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Department of Health and Human Services


OFFICE OF 

INSPECTOR GENERAL 

THE FOOD AND DRUG 


ADMINISTRATION’S NATIONAL 


DRUG CODE DIRECTORY


Daniel R. Levinson


Inspector General 


August 2006


OEI-06-05-00060

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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 OIG’s 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. 
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Δ EXECUTIVE SUMMAR Y 

OBJECTIVE 

To determine (1) whether the Food and Drug Administration’s (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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EXE CUTIVE S U MMAR 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 

DataBank’s 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 FDA’s 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 FDA’s 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 FDA’s 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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EXE CUTIVE S U MMAR Y 

consequent failure to update drug product status with FDA 

(13 percent), and FDA errors (3 percent). 

FDA’s drug product listing process and lack of oversight contribute to 

deficiencies in the Directory. FDA’s 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 FDA’s 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 Directory’s 

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 study’s 

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 FDA’s 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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i 

Δ T ABLE OF CONTENTS 

EXECUTIVE SUMMARY ....................................

INTR O D U C T I ON ........................................... 1

FINDI NGS ................................................. 7

The Directory is incomplete due to missing drug products ....... 7

Additional drug product listings are pending ................. 8

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

FDA contributes to incompleteness and inaccuracies .......... 11

RECOM M E NDATI O NS ..................................... 14

 Agency comments ...................................... 16

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

ENDN OTE S ............................................... 18

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

A: FDA’s Current Drug Listing Process .................... 20

B: Detailed Methodology ................................ 21

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

D: Agency Comments................................... 30

ACKN O W LEDGMENTS .................................... 36
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Δ INTRODU C TION 

OBJECTIVE 

To determine (1) whether the Food and Drug Administration’s (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 establishment’s 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 FDA’s 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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INTROD UCT ION 

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 FDA’s 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 FDA’s 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. 

FDA’s 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 FDA’s 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 File—currently 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 File—discontinued drug products 

that were listed but are no longer on the market as reported by 

firms or known to FDA. 

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INTROD UCT ION 

• The DRLS Pending Drug File—drug 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 DataBank’s National Drug 

Data File PlusTM, hereafter referred to as First Databank, which is 

used by both private industry and Government agencies. 14 As with 

FDA’s 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 FDA’s 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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INTROD UCT ION 

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. 

FDA’s 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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INTROD UCT ION 

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 NDCs—NDCs that were in First Databank, 

but were not in the Directory or the FDA pending file; 

• Group 2: Pending NDCs—NDCs that were in FDA’s pending 

file and in First DataBank, but not in the Directory; and 

• Group 3: Discontinued NDCs—NDCs 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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INTROD UCT ION 

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 President’s Council on Integrity and 

Efficiency and the Executive Council on Integrity and Efficiency. 

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Δ FINDINGS

The Directory is incomplete, with an 

estimated 9,187 prescription drug 

products missing, primarily due to 

insufficient reporting by drug firms 

The Directory, consisting of 123,856 

drug products as of February 2005, is 

missing an estimated 9,187 drug 

products that are listed in First 

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 FDA’s 

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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F I NDING S 

Table 1: Reasons Drug Products Were Missing From the Directory 

Reason 

Estimated 

Percentage 

95% 

Confidence 

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. 

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 

Drug products in pending status 

are not in the Directory even 

though they may be on the market. 

We found that 94 percent of 

pending prescription drug products 

(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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F I NDING S 

Table 2: Reasons Drug Product Listings Were in the DRLS Pending File 

Reason 

Percentage 

of NDCs* 

95% 

Confidence 

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 product’s 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 NDING 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 FDA’s 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. 

The Directory is not accurate, with an estimated 

34,257 drug products no longer on the market or 

listed in error, primarily because to drug firms 

failed to report drugs taken off the market 

An estimated 36 percent of drug 

products that were in the Directory 

and not in First DataBank were no 

longer on the market or were listed 

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 FDA’s 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 NDING S 

Table 3: Reasons Drugs No Longer on the Market Remained in the 

Directory 

Reason* 

Percentage 

of NDCs 

95% 

Confidence 

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. 

FDA’s internal drug product listing 

process and lack of oversight 

contribute to deficiencies in the 

Directory 

Listing drug products and reporting NDCs 

to FDA is a manual process in which drug 

firms submit paper forms and data entry 

clerks manually enter the information into 

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 FDA’s 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 

FDA’s 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 NDING S 

FDA has yet to finalize guidance for listing drug products 

Although FDA’s 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 document’s 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 FDA’s 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 FDA’s pending file. Surveyed firms said that when they 

do check with FDA to verify a listing, they frequently check FDA’s 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 firm’s 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 NDING 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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Δ RECOMME NDA TIONS 

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, FDA’s 

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 FDA’s 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 report’s 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 MMENDA 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 Directory’s 

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 FDA’s 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 FDA’s 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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FDA’s 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 FDA’s databases. 

With regard to FDA’s comment that our finding concerning the 

36 percent of drug products was not representative of the entire 

Directory, we clarified the finding’s 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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Δ ENDNOTE 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 

Establishment’s 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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Δ APPENDIX~A 

FDA’s 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. 

Firm 

FDA 

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.

Information is 

deficient. 

Information is 

C complete and correct. orrected forms are 

returned to FDA. 

Corrected forms are 

returned to FDA. 

Information is entered into the 

DRLS, which updates the NDC Directory. 

Paper file is placed in storage. 

No response from firm. 

FDA sends a second notification. 

The firm has 10 working days to 

return the form with corrections. 

No response 

from firm. 

Deficient paperwork is kept in 

the pending file and not updated 

in the NDC Directory. 

Source: OIG description of FDA’s listing process based on interviews with FDA staff and observations of 

FDA’s contractors. 

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Δ APPENDIX~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 FDA’s Drug Registration and 

Listing System (DRLS) and First DataBank’s 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 File—the “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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APP 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. FDA’s 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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APP 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 FDA’s Directory. To 

compare the Directory with First DataBank, we had to replicate First 

DataBank’s 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, FDA’s 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 DataBank’s 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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APP 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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APP 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 firm’s 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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APP E N D I X ~ B 

Table B3: Information Request Response 

Sample: Records Not in FDA’s 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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Δ APPENDIX~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 

Group 

Percentage 

(Number) in 

Group 

95% Confidence 

Interval for 

Percentage (Number) 

on the Market 

Lower Upper 

NDCs on the Market and Not in the Directory 

(Number in parentheses below percentage) 

69.8 

(9,187) 

60.5 

(7,960) 

79.1 

(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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APP E N D I X ~ C 

Table C2: NDCs on the Market and Pending and Reasons Pending 

Population: 5,479 

Number in Sample: 100 

Group 

Percentage 

(number) in 

Group 

95% Confidence 

Interval for 

Percentage (Number) 

on the Market 

Lower Upper 

NDCs Not in Directory, in FDA Pending File, and on the Market 

(Number in parentheses below percentage) 

94.0 

(5,150) 

89.3 

(4,893) 

98.7 

(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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APP 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 

Group 

Percentage 

(Number) in 

Group 

95% Confidence 

Interval for 

Percentage (Number) 

on the Market 

Lower Upper 

NDCs Not on the Market, Listed in the Directory 

(Number in parentheses below percentage) 

36.2 

(34,257) 

29.5 

(27,887) 

42.9 

(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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Δ APPENDIX~D 

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Δ ACKNOWLEDGMENTS 

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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