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4.3 Inventory Management and NDC Numbers

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PTCE Pharmacy Technician Certification Exam

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1 Introduction

About the PTCE How to Use This Guide

2 Chapter 1: Medications

1.1 Generic and Brand Drug Names & Classifications 1.2 Cardiovascular and Anticoagulant Medications 1.3 Anti-Infective and Analgesic Medications 1.4 Endocrine, Respiratory, CNS, and Storage Requirements

3 Chapter 2: Federal Requirements

2.1 DEA Regulations and Controlled Substance Schedules 2.2 Drug Supply Chain Security Act (DSCSA) 2.3 FDA Regulations and Drug Recalls 2.4 HIPAA, CMEA, and Prescription Requirements

4 Chapter 3: Patient Safety and Quality Assurance

3.1 Medication Error Prevention 3.2 High-Alert and Look-Alike/Sound-Alike Medications 3.3 Patient Counseling and Communication 3.4 Quality Assurance and Continuous Quality Improvement

5 Chapter 4: Order Entry and Processing

4.1 Prescription Interpretation 4.2 Pharmacy Calculations 4.3 Inventory Management and NDC Numbers 4.4 Insurance, Billing, and Prescription Processing

4.3 Inventory Management and NDC Numbers

Key Takeaways Explain This Topic AI

FDA assigns a 10-digit, three-segment NDC (labeler-product-package); billing systems use an 11-digit 5-4-2 format. Under an FDA final rule, NDCs move to a uniform 12-digit format on March 7, 2033; FDA keeps assigning 10-digit NDCs until then.

Par levels are the minimum and maximum quantities of medication to keep in stock.

FIFO (First In, First Out) ensures older medications are dispensed first.

Perpetual inventory tracks stock continuously; physical inventory is periodic count.

Medications within 3-6 months of expiration should be returned or marked for short dating.

Last updated: November 2026

Quick Answer: FDA assigns each drug product a 10-digit, three-segment National Drug Code (NDC): labeler, product, and package codes in a 4-4-2, 5-3-2 or 5-4-1 configuration. Billing systems pad it to an 11-digit 5-4-2 format. Effective inventory management uses par levels, FIFO rotation, and perpetual inventory systems to ensure medication availability and minimize waste.

Proper inventory management is critical for pharmacy operations. This section covers NDC numbers, stock management, ordering systems, and handling expired medications.

National Drug Code (NDC)

The NDC is a unique identifier for every drug product in the United States.

NDC Structure (11-digit billing format)

  • Segment Digits Identifies
  • Labeler Code First 5 digits Manufacturer or distributor
  • Product Code Middle 4 digits Specific drug, strength, and dosage form
  • Package Code Last 2 digits Package size and type
  • Format: 12345-6789-01
  • NDC Examples (illustrative numbers)
  • Drug NDC Breakdown
  • Lisinopril 10mg #100 (Manufacturer A) 00093-1040-01 00093 (labeler) - 1040 (product) - 01 (package)
  • Lisinopril 10mg #500 (Manufacturer A) 00093-1040-05 Same labeler and product, different package

Lisinopril 10mg #100 (Manufacturer B) 00378-xxxx-01 Different labeler; that firm assigns its own product and package codes

Important: Different manufacturers of the same generic drug will have different NDC numbers because the labeler code differs.

NDC Format Variations

FDA assigns NDCs as 10 digits in one of three formats:

  • 4-4-2 format
  • 5-3-2 format
  • 5-4-1 format

These are converted to 11 digits by adding leading zeros:

  • 1234-5678-90 becomes 01234-5678-90
  • 12345-678-90 becomes 12345-0678-90
  • Inventory Management Systems
  • Perpetual Inventory
  • Definition: Continuous tracking of inventory in real-time
  • Method: Computer system updates stock levels with each transaction
  • Benefit: Always know current stock levels
  • Used for: Controlled substances (legally required), high-value items
  • Periodic Inventory
  • Definition: Physical count at scheduled intervals
  • Method: Manual counting of all stock
  • Frequency: Monthly, quarterly, or annually
  • Purpose: Verify perpetual inventory accuracy
  • Point-of-Sale (POS) System
  • Updates inventory automatically when prescriptions are dispensed
  • Generates reorder alerts when stock reaches par level
  • Tracks purchasing patterns and seasonal demands
  • Par Levels

Par levels define minimum and maximum inventory quantities.

  • Term Definition
  • Minimum Par Level Lowest quantity before reordering
  • Maximum Par Level Highest quantity to keep in stock
  • Reorder Point When to place an order (usually at or above minimum)
  • Order Quantity Amount to order (usually brings stock to maximum)
  • Factors Affecting Par Levels
  • Usage rate: How quickly medication is dispensed
  • Lead time: How long it takes to receive order
  • Seasonal variation: Flu season increases demand for certain medications
  • Storage constraints: Refrigerator space, shelf space
  • Cost: Balance between stock-outs and capital tied up in inventory
  • Stock Rotation: FIFO

First In, First Out (FIFO) is the standard method for stock rotation.

  • FIFO Principles
  • Place newer stock behind older stock
  • Dispense from the front (oldest first)
  • Check expiration dates during stocking
  • Move short-dated items to the front
  • Why FIFO Matters
  • Reduces waste: Medications used before expiration
  • Cost savings: Less expired medication to return or discard
  • Patient safety: Ensures medication potency
  • Regulatory compliance: Required practice
  • Managing Expiration Dates
  • Expiration Date Rules
  • Situation Action
  • Medication expires this month Cannot be dispensed
  • 3-6 months before expiration Flag as short-dated
  • Expired medication Remove from stock immediately
  • No day listed (exp: 05/2026) Expires on last day of month (05/31/2026)
  • Beyond-Use Dating (BUD)

Different from manufacturer expiration date:

  • Repackaged medications: Usually 6 months or manufacturer expiration (whichever is sooner)
  • Compounded preparations: Depends on USP guidelines (days to weeks)
  • Multi-dose vials (opened): Usually 28 days unless otherwise specified
  • Returns and Recalled Medications
  • Drug Returns
  • Type Process
  • Expired medications Return to wholesaler or reverse distributor
  • Recalled medications Follow recall instructions (return, destroy, or hold)
  • Damaged medications Document and return for credit
  • Short-dated (unsold) May return before expiration for partial credit
  • Drug Recalls
  • Class Severity Action Required
  • Class I Serious health hazard or death Immediate removal, may notify patients
  • Class II Temporary or reversible health problems Remove from stock promptly
  • Class III Unlikely to cause adverse health consequences Remove from stock
  • Ordering and Receiving
  • Common Ordering Methods
  • Method Description
  • Direct from manufacturer Larger quantities, better prices, longer lead time
  • Wholesaler (primary) Daily orders, next-day delivery
  • Wholesaler (secondary) Backup for out-of-stock items
  • Emergency/STAT orders Same-day delivery for urgent needs (higher cost)
  • Receiving Orders Checklist
  • Verify order against invoice/packing slip
  • Check for damaged items
  • Verify quantities received
  • Check expiration dates (refuse if too short)
  • Verify controlled substance counts (DEA 222 forms)
  • Store refrigerated items immediately
  • Sign and date receiving documents
  • Enter into inventory system