Saving lives and money: the government mandates pharmaceutical bar coding

Saving lives and money: the government mandates pharmaceutical bar coding – RFID/ADC

Brian Albright

New rules mandating pharmaceutical bar coding should be completed by the end of the year. Although bar coding of drugs has long been considered a panacea for hospital drug errors, automatic identification will also help make the medical supply chain more efficient–an important benefit that has helped sell the concept to drug manufacturers and the healthcare industry.

In March 2003, the U.S. Department of Health and Human Services released a proposed regulation from the Food and Drug Administration (FDA) that will require bar codes on virtually every drug used in hospitals except physician samples, including prescription drugs, over-the-counter drugs packaged for hospitals and vaccines. Medications will use a bar code with an associated National Drug Code (NDC) number to uniquely identify each drug, including its strength and dosage.

The bar code proposal will apply to drug manufacturers, repackers, relabelers and private label distributors, as well as to all imported pharmaceuticals, and go into effect three years after the final rules are published. The industry is expected to follow standards established by the Uniform Code Council Inc. (UCC), Lawrenceville, N.J., and EAN International, Brussels, Belgium, which are already in use by many manufacturers.

Form and function

There is general agreement on most of the elements of the rule, except for one issue–the FDA has specified linear bar codes on drug labels. That’s good news for hospitals that have already installed equipment that can only read linear codes. However, by limiting the language of the rule to linear codes, the FDA may be excluding future technologies, such as 2D codes (which can hold more data) or even RFID tags.

The Healthcare Distribution Management Association (HDMA), Reston, Va., and others, working as part of the Industry Coalition on Patient Safety, has lobbied the FDA to change the wording to be more general. Michael Gallo, associate director of distribution logistics at HDMA, says that linear bar codes should be the starting point, but the industry needs the flexibility to move to other technologies down the road. “More open language will start us off with a good technology but also provide a way to get to the future,” he says. “Otherwise, to use another technology later on will require them to write a new regulation, and who knows when that will happen.”

Exactly what the unit-level bar code will look like will depend on several factors. If the code eventually includes lot numbers and expiration dates, some existing bar code systems–such as those using Code 128 symbology–would produce bar codes that are too long to fit on a blister pack. One possible alternative is the UCC’s Reduced Space Symbology, which provides more data in a smaller code.

One possible loophole in the rule is that while bar coding is mandated for unit-level packaging, manufacturers aren’t required to provide unit-level packaging. But Gallo thinks hospitals will give preferential treatment to suppliers who provide bar-coded packaging, even if it’s done at the repackager level. In fact, the Veterans Health Administration has made just that announcement.

Benefits worth the cost

The bar code proposal would create a system in which patients receive a bar-coded identification bracelet that is linked to their medical history. Scanners linked to computerized medical records would verify the proper medication.

Implementing this level of bar coding will cost the drug industry an estimated $50 million and the healthcare industry an addition $7.2 billion to install the bar code scanning infrastructure to read the labels.

The HDMA has published a survey on healthcare industry bar code readiness (available at According to its research, 96% of manufacturers already use bar coding at some level of packaging; 24% bar code all unit-of-use packaging, and 5% bar code all unit-dose packaging. Further, 7% of hospitals already use scanning for medication dispensation, and 42% use bar codes for inventory or receiving. The HDMA estimates that by the end of 2004, 50% of manufacturers will bar code all unit-of-use packaging, and 44% will bar code all unit-dose packaging.

The FDA estimates that a standardized bar code system for medications will reduce medication errors by 50%, which would amount to a financial savings of $3.9 billion.

The Institute of Medicine (IOM), Washington, D.C., has reported that at least 7,000 patients die annually because of drug errors alone. The FDA estimates that 1.25 million adverse drug events per year occur in hospitals, of which about 30% are preventable.

The Veterans Administration (VA) hospital system implemented bedside scanning of pharmaceuticals and patient wristbands using equipment from Zebra Technologies Corp., Vernon Hills, Ill., and Symbol Technologies Inc., Holtsville, N.Y., and reported an 86.2% reduction in medication errors. The Colmer O’Neil Veterans Affairs Medical Center in Topeka, Kan., prevented more than 378,000 errors over four years with such a system.

In addition to matching the right drug with the right patient at the right dosage, such systems can even ensure that the caregiver is authorized to dispense the drug, and they can provide better documentation for insurance reimbursement, says Kenneth Kleinberg, senior director at Symbol Technologies.

Bar codes not only save lives but also save the hospital money–medication errors can effect Medicare reimbursement, lead to lawsuits, and result in longer hospital stays. Bar coding also makes hospital staff more efficient, and Kleinberg says the administrative savings alone may cover the $7 billion price tag.

Because these systems usually run on a wireless network, there are other benefits, too. “Physicians can use mobile computers for rounding and get updated patient information immediately,” says Kleinberg, adding that wireless can also be used to track specimen collection and provide voice-over-IP service.

Nurses at Waldo County General Hospital, a 45-bed facility in Belfast, Maine, use wireless computers from Symbol and bar coding to track materials used in surgery. By scanning materials and matching them to surgeons before an operation, the hospital generates more accurate billing–and saved $10,000 in the first nine days of going live.

Using applications from Caduceus Systems LLC, Austin, Texas, the hospital can leverage its existing wireless network throughout the entire facility, from running the emergency room to scanning materials right off the delivery truck. Bedside drug scanning presents only an incremental cost.

“According to our technology vendors, we just basically have to have the hardware in place [for bedside scanning]. The software part will be simple,” says Mac Young, project manager and information systems educator at Waldo County. “When the rules go into effect, we’re ready.”

Today, just 35% of all drugs given to hospital patients at the bedside are packaged with a bar code, and although a few pharmaceutical companies have started putting bar codes on their drugs, some manufacturers have blanched at the additional cost.

But manufacturers will benefit, says Gallo, through better inventory visibility and by making recalls easier to manage.

“Anytime there is a mandate, people will find a lot of reasons not to do it,” Gallo says. “I think this will open up a lot of new ideas.”

According to a 1998 report from Ernst & Young, New York, N.Y., developed on behalf of the Efficient Healthcare Consumer Response (EHCR) Coalition, use of standards-based bar coding in the healthcare supply chain would save $6.7 billion in product movement, $1.7 billion in efficient order management and $2.6 billion in efficient information sharing in the U.S. alone.

Frontline Solutions and the Uniform Code Council will present The Pharmaceutical Bar Code Summit during the International Supply Chain Week exhibition Sept. 17-18 at McCormick Place in Chicago.

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