafter, a drug product 
should rarely be listed with a private database before it is listed with 
FDA. We checked the length of time drug products were listed in First 
DataBank and found that more than three-fourths of the drug products 
missing from the Directory were listed with First DataBank for longer 
than 1 year, suggesting that they had been on the market for at least 
that long without being reported to FDA.   
Missing drug products primarily result from firms failure to submit 
required forms 
For an estimated 16 percent of the missing drug products that are 
currently on the market, drug firms confirmed that they did not submit 
the appropriate listing forms (see Table 1).  Drug firms gave no 
explanation for not submitting forms.  For 28 percent of drug products, 
drug firms reported submitting forms to FDA; however, they were unable 
to provide evidence of the submission and no evidence was found in FDAs 
files. Drug firms reported submitting listings for 46 percent of missing 
drug products and provided evidence; however, the documentation was 
insufficient or questionable and, consequently, we were unable to 
substantiate the claims.  For example, some drug product listings were 
submitted to FDA after our request for data, which was reflected in the 
documentation submitted to us by the firms.  However, we did find 
evidence of listing in FDA files for 9 percent of unlisted products that are 
currently on the market. 
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Table 1:  Reasons Drug Products Were Missing From the Directory 
95% 
Estimated  Confidence 
Reason  Percentage  Interval 
Firm reported its product was listed and provided 
evidence of submission, but the evidence was 
questionable.  46.3   12.3 
Firm reported its product was listed, but did not provide 
evidence of submission and no evidence was found in 
FDA files.  28.4   11.1 
Firm reported it did not list its drug product.  16.4   9.1 
Firm reported its product was listed and we found 
corroborating evidence of submission in FDA files.  9.0   5.6 
Source:  OIG analysis of a sample of missing NDCs for products that are currently on the market.   
Some drug firms have never listed their products with FDA even though 
they have drug products currently on the market  
Specifically, we found that 23 drug firms that registered with FDA and 
have been assigned a labeler code (the portion of the NDC assigned by 
FDA to designate the firm) had listed drug products in First DataBank 
but never with FDA. In an extreme case, one firm has listed 1,932 
drug products in First DataBank for at least 8 years but has never 
listed any products with FDA.  We also found that nine firms with 
products listed in First DataBank had labeler codes that had not been 
assigned by FDA. 
Drug products in pending status 
An estimated 5,150 marketed drug 
are not in the Directory even 
product listings are pending, primarily 
though they may be on the market. 
because drug firms failed to submit  We found that 94 percent of 
complete listing information and  pending prescription drug products 
because of submission errors  (5,150) at FDA that are listed with 
First DataBank are currently on 
the market. This group of drugs should be in the Directory. The 
primary reasons these drug products were pending were that the drug 
firms had failed to provide all required information and had made 
errors in completing the forms.  Table 2 shows all the reasons drug 
product listings were placed in pending status.  Many drug products 
were in the pending file for multiple reasons. 
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Table 2:  Reasons Drug Product Listings Were in the DRLS Pending File 
95% 
Percentage  Confidence 
Reason  of NDCs*  Interval 
Firm failed to submit required label and/or insert 
material.  40.4   10.0 
Repackager/distributer failed to provide complete 
and/or accurate manufacturer information on the listing 
form.  39.4   10.0 
Manufacturer had not registered and listed the product 
with FDA when the repackager/distributor submitted its 
listing.  34.0   9.6 
Error in form completion or missing information, other 
than manufacturer information and label.  11.7   6.6 
Unknown.  2.1  - 1.8 / +5.4** 
*Totals more than 100 percent because some drug product listings were pending for more than 
one reason. 
**To adjust for invalid results because of the small number, this confidence interval was calculated 
with an exact method based on the binomial distribution. 
Source:  OIG analysis of a sample of pending drug products on the market.  Reasons were provided by FDA. 
Drug firms failure to submit the required labels and/or inserts was the 
reason 40 percent of NDCs remained in the DRLS pending file.  Drug 
firms that repackage and distribute drugs manufactured by other 
companies are required to assign their own NDCs to the repackaged 
products and submit Form FDA-2657/2658 with information about the 
manufacturer and manufacturing site.  If the drug products original 
manufacturer has not yet listed the product with FDA, FDA will not 
allow the repackager to list the repackaged product and sends the 
submission back to the repackager. Many repackagers reported that 
making sure their submission of Form FDA-2657/2658 arrives at FDA 
after the manufacturer has listed the original product and obtaining 
the requisite information, e.g., site registration number, from these 
manufacturers is problematic.  Repackagers/distributors failure to 
provide complete and accurate information about the manufacturer 
was the reason 39 percent of the drug products were in the DRLS 
pending file.  An additional 34 percent were pending because the 
manufacturer had not listed the original product with FDA.  Other 
errors in submissions accounted for only 12 percent of pending NDCs.  
The reason for pending status was unknown for 2 percent of drug 
products sampled. 
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F I N D I N G S  
Lack of followup by drug firms with FDA to verify that drugs have 
been listed contributes to drug product listings remaining in the DRLS 
pending file. Many drug product listings have been in a pending status 
for years, averaging 26 months as of February 2005.  In explaining the 
status of the pending listings, FDA stated that from 2001 to 2005 it 
discontinued its follow-up process of alerting firms of deficiencies in 
their listing submissions.  As a result, drug firms only discovered 
problems with listings after they initiated contact with FDA; after they 
used FDAs Directory to determine the status of listings; or after a 
problem arose because a drug product was not in the Directory, e.g., 
products held at the border because U.S. Customs was unable to verify 
the listing. Only 41 percent of drug firms surveyed reported routinely 
verifying drug product listings. 
An estimated 36 percent of drug 
The Directory is not accurate, with an estimated 
products that were in the Directory 
34,257 drug products no longer on the market or 
and not in First DataBank were no 
listed in error, primarily because to drug firms  longer on the market or were listed 
failed to report drugs taken off the market  in error. When products are 
removed from the market, drug firms 
are required to notify FDA that their product has been discontinued. 
FDA will remove the drug product from the Directory.  Additionally, 
when firms assign a new NDC to an existing product they are required 
to notify FDA in accordance with FDA regulations.17  Drug firms 
accounted for most inaccuracies by failing to discontinue drug product 
listings when they removed products from the market, assigned new 
NDCs, or went out of business.  Fifty-four percent of drug products 
that were no longer on the market were still listed as active because 
drug firms failed to submit appropriate forms to notify FDA that the 
drugs were discontinued (see Table 3).  Drug firms assigned new NDCs 
to 18 percent of the drugs in this group and failed to discontinue the 
old NDC listings. Drug firms no longer in business accounted for an 
additional 12.5 percent of drug product listings that should have been 
discontinued. For 12.5 percent of drug products that should not have 
been in the Directory, the firms reported they had never listed them, 
although evidence found in FDAs files suggests otherwise.  FDA 
errors, e.g., products listed inappropriately by FDA as prescription 
drugs, accounted for less than 3 percent of the drug products in our 
sample. 
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F I N D I N G S  

Table 3:  Reasons Drugs No Longer on the Market Remained in the 
Directory 
95% 
Percentage  Confidence 
Reason*  of NDCs  Interval 
Firm failed to notify FDA when the drug was taken off 
the market.  54.2   11.8 
Firm assigned a new NDC to the product and failed to 
notify FDA it had discontinued the old one.  18.1   9.1 
Firm closed or went out of business and failed to notify 
FDA.  12.5   7.8 
Firm was unaware that the NDC was ever listed.  12.5   7.8 
FDA error.  2.8  -2.5 / +6.9* 
*To adjust for invalid results because of the small number, this confidence interval was calculated 
with an exact method based on the binomial distribution. 
Source:  OIG analysis of a sample of NDCs no longer on the market. 
Listing drug products and reporting NDCs 
FDAs internal drug product listing 
to FDA is a manual process in which drug 
process and lack of oversight 
firms submit paper forms and data entry 
contribute to deficiencies in the  clerks manually enter the information into 
Directory  the computer. As with any manual process, 
substantial procedural controls are required 
to ensure that paperwork is not misplaced and data are entered timely 
and correctly.  While FDAs listing procedures were strengthened 
following the 1991 OIG report, the listing process remains an issue.  
The thousands of pending drug product listings and failed postings at 
FDA indicate that procedural breakdowns at FDA are occurring and 
oversight is deficient.  
Submission of information on paper forms followed by manual data entry 
sometimes contributes to procedural breakdowns 
FDAs failure to properly process submitted forms caused 9 percent of 
drug products that were on the market to remain unlisted. In these 
cases, we found documentation in FDA files that the proper documents 
were submitted.  Additionally, FDA data entry errors caused nearly  
3 percent of drug products that should not have been in the listing to 
appear there.  Specifically, drug product listings that should have been 
placed in the FDA pending file were filed away and not addressed, and 
NDCs for drug products that are treated as prescription drugs in some 
States were not listed. 
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F I N D I N G
 S  
FDA has yet to finalize guidance for listing drug products  
Although FDAs guidance for listing products is readily accessible on 

the Internet, the guidance remains in draft form.18  The guidance 

document, Guidance for Industry: Forms for Registration of 

Producers of Drugs and Listing of Drugs in Commercial Distribution, 

which was posted in 2001, may confuse drug firms trying to locate 

current guidelines because the documents cover states this guidance 

document is being distributed for comment purposes only. Moreover, 

although we found that the draft document reflects the current 

process, 25 percent of drug firms we surveyed claim FDAs guidance is 

inadequate. 

Avenues of communication are lacking, according to drug firms   
To contact FDA staff, drug firms have the option of using mail, 
telephone, or e-mail.  While several surveyed drug firms commented 
positively on the quality of interactions with FDA staff, stating that 
FDA staff are helpful, willing to explain, competent, and courteous, 
many reported that contacting FDA is problematic.  Survey responses 
suggested that either drug firms are unaware of available options for 
communicating with FDA, or FDA staff response may not be timely. 
Drug firms reported that when they use the telephone number 
provided by FDA, they reach a recording requesting that they leave a 
message and someone will respond.  Although FDA staff may respond 
within a 24-hour period as publicized, some surveyed drug firms report 
that this callback process frequently leads to telephone tag, 
lengthening the time to resolve an issue. 
The Directory is not updated timely and is cumbersome for firms to use to 
verify their listings   
As previously mentioned, drug firms lack of followup to ensure 
successful listing with FDA contributes to drug product listings 
remaining in FDAs pending file.  Surveyed firms said that when they 
do check with FDA to verify a listing, they frequently check FDAs Web 
site, which gives access to the Directory.  While the Directory is readily 
accessible, several firms raised concerns that it is updated too 
infrequently, i.e., once every 3 months.  Another concern with Web site 
verification is that NDCs can only be looked up one at a time; thus, 
checking the firms listings becomes increasingly cumbersome as the 
number of listings rises.  Some drug firms call FDA to verify individual 
drug listings or to request printouts they can review; however, this 
contact can be time-consuming to both FDA and drug firm staff.   
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F I N D I N G S  
FDA provides limited oversight and enforcement to ensure that drug firms 
list drug products and provide status updates 
In 1991, OIG reported that incompleteness and inaccuracies in the 
Directory were primarily attributable to drug firms failure to supply 
requisite information for listing.  Despite this finding, FDA staff 
reported to us that they still do not actively monitor firms to identify 
unlisted drug products or listings of drug products no longer on the 
market. They do not currently match the Directory with other drug 
product listing data sources. Failure to monitor firms reporting 
results in some drug firms completely ignoring listing requirements.  
As mentioned earlier, one such firm has nearly 2,000 drug products in 
First DataBank but none in the Directory. As of August 2005, FDA 
staff reported to us that no regulatory action has been taken thus far 
against any drug firm solely on the basis of its failure to list drug 
products or provide updates, although FDA has added listing failures 
to charges when taking action against firms for other violations. 
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  R E C O M M E N D A T I O N S  

The results of this review demonstrate that the Directory is neither 
complete nor accurate. We identified thousands of missing drug 
products that firms should have listed with FDA and many more drug 
products inaccurately listed as still on the market.  Because drug 
product listing with FDA is not optional, most omissions and 
inaccuracies are directly related to drug firms failure to meet Federal 
requirements to list their products.  
The failure of firms to list drug products with FDA limits the 
usefulness of the Directory to all who rely on it for timely information 
about prescription drugs currently on the market.  For example, FDAs 
initiative to prevent medication errors by requiring manufacturers to 
place NDC barcodes on certain drug products may in turn depend on 
FDA providing a complete listing of NDCs.  The current Directory 
would inhibit FDAs ability to do this. 
FDA should address issues with the drug product listing process to 
ultimately create a more complete, accurate, and reliable Directory. 
Specifically, we recommend that FDA: 
Finalize Guidance Documents for Submission of Forms To List Drug 
Products   
Because electronic submission of listings will take some time to become 
operational, FDA should finalize the current draft guidance issued in 
2001 and referenced on its Web site.  Additionally, any changes to the 
process based on this reports findings and any action by FDA in 
response to this report should be included in the finalized document. 
A review of common submission errors may be helpful for suggesting 
enhancements to the guidance document. 
Assume Greater Control Over the Assignment of NDCs 
Were FDA to take more control of the NDC assignment process, e.g., by 
assigning all parts of NDCs, it might largely prevent NDCs associated 
with drug products on the market from being omitted from the DRLS 
and, consequently, the Directory. 
Continue Efforts To Implement Electronic Submission of Listing 
Forms by Firms 
Electronic filing of drug registration and listing information will facilitate 
the timely exchange of information between FDA and firms.  The current 
system, in which drug firms submit Form FDA-2657/2658 and clerks 
manually enter the information into the system, is labor intensive and 
time consuming both for drug firms and for FDA.  An electronic process 
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R E C O M M E N D A T I O N S  
would allow FDA to redirect resources toward other areas of the listing 
process such as communication with firms. 
Implement a Mechanism To Routinely Identify Drug Product 
Omissions and Inaccuracies in the DRLS and, Subsequently, the 
Directory 
FDA could routinely compare the Directory with other Government 
databases and commercial databases to identify unlisted or discontinued 
drug products.  Although private industry databases, because of their 
voluntary nature, will never include all drug products, they provide a 
readily accessible means of identifying a significant portion of unlisted or 
discontinued drug products. 
Resolve the Status of Drug Product Listings in the DRLS Pending 
File 
The current procedure for following up on deficient submissions should 
prevent further accumulation in the pending file.  However, previous 
submissions already in the pending file should be resolved with firms and 
either listed or dropped. 
Enhance Communication With Drug Firms To Facilitate Accurate 
and Complete Reporting of Drug Product Listings 
FDA should expand firms ability to verify submitted drug product 
listings. Drug firms we surveyed commented frequently on the 
difficulty they experience when verifying drug listings.  To address 
their concerns, FDA could improve the Web site reporting function to 
allow drug firms to easily generate a complete listing of their drug 
product NDCs so it could update the Directory more frequently. 
FDA could also provide more timely assistance options for drug firms 
with questions about submitting data or other problems.  Options 
could include a customer service hotline or a quick-response e-mail 
address. 
Identify and Take Appropriate Action Against Drug Firms That 
Consistently Fail To List Drug Products and Update Information 
Many drug firms fail to comply with listing regulations.  The lack of 
enforcement actions by FDA against drug firms that consistently do 
not comply provides little incentive for drug firms to complete and 
submit forms. 
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AGENCY COMMENTS 
FDA concurred with each recommendation and requested access to our 
data files to follow up on identified problems.  In its response, FDA 
listed a number of initiatives it expects will improve the Directorys 
completeness and accuracy, such as its planned implementation of an 
electronic listing system for use by drug firms.  While FDA 
acknowledged the problem of missing and inaccurately listed drug 
products in its DRLS, it stated that our results show a marked decline 
in the extent of drug product listing problems.  The ratio of missing 
drug products to the overall number of drug products in the Directory 
is much lower than reported in our 1990 report. 
In its comments, FDA also stated that our study methodology 
potentially resulted in an overestimation of the extent of problems with 
the Directory. Concerns included the use of First DataBank as a basis 
for comparison, sample size, and the exclusion of two groups of NDCs 
from sampling.  Additionally, FDA pointed out that our finding that 36 
percent of drug products listed were no longer on the market or were 
listed in error was not representative of the entire Directory; rather, 
the finding only applied to the group of NDCs that were in the 
Directory and not in First DataBank. The full text of FDAs comments 
is in Appendix D. 
OFFICE OF INSPECTOR GENERAL RESPONSE 
We will provide access to our data files so that FDA can follow up on 
the problems identified in this report.   
In response to FDAs concerns about our use of First DataBank as a 
basis for comparison, we agree that the objectives of the Directory and 
First DataBank differ and that First DataBank is not intended to be a 
complete listing of all drugs currently on the market.  However, a more 
complete listing would likely have identified a greater number of drug 
products that are on the market and not listed in the Directory.  In 
other words, use of First DataBank likely resulted in an 
underestimation of the extent of missing NDCs. 
Regarding the second concern, while a larger sample may have reduced 
the confidence intervals around the estimates, the sample sizes were 
sufficient to accurately quantify the problems cited.  These estimates 
were calculated using appropriate sampling techniques and do not lead 
either to underestimation or to overestimation. 
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FDAs third concern was with our exclusion of two groups of NDCs 
from sampling.  These excluded groups contain the NDCs in both the 
Directory and First DataBank and those NDCs pending with FDA.  
The purpose of this study was not to provide an overall error rate, but 
rather to identify missing and inaccurate NDCs. Our sampling 
methodology was appropriate for this purpose. The data presented in 
this report pertain only to the sampled groups and identify missing 
and inaccurate drug products in FDAs databases. 
With regard to FDAs comment that our finding concerning the  
36 percent of drug products was not representative of the entire 
Directory, we clarified the findings wording in the report.   
We acknowledge the apparent decline in the percentage of missing 
drug products, and we continue to recommend that FDA implement 
the actions described to address the remaining issues identified and 
ensure that the Directory is complete and accurate. 
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  E N D N O T E S  

1 Food, Drug and Cosmetic Act,  510(j)(1) and 510(b). 
2 21 CFR  207.21(a)(b) (2005). 
3 Firms are required to submit updates every June and December. 
4 21 CFR  207.21(b) (2005). 
5 Food, Drug and Cosmetic Act,  502, 301(p), and 303. 
6 In 2004, FDA issued a final rule requiring, among other things, 
prescription drug products to have barcodes that contain NDCs.  As a 
consequence, entities that develop systems to utilize barcodes will require 
a complete electronic listing of NDCs, which FDA has committed to 
providing.  An incomplete Directory may lessen the usefulness of 
barcoding and reduce its intended impact as a tool to reduce medication 
error in health care settings. 
7 Bar Code Label Requirements for Human Drug Products and 
Biological Products; Final Rule, 69 Federal Register 9120, February 26, 
2004. 
8 Form FDA-2657 (the Drug Product Listing Form) is used by drug firms 
for initial listing of all information for all drugs in commercial 
distribution, may be used by private-label distributors that elect to 
submit information directly to FDA, and is used to update information 
on currently listed drug products.  Form FDA-2658 (the Registered 
Establishments Report of Private Label Distributors) is used by drug 
firms to list information for private-label distributors that do not elect to 
submit listing information directly to FDA.   
9 21 CFR  207.22(b) (2005). 
10 The pending drug product file contains 32,418 NDCs for products that 
have been submitted for listing and need corrections or additional 
information.  The discontinued drug product file contains 62,250 NDCs 
for products that were discontinued and are no longer on the market. 
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11 21 CFR  207.35(b) (2005). 
12 For this report, the term drug firms represents not only drug 
manufacturers, but also relabelers, distributors, and repackagers of 
drug products. 
13 Some Government agencies display NDCs in an 11-digit format that 
includes a 5-digit labeler code, a 4-digit product code, and a 2-digit 
package code.  FDA uses a 10-digit code that is configured as 4-4-2,      
5-3-2, or 5-4-1 (labeler code-product code-package code). 
14 First DataBank, Knowledge Bases, National Drug Data File Plus 
(2004).  Available online at 
http://www.firstdatabank.com/knowledge_bases /nddf_plus/. Accessed 
May 2005. 
15 May and July 2005:  Telephone interviews with First DataBank staff. 
16 Department of Health and Human Services, Office of Inspector 
General, The FDA Prescription Drug File, OEI-03-90-02300, 
November 1991. 
17 21 CFR  207.21(b) (2005). 
18 Available online at http://www.fda.gov/cder/drls/default.htm. 
Accessed June 15, 2005. 
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  A P P E N D I X ~ A  
FDAs Current Drug Listing Process 
FDA receives, barcodes, and logs  FDA contractor reviews forms 
completed 2657/8 forms from drug firms.  for completeness and 
correctness, then date stamps all 
documents. 
Information is 
deficient. 
FDA 
Firm 
Forms are copied and filed.

Original is returned to the

firm with letter describing deficiencies.

Firm has 20 working days to return

paperwork with correct information.

No response from firm. 
Information is 
Corrected forms are  complete and correct. 
returned to FDA. 
FDA sends a second notification. 
The firm has 10 working days to 
return the form with corrections. 
Corrected forms are 
No response  returned to FDA. 
from firm. 
Information is entered into the 
DRLS, which updates the NDC Directory. 
Deficient paperwork is kept in 
Paper file is placed in storage. 
the pending file and not updated 
in the NDC Directory. 
Source: OIG description of FDAs listing process based on interviews with FDA staff and observations of 
FDAs contractors. 
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  A P P E N D I X ~ B

Detailed Methodology 
This study relied on multiple data sources and methods.  Sources 
included Food and Drug Administration (FDA), drug firms, and First 
DataBank. This appendix provides a detailed description of data 
sources, sample selection, and data collection procedures. 
Data Sources 
Databases 
Databases we used for this study were FDAs Drug Registration and 
Listing System (DRLS) and First DataBanks National Drug Data File 
PlusTM (hereafter referred to as First DataBank). 
The FDA Drug Registration and Listing System The DRLS consists of the 
listed drug file or National Drug Code (NDC) Directory, the Pending 
Drug File, and the Discontinued Drug file.  The FDA DRLS files we 
used were downloaded on and current as of February 11, 2005. 
a. 	 The DRLS Listed Drug Filethe Directory The Directory contains 
all prescription drugs, selected over-the-counter (OTC) drugs, 
and homeopathic drugs.  This study was limited to prescription 
drugs. The Directory contained a listing of 123,856 NDCs for 
57,035 prescription drug products.1 
b. 	 The DRLS Pending File The Pending File contains NDCs 
submitted by drug firms that were not listed in the Directory 
because of deficiencies in the submission (i.e., incomplete or 
incorrect information). The Pending File contained 32,418  
NDCs for 13,160 prescription drug products.  
c.	 The DRLS Discontinued File The Discontinued File contains NDCs 
for prescription drugs that are no longer on the market as 
reported by drug firms.  The Discontinued File contained 62,250 
NDCs for 38,463 prescription drug products. 
First DataBank First DataBank is a private, commercially available 
database that provides descriptive and pricing information for prescription 
drugs, OTC drugs, herbal remedies, and dietary supplements.  We 
included only the prescription drugs for this study.  The First 
1 Each product may have multiple NDCs because of multiple package codes. 
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A P P E N D I X   ~   B  
DataBank file we used was downloaded and current as of February 25, 
2005, and contained 47,814 NDCs for 24,850 prescription drug products. 
Documentary Evidence 
We reviewed the following documents:  
1. 	 FDAs Guidance For Industry:  Forms for Registration of 
Producers of Drugs and Listing of Drugs in Commercial 
Distribution (Draft Guidance); 
2. 	 Guidance manual provided to FDA contractors responsible for 
responding to drug listing questions, processing drug 
registration forms, and posting entries to list drugs in the 
Directory; 
3. 	 Letter templates to inform drug firms of deficiencies in listing 
submissions; and 
4. 	 Samples of listing submissions. 
We also reviewed copies of Form FDA-2657/2658 that were submitted 
by drug firms to list or update the status of NDCs.  We obtained copies 
of forms from FDA files and from drug firms.  We compared forms 
obtained from FDA files with those submitted by drug firms and with 
information in the Directory. 
Interviews 
We conducted interviews with FDA staff in May 2005.  These interviews 
provided information about the listing procedures used to process 
documents received from drug firms. FDA staff described the 
procedures they follow when drug listing submissions are incomplete or 
inaccurate. 
Information Requests 
We sent information request forms to drug firms asking if the NDC in 
our sample was associated with their respective firm, if the product was 
still on the market, if they submitted drug listing forms for the NDC 
and, in cases where the product was no longer on the market, whether 
they submitted forms to discontinue the listing. If a drug firm reported 
it had not submitted forms to list or discontinue an NDC, we requested 
a reason.  If the firm reported that it had submitted forms, we requested 
supporting documentation. 
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A P P E N D I X   ~   B  
Firm Surveys 
Our survey asked firms about difficulties in listing NDCs, their 
perceptions of the adequacy of guidance provided by FDA, whether and 
how they verify that their NDCs are listed, if they ever needed to 
resubmit information because of deficiencies, and how they learned of a 
need to resubmit material(s). 
Data Cleaning 
Some cleaning of the Directory, the FDA Pending File, and First 
DataBank files was necessary.  We eliminated records for 
nonprescription drugs and invalid or incomplete NDCs from the 
Directory and the FDA Pending File. We eliminated records for 
discontinued NDCs, those with invalid or incomplete NDCs, and all 
nonprescription drug products from First DataBank.  
The NDC variable in First DataBank is a segmented 11-digit number, 
rather than a segmented 10-digit number as in FDAs Directory.  To 
compare the Directory with First DataBank, we had to replicate First 
DataBanks NDC format.  In both databases the NDC code is made up 
of a combination of a labeler code, a product code, and a package code. 
However, FDAs NDC format is a 3-segment number that allows for 
various combinations of segment lengths (4-4-2, 5-3-2, 5-4-1) as long as 
the result is a 10-digit number.  First DataBanks format forces a 
consistent 5-4-2 combination. We added zeroes where necessary to the 
front of segments and combined the three segments to conform to the  
5-4-2 format used by First DataBank.   
Sample Selection 
We sampled 400 NDCs to estimate the proportion missing from the 
Directory and the proportion that should not be in the Directory.  We 
did this to verify which NDCs were still on the market.   
We matched the Directory and FDA Pending File with First DataBank 
to determine unlisted NDCs that were in First DataBank, and NDCs in 
the Directory but not listed in First DataBank.  Table B1 provides more 
information about our population and samples. 
 	 We randomly selected 200 NDCs from the 18,664 products listed 
in First DataBank but not in the Directory. We selected 100 
NDCs missing from all DRLS files and 100 present in the FDA 
Pending file but not the Directory. 
 	 We randomly selected 200 NDCs from the 94,682 products listed 
in the Directory but not in First DataBank.  
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A P P E N D I X   ~   B  

Table B1: Source Databases and Sample Size by Category 
Number of Records in Database 
FDA Directory  123,856 
First DataBank  47,814 
FDA Pending File  32,418 
Number of Records in Population
  Population Size  Sampled 
Products in Directory but NOT First DataBank  94,682  200 
Products in First DataBank but NOT Directory  13,163  100 
Products in First DataBank and FDA Pending File  5,479  100 
Source:  OIG matching of FDA Directory and Pending file with First DataBank. 
Data Collection 
FDA Files  
We went onsite at FDA to collect available physical files for each NDC 
in our three samples.  FDA staff also searched files for forms we were 
unable to locate. 
Pending NDC Information  
FDA provided a DRLS database printout in Microsoft Excel format of 
the reasons listings were pending for our sample of 100 NDCs in the 
Pending File and First DataBank. 
Firm Survey 
There were 173 different drug firms associated with the 400 sampled 
NDCs. We sent surveys to 172 of the 173 drug firms.2  To respond to 
the questions, drug firms needed to have experience with listing NDCs.  
Fourteen drug firms were classified as ineligible for a variety of reasons 
(see Table B2). Five drug firms refused to respond to the survey.  The 
final survey reponse rate was 97 percent as shown in Table B2. 
2 We determined that one firm was ineligible to respond and therefore did not send a 
survey to that firm. 
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A P P E N D I X   ~   B  

Table B2:  Drug Firm Survey Response 
Group  Number 
 Drug firms with products in sample  173 
 No survey sent; identified as unable to respond for a valid 
reason  1 
 Ineligible:  Out of business  9 
 Ineligible:  Do not complete their own forms  3 
 Ineligible:  No longer own pharmaceutical division of  
 business  2 
 Final sample size  158 
Response 
 Refused to respond  5 
 Surveys completed  153 
Response rate  97% 
 Source:  OIG analysis of surveys mailed to and returned by drug firms. 
Firm Information Request  
We sent 399 information request documents to the 172 drug firms with 
NDCs in our sample.3  We did not receive 10 responses from 9 drug 
firms that were no longer in business.  All were in the sample of NDCs 
in FDA and not First DataBank.  We coded these as no longer on the 
market and grouped them with other NDCs that should have been 
discontinued.  (See Table B3.)   
Analysis of Quantitative Data 
Firms responses to the information requests were used to code whether 
the products were on the market and whether the drug firms reported 
they had submitted forms to list or delist NDCs.  Reasons NDCs were 
pending were coded from information provided by FDA. 
Drug firms were coded as out of business, products off the market 
when:  (1) the information request was returned by the Postal Service, 
(2) an exhaustive Internet search for information about the firm 
produced no results, and (3) we verified the firms last registration date 
and other relevant information with FDA. 
3 Some firms had more than one NDC in our sample and received multiple information 
request forms. 
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A P P E N D I X   ~   B  

Table B3:  Information Request Response 
Sample: Records Not in FDAs Directory but Listed in First DataBank
 Initial sample  100 
 Ineligible:  products were OTC drugs  3 
 Final sample  97 
 Number of responses  96 
Response rate  99% 
Sample:  Records in FDA Pending File and Listed in First DataBank
 Initial sample  100 
 Number of responses  100 
Response rate  100% 
Sample: Records in Directory but Not in First DataBank
 Initial sample  200 
 Information requests received from drug firms  189 
 No response (firm out of business and drug off market)  10 
 Number of responses  199 
Response rate  100% 
Source:  OIG Analysis of information requests sent to and received by drug firms. 
Extrapolating Sample Conclusions to the Population 
Estimates generalizing the results from the sample findings to the 
respective populations were based on a 95-percent confidence 
interval. Each confidence interval estimated the range of values 
which were likely to include the population parameter (which is 
unknown). The upper and lower boundaries of the confidence limits 
are reported.  (See Appendix C.) 
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  A P P E N D I X ~ C  
Confidence Intervals 
Table C1:  NDCs on the Market, Not in the Directory, but Listed in First DataBank 
Population:  13,163 
Number in Sample:  96 
95% Confidence 
Interval for 
Percentage  (Number) 
Percentage  on the Market 
(Number) in  Lower  Upper 
Group  Group 
NDCs on the Market and Not in the Directory  69.8  60.5  79.1 
(Number in parentheses below percentage)  (9,187)  (7,960)  (10,413) 
Subgroups of NDCs on the Market and Not in the Directory 
(Analysis of 67 NDCs that were in this group, representing 69.8% of the sample of 96) 
Firm reported listing and provided unsubstantiated evidence  46.3  34.0  58.5 
Firm reported listing but did not provide evidence; none found in FDA 
files  28.4  17.3  39.4 
Firm admittedly did not list  16.4  7.3  25.4 
Firm reported listing; and evidence found in FDA files*  9.0  3.4  18.5 
*To adjust for invalid results because of the small number (negative number on lower confidence interval), this confidence 
interval was calculated with an exact method based on the binomial distribution. 
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A P P E N D I X   ~   C  

Table C2:   NDCs on the Market and Pending and Reasons Pending 
Population:  5,479 
Number in Sample:  100 
95% Confidence 
Interval for 
Percentage (Number) 
Percentage  on the Market 
(number) in  Lower  Upper 
Group  Group 
NDCs Not in Directory, in FDA Pending File, and on the Market  94.0  89.3  98.7 
(Number in parentheses below percentage)  (5,150)  (4,893)  (5,407) 
Reasons Pending Subgroups of NDCs Not in Directory, in FDA Pending File, and on the Market  
(Analysis of 94 NDCs that were in this group, representing 94% of sample of 100) 
Firm failed to provide label and/or package insert  40.4  30.4  50.4 
Firm submitted incorrect manufacturer information  39.4  29.4  49.3 
Manufacturer has not listed NDC  34.0  24.4  43.7 
Other error on the form  11.7  5.1  18.3 
Unknown*  2.1  0.3  7.5 
*To adjust for invalid results because of the small number (negative number on lower confidence interval), this confidence 
interval was calculated with an exact method based on the binomial distribution. 
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A P P E N D I X   ~   C  

Table C3:  NDCs Not on the Market, Not in First DataBank, but Listed With FDA 
Population:  94,682 
Number in Sample:  199 
95% Confidence 
Interval for 
Percentage (Number) 
Percentage  on the Market 
(Number) in  Lower  Upper 
Group  Group 
NDCs Not on the Market, Listed in the Directory  36.2  29.5  42.9 
(Number in parentheses below percentage)  (34,257)  (27,887)  (40,626) 
Subgroups of NDCs Not on the Market, Listed in the Directory 
(Analysis of 72 NDCs that were in this group, representing 36.2% of the sample of 199) 
Firm failed to delist discontinued product  54.2  42.4  66.0 
Firm failed to delist old NDC when new NDC was assigned  18.1  9.0  27.2 
Firm no longer in business and did not discontinue NDCs  12.5  4.7  20.3 
Firm was unaware of listing  12.5  4.7  20.3 
FDA error*  2.8  0.3  9.7 
*To adjust for invalid results because of the small number (negative number on lower confidence interval), this confidence 
interval was calculated with an exact method based on the binomial distribution. 
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  A P P E N D I X ~ D  

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  A C K N O W L E D G M E N T S  

This report was prepared under the direction of Judith V. Tyler, 
Regional Inspector General for Evaluation and Inspections in the Dallas 
Regional Office, and Kevin Golladay, Deputy Regional Inspector 
General. Other principal Office of Evaluation and Inspections staff who 
contributed include: 
Susan Wolfe, Ph.D., Project Leader 
Sarah Craren, Ph.D., Program Analyst 
Ayana Everett, Program Specialist 
Elise Stein, Director, Public Health and Human Services Branch 
Kevin Farber, Mathematical Statistician 
Barbara Tedesco, Mathematical Statistician 
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