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Pharmaceutical Chargeback Processing: EDI 849 Error Codes


One of the key requirements for pharmaceutical chargeback processing is an ability to detect errors. The errors contained in pharmaceutical chargeback claims, sent by wholesalers to pharma manufacturers, average about 5-7% of contractual sales. Chargeback overpayment is a serious factor for the revenue leakage.

One of the key functions of the pharmaceutical chargeback processing is detecting all possible errors, adjusting the claims and communicating the adjustments and their reasons back to the wholesalers.

The chargeback reconciliation can be made either in a format of EDI form 849 “Response to Product Transfer Account Adjustment Transaction Set”, or in the format provided by the wholesalers for flat files. In both formats, the manufacturer has to show claim lines with errors, provide the error codes and adjusted values. While different manufacturers have different formats for reconciliation file formats, the error codes are consistent thr

oughout the industry.

Some validation rules rely on the plain data, submitted in the chargeback claim. Other rules require involvement of additional data, like membership rosters to check entity eligibility to buy on the submitted contract. Other rules rely on more sophisticated calculations, like detecting insufficient inventory at the wholesaler distribution centre.

Failure to utilize all available error codes means that some errors go undetected, and a correlated loss of revenue related to these missing validation rule will continue to happen unabated.


Pharmaceutical Chargeback Processing: EDI 849 Error Categories

The errors could be grouped into the following categories:

  • Customer
  • Product
  • Contract
  • Wholesaler
  • Pricing
  • Quantity
  • Multiple Submissions
  • Sale Date

All categories, except for “Multiple Submission” are self-explanatory.

Errors related to Multiple Submissions happen when a wholesaler adjusts the original claim and submits it on a new debit memo. Often, such adjustments happen because wholesaler adjusts the contract on which the sale was made. In such cases, the wholesaler reports a credit for the originally billed line on the original contract number, and then re-submits the same claim under a corrected contract number.

The following diagram shows debit memo processing cycle. Wholesaler re-submission can come as a response to either 849 correction sent by the manufacturer, or as a result of correction made by the wholesaler internally.

Pharmaceutical chargeback processing cycle for a debit memo

Pharmaceutical chargeback processing cycle for a debit memo

Pharmaceutical Chargeback Processing: EDI 849 Error Codes

The list below shows all available error codes by the categories:



FF:  Customer not covered by the contract

GG:  Customer dropped from the contract before the invoice date

HH:  Customer was not eligible to the contract on the Invoice date yet

II:  No Customer ID was provided

JJ:  Customer ID is invalid



KK:   Drug is not covered by the contract

LL:   Drug is not longer on the contract

MM: Drug is not on the contract yet

NN:   Drug code is missing or invalid



AA:   The contract number is not supplied.

BB:  Contract number supplied is not valid

CC:   Invoice date is after the contract expiration   date

DD:  Invoice date is before the contract started



OO:   The contract has never been loaded at the   submitting wholesaler

PP:   The wholesaler no longer carries the   contract

QQ:   The wholesaler has not been eligible for the contract yet



SS:  Contract price was not supplied

TT:  Contract price was not correct

UU:  Wholesaler acquisition cost was missing

VV:   Wholesaler acquisition cost was incorrect

WW: Extended chargeback amount not   provided

XX:  Extended chargeback amount incorrect



A1:   Insufficient Wholesaler Inventory

A3:  Quantity Invalid – Free Goods

A5:  Minimum Order Quantity Not Met

RR:   Quantity Invalid or Not Supplied


Multiple Submissions

A4:  Rebill Without Offsetting Credit

RI:   Invalid Resubmit Number

YY:   Duplicate Chargeback Request


Sale Date

A2:   Line Item Too Old

EE:  Invoice Date Missing or Invalid



Best practices of pharmaceutical chargeback processing require utilization of all available error codes in the chargeback  claim validation.

Relasoft offers best in class chargeback solution: The solution, that supports all standard and a number of custom validation rules, supporting specific terms of the manufacturers sales agreements and preventing overpayments of all types.

Should you have questions on chargeback processing, please submit them here or call us at 416-783-1027 for a good conversation without any obligations.

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