What is NDC reconciliation?

What the NDC tells you

The National Drug Code identifies a specific drug product: the labeler, the product and the package. Because the package is part of the code, the same medication in a different bottle size, or from a different manufacturer, usually carries a different NDC. That is why a simple code-to-code comparison can make it look as though a pharmacy dispensed a drug it never bought, when it actually bought an equivalent product under another code.

How a purchase-to-dispense reconciliation works

1. Define the review period and the drugs to include. In an audit, use the period and products named in the notice or findings.
2. Collect purchase records from every supplier for that period: wholesaler invoices, secondary supplier invoices, credit memos, returns and records of transfers between pharmacies.
3. Export dispensing data for the same period, including the NDC, quantity and fill date of each claim.
4. Convert everything to the same unit of measure, such as tablets, capsules, milliliters or grams, so that packages and dispensed quantities can be compared fairly.
5. Group equivalent products together and record why they belong together, keeping the invoices that show what was actually purchased.
6. Compare purchased quantity with dispensed quantity for each product or group.
7. Investigate every gap before drawing a conclusion: missing invoices, unrecorded returns or transfers, data-entry errors and pack-size mistakes are all common explanations.

Common causes of NDC mismatches

• An equivalent product from a different manufacturer was purchased under a different NDC.
• The same product was bought in a different pack size than the one billed.
• Units of measure were mixed, for example packages counted on one side and individual units on the other.
• Invoices from a secondary supplier or another pharmacy were left out.
• Returns and credits were not reflected in the purchase totals.
• A claim was billed with an incorrect NDC because of a data-entry error.

Why it matters in an audit

Auditors may compare a pharmacy’s purchase invoices with its claims to look for possible shortages, meaning more of a drug was billed than the purchase records appear to support. A mismatch means only that the codes in the compared records differ; its significance depends on the underlying products, invoices, quantities, pack sizes and units of measure. A careful reconciliation shows which findings the records support and which they do not. Running one before any audit, as part of an audit documentation routine, gives you time to find missing invoices while they are still easy to obtain.

Frequently asked questions