The Healthcare Distribution Alliance’s (HDA) 2026 Distribution Management Conference (DMC) served as a critical venue for industry stakeholders to address ongoing challenges and updates within the healthcare supply chain. Among the event’s pivotal discussions was the transition of the National Drug Code (NDC) from 10 digits to 12 digits, a move recently enacted, and its intersection with the requirements of the Drug Supply Chain Security Act (DSCSA).

A panel discussion featuring key industry experts, including representatives from GS1, explored this topic in depth. The transition to a 12-digit NDC is not just a minor regulatory tweak but a significant operational adjustment for manufacturers, distributors, and dispensers. The NDC serves as a universal identifier for medications in the U.S., and extending its length aims to accommodate an expanding database of drug products. However, this shift comes with its own set of technical and procedural challenges that require extensive coordination across the supply chain.

Key Takeaways for the Industry

One of the panel's key conclusions was the critical need for effective industry-wide organization. The expanded NDC format represents not only a regulatory requirement but also a logistical challenge that affects everything from databases and labeling systems to interactions between supply chain partners. According to speakers at the conference, this change necessitates thorough engagement between industry stakeholders to ensure smooth adoption.

Manufacturers face the immediate task of updating their internal systems to process 12-digit identifiers correctly. This involves revising software systems, adapting labels on drug packaging, and preparing for enhanced data exchange with downstream partners. Meanwhile, distributors and dispensers must ensure their platforms and protocols are equally aligned with the new standard. Any misalignment could lead to delays, errors, or operational inefficiencies, particularly given the DSCSA’s focus on seamless traceability in the pharmaceutical supply chain.

DSCSA: Progress and Remaining Challenges

The DSCSA’s implementation timeline has been a recurring topic of discussion among healthcare industry players, and this year’s DMC was no exception. The legislation, which aims to create an interoperable electronic system for identifying and tracing prescription drugs, ties directly into this NDC transition. Over the years, industry experts have tackled stabilization issues, handled edge cases, and developed processes for managing data exchange exceptions.

The overarching theme of the discussion was that while significant progress has been made on DSCSA compliance, the move to 12-digit NDCs introduces complexities that still need to be addressed. Stakeholders are working to identify best practices for ensuring compliance while minimizing operational disruptions.

Why 12 Digits?

The decision to expand the NDC from 10 to 12 digits is driven by a need for scalability. With the U.S. Food and Drug Administration (FDA) overseeing a growing catalog of approved medications and new drugs entering the market at a rapid pace, the existing system risks running out of unique identifiers. A 12-digit format exponentially increases the pool of possible codes, ensuring the system can accommodate industry evolution for years to come.

However, such systemic change does not come without cost. For smaller manufacturers or healthcare players with fewer resources, the transition may present significant financial and logistical hurdles. Large industry players are better positioned to absorb the costs and technical challenges, though they too must overcome compatibility issues and reconfigure their infrastructure.

Collaboration as the Path Forward

Conference speakers underscored the importance of collaboration among all supply chain participants. This collective effort includes clear communication about updated requirements, the sharing of implementation guidelines, and joint testing to ensure there are no interruptions in the supply chain as a result of discrepancies in NDC formatting.

“This conference provides a great opportunity for stakeholders across the supply chain to engage in meaningful discussions,” noted one panelist. By creating a platform for dialogue among manufacturers, distributors, and dispensers, events like the HDA DMC help the industry prepare for large-scale changes and mitigate potential issues before they arise.

What’s Next for the Industry?

As the industry adjusts to this new NDC standard, stakeholders will continue working to refine their systems and processes. The immediate priority is ensuring that every operational aspect—from software and labeling to supply chain communications—fits the 12-digit format. Looking ahead, the industry will also monitor how well the transition integrates with the broader objectives of the DSCSA, including enhanced drug traceability and security.

The FDA and organizations like GS1 will likely play a central role in offering guidance and monitoring compliance efforts. Additional workshops, webinars, and conferences are expected to follow, giving companies further opportunities to align their practices and share lessons learned.

For now, the transition from a 10-digit to 12-digit NDC stands as a reminder of the evolving complexity of the healthcare supply chain. It exemplifies the balance between regulatory requirements and industry innovation, serving as a key moment in the push toward a more secure and efficient pharmaceutical distribution system.