[Federal Register Volume 68, Number 50 (Friday, March 14, 2003)]
[Proposed Rules]
[Pages 12500-12534]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5205]
[[Page 12499]]
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Part III
Department of Health and Human Services
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Food and Drug Administration
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21 CFR Parts 201, 606, and 610
Bar Code Label for Human Drug Products and Blood; Proposed Rule
Federal Register / Vol. 68, No. 50 / Friday, March 14, 2003 /
Proposed Rule
[[Page 12500]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 201, 606, and 610
[Docket No. 02N-0204]
RIN 0910-AC26
Bar Code Label Requirement For Human Drug Products and Blood
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
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SUMMARY: The Food and Drug Administration (FDA) is proposing a new
rule that would require certain human drug product labels and
biological product labels to have bar codes. The bar code for human
drug products and biological products (other than blood and blood
components) would contain the National Drug Code (NDC) number in a
linear bar code. The proposed rule would help reduce the number of
medication errors in hospitals and other health care settings by
allowing health care professionals to use bar code scanning equipment
to verify that the right drug (in the right dose and right route of
administration) is being given to the right patient at the right time.
The proposed rule would also require the use of machine-readable
information on blood and blood component container labels to help
reduce medication errors.
DATES: Submit written or electronic comments on this proposed rule by
June 12, 2003. Submit written comments on the information collection
requirements by April 14, 2003.
ADDRESSES: Fax written comments to the Dockets Management Branch (HFA-
305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061,
Rockville, MD 20852. Fax electronic comments to http://www.fda.gov/dockets/ecomments. Submit written comments on the information
collection provisions to the Office of Information and Regulatory
Affairs, Office of Management and Budget (OMB), Attn: Stuart Shapiro,
Fax: (202) 395-6974.
FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy,
Planning, and Legislation (HF-23), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-827-3380.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. What Actions Led to This Rulemaking?
B. What Are Medication Errors?
C. How Frequently Do Medication Errors Occur? What Is Their
Impact?
D. How Would Bar Coding Help Prevent Medical Errors?
E. Can Bar Code Use Reduce the Incidence of Medication Errors?
F. Is There Support for Putting Bar Codes on Drug Products?
II. Description of the Proposed Rule
A. Who Would Be Subject to the Bar Code Requirement? (Proposed
Sec. 201.25(a))
B. What Products Would Have to Have a Bar Code? (Proposed Sec.
201.25(b))
C. What Would the Bar Code Contain? (Proposed Sec.
201.25(c)(1))
D. Would the Rule Require a Specific Type of Bar Code? (Proposed
Sec. 201.25(c)(1))
E. Where on the Label Would the Bar Code Appear? (Proposed Sec.
201.25(c)(2))
F. What Would Happen if a Bar Code Could Not Be Put on a
Product?
G. What Is the Proposed Implementation Plan?
H. How Does This Rule Apply to Blood and Blood Components?
(Proposed Sec. 606.121(c)(13))
I. What Bar Code Requirement Would Apply to Biological Products?
(Proposed Sec. 610.67)
III. Legal Authority
IV. Environmental Impact
V. Paperwork Reduction Act of 1995
VI. Executive Order 13132: Federalism
VII. Analysis of Impacts
A. Introduction
B. Objective of the Proposed Rule
C. Estimate of Risk/Risk Assessment
D. The Proposed Rule
E. Description of Affected Sectors
F. Regulatory Costs of the Proposed Rule
G. Other Anticipated Expenditures
H. Reduction in Preventable Adverse Drug Events
I. Value of Avoided ADEs
J. Aggregate Benefit of Avoiding ADEs
K. Other Benefits of Bar Code Technology
L. Distributional Effects of Bar Code Technology
M. Comparison of Costs, Expenditures, and Benefits
N. Uncertainty and Sensitivity
O. Small Business Analysis and Discussion of Alternatives
P. Conclusion
VIII. Request For Comments
IX. References
Appendix--Additional Information on Various Studies Identifying
Different Types of Medication Errors
I. Introduction
A. What Actions Led to This Rulemaking?
In 1999, the Institute of Medicine (IOM) issued a report entitled
``To Err Is Human: Building a Safer Health System'' (Ref. 1). (The IOM
is a private, nonprofit organization that provides health policy advice
under a congressional charter granted to the National Academy of
Sciences.) The IOM report cited studies and articles to estimate that
between 44,000 and 98,000 Americans may die each year due to a range of
medical mistakes made by health care professionals. The IOM report
estimated that, in 1993 alone, an estimated 7,000 deaths were
attributable to medication errors (Ref. 1 at p. 27) and that:
[sbull] Medication errors account for 1 out of every 131 outpatient
deaths, and 1 out of every 854 inpatient deaths (Ref. 1 at p. 27); and
[sbull] The death rate attributable to medication errors may be
increasing. The IOM report cited a study that examined death
certificates from 1983 to 1993. The study found that, in 1983, 2,876
deaths were due to medication errors (which the authors defined as
accidental poisoning by drugs, medicaments, and biological products
resulting from acknowledged errors by patients or health care
professionals) (Ref. 1 at p. 32, Ref. A-14 of the Appendix to this
document). In 1993, 7,391 deaths were attributed to medication errors,
a 2.57-fold increase in the death rate (Ref. 1 at p. 32). Moreover, a
comparison of outpatient death rates suggested nearly an 8-fold
increase in medication error death rates (Ref. 1 at pp. 32 and 33).
The IOM report stated that deaths due to medication errors are
often preventable and cited bar codes as one way to prevent them (Ref.
1 at pp. 37, 175, 188, 189, 195-196).
The IOM report generated considerable controversy. Some felt that
the IOM's figures were exaggerated (Ref. 2), while others felt the
figures might have been too low (Ref. 3). Some felt that the term
``medical errors'' was, itself, misleading (Ref. 4). Others, including
FDA, suggested that the IOM report's basic message--that medical errors
are a serious public health problem--should not be lost regardless of
whether the annual mortality was 10,000 or 100,000 (Ref. 5)
The IOM report led to new efforts to improve patient safety. For
example:
[sbull] In December 1999, President Clinton directed the HealthCare
Quality Task Force to analyze the IOM report and to report back on
recommendations to
[[Page 12501]]
protect patients and to promote safety. In February, 2000, he announced
a plan to reduce preventable medical errors by 50 percent within 5
years.
[sbull] In February 2000, the Quality Interagency Coordination
(QuIC) Task Force (a group composed of the Department of Health and
Human Services (DHHS) and other Federal agencies) issued an action plan
that highlighted steps for Federal agencies to take to reduce medical
errors and to improve patient care.
[sbull] In March 2001, the Agency for HealthCare Research and
Quality (AHRQ) issued a report entitled ``Reducing and Preventing
Adverse Drug Events to Decrease Hospital Costs.'' The report stated
that more than 770,000 people are injured or die each year in hospitals
from adverse drug events and that studies had suggested that 28 to 95
percent of adverse drug events could be prevented by reducing
medication errors through the use of computerized monitoring systems,
especially computerized medication ordering systems (Ref. 6).
[sbull] In April 2001, the Secretary of Health and Human Services,
Tommy G. Thompson (Secretary Thompson), announced the establishment of
a new Patient Safety Task Force within DHHS. Secretary Thompson named
FDA as one of the Federal agencies leading this new effort (Ref. 7).
Congress also focused its attention on patient safety by holding
hearings in 2000 and 2001 on patient safety and medical errors. On May
24, 2001, Secretary Thompson appeared before the Senate Committee on
Health, Education, Labor, and Pensions' Subcommittee on Patient Health
and stated that new technology, such as bar coding, could help save
lives and money. Secretary Thompson noted that other industries used
bar coding and that the same technology could be used to track drug
dispensing and use and to prevent medication errors (Ref. 8).
Shortly thereafter, the American Society for Health-System
Pharmacists (ASHP) wrote to Secretary Thompson to urge that FDA
``develop regulations that mandate that drug manufacturers provide a
standardized machine-readable code (bar coding) on all drug product
containers, including single unit containers, which are essential for
hospital unit dose drug distribution systems'' (Ref. 9). ASHP mentioned
a June 26, 2001, recommendation by the National Coordinating Council
for Medication Error Reporting and Prevention (NCCMERP) urging FDA and
the United States Pharmacopeia (USP) to establish and implement a
uniform bar coding program for drugs (Ref. 9 at pp. 1 and 2). Secretary
Thompson later asked FDA to begin working on a bar coding proposal,
thereby putting in motion the events that led to this proposed rule.
B. What Are Medication Errors?
NCCMERP \1\ defines a medication error as:
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\1\ NCCMERP is composed of over 20 national organizations
(including FDA) whose objectives are to increase the reporting,
understanding, and prevention of medication errors and to recommend
strategies relative to systems modifications, practice standards,
and guidelines, and changes in packaging, labeling, and product
identity.
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* * * any preventable event that may cause or lead to
inappropriate medication use or patient harm while the medication is
in the control of the healthcare professional, patient, or consumer.
Such events may be related to professional practice; healthcare
products, procedures, and systems, including prescribing; order
communication; product labeling, packaging, and nomenclature;
compounding; dispensing; distribution; administration; education;
monitoring; and use. (Ref. 10)
For purposes of this preamble, we will adopt the same definition of
``medication error.''
Medication errors are a part of the overall ``medical errors''
problem because medical errors include surgical errors, device
failures, and medication errors. Medication errors can occur at several
points from the time the physician selects the drug to prescribe to a
patient to the time when the patient receives the drug. For example,
the physician may write a prescription for the right drug, but in the
wrong dose. The pharmacist might misread the prescription and provide
the wrong drug, or read the prescription correctly and dispense the
wrong drug. The health care professional administering the drug might
give it to the wrong patient or give it to the right patient, but at
the wrong time or in the wrong dose.
Articles discussing medication errors can be found dating back
several decades, and refer to such errors under various names,
including ``preventable adverse events,'' ``drug misadventuring,'' and
``iatrogenic illness'' or ``iatrogenic injury.'' (The word
``iatrogenic'' refers to ``any adverse condition in a patient occurring
as the result of treatment by a physician or surgeon'' (see Dorland's
Illustrated Medical Dictionary, 26th ed., at p. 647).) The articles
often identify the following types of medication errors:
[sbull] Administering the wrong dose,
[sbull] Administering a drug to a patient who is known to be
allergic,
[sbull] Administering the wrong drug to a patient or administering
a drug to the wrong patient,
[sbull] Administering the drug incorrectly,
[sbull] Administering the drug at the wrong time or missing doses.
(See the Appendix elsewhere in this document for a description of
various studies identifying different types of medication errors.)
C. How Frequently Do Medication Errors Occur? What Is Their Impact?
Studies differ as to how frequently medication errors occur. Some
studies suggest that the medication error rate is under 7 percent,
whereas others suggest a medication error rate at or above 20 percent.
The differences may be due, in part, to different definitions of
``medication error'' or different research methodology that focused on
fatalities, injuries, or medication orders. (See the appendix for a
summary of medication error rates reported in several studies.)
Although most medication errors do not result in harm to patients,
medication errors can result and have resulted in serious injury or
death (Ref. 11).
Medication errors also represent a significant economic cost to the
United States. In an article published in 1995, Johnson and Bootman
estimated the direct cost of preventable drug-related mortality and
morbidity to be $76.6 billion annually, with drug-related hospital
admissions accounting for much of the cost (Ref. 12). The authors
suggested that indirect costs, such as those relating to lost
productivity, might be two to three times greater than the direct
costs, making the total cost of all preventable, drug-related mortality
and morbidity range from $138 to $182 billion. A study by Ernst and
Grizzle published in 2001 used updated figures and revised the direct
cost estimate to $177.4 billion (Ref. 13). Another article estimated
the cost of preventable adverse drug events in hospitalized patients to
be $5,857 for each adverse drug event and the estimated annual costs
for preventable adverse drug events for a 700-bed hospital to be $2.8
million (Ref. 14).
D. How Would Bar Coding Help Prevent Medication Errors?
Bar codes would be part of a system, along with bar code scanners
and computerized databases, that would enable health care professionals
to check whether they are giving the right drug via the right dose and
right route of administration to the right patient at the right time.
Under this model, the system could work as follows:
[sbull] A patient would have his or her drug regimen information
entered into a computerized database.
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[sbull] Each drug would have a bar code. The bar code would provide
unique, identifying information about the drug that is to be dispensed
to the patient.
[sbull] In hospitals, health-care professionals, such as
pharmacists and nurses, would use bar code scanners (also called bar
code readers) to read the bar code on the drug before dispensing the
drug to the patient and use bar code scanners to read a bar coded wrist
band on the patient before giving the drug to the patient. In an
outpatient setting, the health care professional (such as a pharmacist)
could scan the bar code on the drug and compare the scanned information
against the patient's electronic prescription information before giving
the drug to the patient.
[sbull] The bar code scanner's information would go to the computer
where it would be compared against the patient's drug regimen
information to check whether the right patient is receiving the right
drug (including the right dose of that drug in the right route of
administration). The system could also be designed to check whether the
patient is receiving the drug at the right time.
[sbull] If the identity of the health care professional
administering the drug was desired, each health care professional could
also have a bar code. The health care professional would scan his or
her own bar code before giving the drug to the patient.
Bar codes could also complement other efforts to reduce medication
errors.
[sbull] In computer physician order entry (CPOE) systems, a
physician enters orders into a computer instead of writing them on
paper. The order can be checked against the patient's records for
possible drug interactions, overdoses, and patient allergies (Ref. 26).
[sbull] The retail pharmacy community is beginning to use a bar-
coded NDC number to verify that a consumer's prescription is being
dispensed with the correct drug. These pharmacy-based systems compare a
bar code that the pharmacy's computer prints on the consumer's
prescription against the bar code on the drug's label. If the computer
detects an error, the computer alerts the pharmacist to the problem.
In addition, bar codes could make it easier to enter medication
order entries into a patient's electronic medical records, help in
inventory control and billing, and help conserve hospital or health
care staff resources or free those resources so that they can be
devoted to patient care.
E. Can Bar Code Use Reduce the Incidence of Medication Errors?
Published articles and other information submitted to FDA suggest
that bar coding can reduce medication error rates significantly.
[sbull] One New Hampshire hospital reduced its medication error
rate by 80 percent after it adopted a bar coding program (Ref. 15).
[sbull] A medical center in Colorado lowered its medication error
rate by 71 percent between 1992 and 1994 (Ref. 16).
[sbull] A Department of Veterans Affairs (VA) hospital in Kansas
had no medication errors when its computerized, bar coding system was
used properly; the hospital estimated that the system prevented over
378,000 medication errors in a 5-year period (Ref. 17).
[sbull] Other published articles have discussed how bar coding can
reduce medication errors, including missed doses, or increase drug
dispensing accuracy (Refs. 18 through 23).
At a public meeting that we (FDA) held on July 26, 2002 (67 FR
41360, June 18, 2002), the VA gave a presentation on its use of bar
codes at the VA Medical Center in Topeka, Kansas. The VA stated that a
comparison of medication error data from 1993, the last year before the
VA implemented the bar code system, to data for 2001 showed that the
Topeka medical center reduced its reported medication error rate by
86.2 percent (Ref. 24). The improvements included:
[sbull] 75.5 percent improvement in errors caused by the wrong
medication being administered to a patient;
[sbull] 93.5 percent improvement in errors caused by the incorrect
dose being administered to a patient;
[sbull] 87.4 percent improvement in wrong patient errors; and
[sbull] 70.3 percent improvement in errors caused when medications
scheduled for administration were not given.
(Ref. 24 at p. 14).
One comment submitted in response to the public meeting indicated
that a bar code scanning system, in conjunction with a robotic system
for pharmaceutical distribution, reduced dispensing errors at the
University of Wisconsin from 1.43 percent to 0.13 percent and that the
university realized a return on its investment in 2 years (Ref. 25).
The comment also stated that there was an 89 percent reduction in
medication administration errors due to point-of-care bar code scanning
(Ref. 25 at p. 6).
We discuss the public meeting in greater detail in section II of
this document.
F. Is There Support for Putting Bar Codes on Drug Products?
In recent years, many organizations have either commented favorably
on or recommended the adoption of bar coding to reduce medication
errors. These organizations include the QuIC Task Force, NCCMERP, ASHP,
and Premier, Inc., an alliance of not-for-profit hospital and health
care systems (Refs. 27 through 29).
We also saw considerable support for bar coding at the July 26,
2002, public meeting we held to discuss a possible rule to require bar
code labeling. Nearly 400 individuals attended the meeting, and they
represented a broad range of interests, including:
[sbull] Nurses, including the American Academy of Nursing;
[sbull] Pharmacists, including the American Society of Health-
System Pharmacists;
[sbull] Physicians, including the American Medical Association;
[sbull] Hospitals, including the American Hospital Association, the
VA, which already has a bar code program in place for drugs used in VA
hospitals, and the Hospital Corporation of America, Inc., which intends
to have bar coding technology in place in its hospitals by the end of
2005;
[sbull] Pharmaceutical manufacturers, including the Pharmaceutical
Research and Manufacturers of America (PhRMA) and the Generic
Pharmaceutical Association (GPhA);
[sbull] Over-the-counter (OTC) drug manufacturers, including the
Consumer HealthCare Products Association (CHPA);
[sbull] Medical device manufacturers, including the Advanced
Medical Technology Association (also known as AdvaMed);
[sbull] Blood centers and blood organizations, including the
American Association of Blood Banks, America's Blood Centers, and the
American Red Cross;
[sbull] The Vaccine Identification Standards Initiative (VISI), a
collaborative effort between public health agencies and private
organizations involved in immunization practices and whose purpose is
to establish voluntary, uniform guidelines for vaccine packaging and
labeling and recording identifying information;
[sbull] Bar coding and other ``automatic identifier'' interests,
including the Uniform Code Council and the Health Industry Business
Communications Council (two standards development organizations that
have established bar code standards);
[sbull] Health or medical product distributors, including McKesson
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Corporation, the HealthCare Distribution Management Association, and
Cardinal Health; and
[sbull] The USP.
In addition, in response to requests to discuss bar code issues in
greater detail, we met separately with PhRMA on August 19, 2002, with
CHPA, GPhA, and others on September 17, 2002, and with the National
Alliance for Health Information Technology on October 9, 2002.
In general, almost all individuals, companies, and organizations
attending or commenting on the public meeting strongly supported the
use of bar codes on human drug products to help reduce medication
errors, but differed in their opinions as to the information that
should go into the bar code and whether certain products, such as over-
the-counter (OTC) drugs and medical devices, should have a bar code. We
discuss various aspects of the public meeting throughout the remainder
of this preamble to show how information from the public meeting helped
shape this proposal.
II. Description of the Proposed Rule
The proposal would create a new Sec. 201.25 entitled ``Bar Code
Label Requirements.'' The proposal would address:
[sbull] Who is subject to these bar code requirements?
[sbull] What drugs are subject to these bar code requirements?
[sbull] What does the bar code look like?
[sbull] Where does the bar code go?
The proposed bar code requirement would also apply to biological
products (other than blood and blood components). We cross-reference
this requirement in the biologics regulations at new Sec. 610.67.
For blood and blood components, the proposal would amend part 606
(21 CFR part 606) in Sec. 606.121(c)(13) which currently allows, but
does not require, the use of machine-readable symbols, approved by the
Director of the Center for Biologics Evaluation and Research (CBER), on
blood and blood component container labels. The proposal would require
the use of encoded, machine-readable information approved by the CBER
Director on blood and blood component labels.
A. Who Would Be Subject to the Bar Code Requirement? (Proposed Sec.
201.25(a))
In brief, under proposed Sec. 201.25(a), manufacturers, repackers,
relabelers, and private label distributors of human prescription drug
products and OTC drug products regulated under the Federal Food, Drug,
and Cosmetic Act (the act) or the Public Health Service Act would be
subject to the bar code requirement unless they are exempt from the
establishment registration and drug listing requirements in section 510
of the act (21 U.S.C. 360(g)(1)). In practice, this means that
pharmacies which are exempt under section 510(g) of the act are not
required to put bar codes on drugs they are dispensing. (The
requirements in proposed Sec. 201.25 would apply to biological
products (other than blood and blood components) and would include a
cross-reference at proposed Sec. 610.67. For convenience, this
preamble will refer only to proposed Sec. 201.25 alone without
repeated cross-references to proposed Sec. 610.67 (see section II.I of
this document).) For purposes of this proposal:
[sbull] ``Manufacturer'' means a person or persons who owns or
operates an establishment engaged in the manufacture, preparation,
propagation, compounding, or processing of a drug by chemical,
physical, biological, or other manipulations of the drug. These
activities include repackaging or otherwise changing the container,
wrapper, or labeling of any drug package in furtherance of the drug's
distribution from the original place of manufacture to the person who
makes final delivery or sale to the ultimate consumer or user.
[sbull] ``Repacker'' means a person or persons who owns or operates
an establishment that repackages and relabels a drug and does not
engage in any other activities performed by a manufacturer.
[sbull] ``Relabeler'' means a person or persons who owns or
operates an establishment that affixes or changes labels on a drug and
does not engage in any other activities performed by a manufacturer.
[sbull] ``Private label distributor'' means a person or persons who
owns or operates an establishment that commercially distributes, under
its own label or trade name, any drug manufactured, prepared,
propagated, compounded, or processed by a manufacturer, repacker, or
relabeler.
For example, if you make a prescription drug product, you would be
subject to the bar coding requirement. However, if you are a pharmacy
operating in conformance with applicable local laws regulating the
practice of pharmacy and are regularly engaged in dispensing
prescription drugs upon prescriptions of practitioners licensed to
administer such drugs to patients, and do not manufacture, prepare,
propagate, compound, or process drugs for sale other than in the
regular course of business of dispensing such drugs at retail, you
would not be subject to the bar code requirements. Your pharmacy would
be exempt because section 510(g)(1) of the act does not require you to
comply with the establishment registration and listing requirements.
We recognize that some hospitals themselves place bar codes on
drugs and have reduced their medication error rates significantly.
Requiring persons who manufacture, repackage, or relabel human drug
products to bar code their own products should be more efficient and
result in better quality bar codes. Manufacturers, repackers, and
relabelers generally have sophisticated manufacturing processes and
labeling machinery, and quality control systems that hospitals cannot
afford. Bar coding by third parties (such as hospitals) would be more
costly for the facility and would not achieve the economies of scale
that larger entities could realize. Having many small entities affix
bar codes could increase the possibility of a label error through the
attachment of the wrong bar code and could lead to inconsistent bar
code quality. For example, one comment from the public meeting stated
that an institution administering 2.5 million doses per year, even if
operating at 99.9 percent effectiveness at applying its own bar codes,
would introduce seven new errors per day from repackaging. Another
comment, submitted by an entity familiar with ``automatic
identification'' methods, stated that ``on demand'' bar code printing,
as used in hospitals and clinics, will have a higher error rate
compared to bar code printing by manufacturers and that the ``use and
maintenance of this type of bar code printing is historically haphazard
at best.'' Another comment from a bar code standards organization
estimated the error rate in hospital labeling to be approximately 17
percent nationwide.
More importantly, requiring persons who manufacture, repackage, or
relabel human drug products and private label distributors to bar code
their own products and to use the same bar coding standard should
result in a more uniform bar coding system that can be used regardless
of a patient's or hospital's location in the United States (Ref. 15).
Uniformity should also make it easier for health care professionals to
train themselves on bar coding procedures and technique and make it
easier and less expensive for hospitals to buy bar coding equipment.
Uniformity should also make it easier for manufacturers, repackers,
relabelers, and private label distributors to put bar codes on
products, because they would not have to customize their symbols or
[[Page 12504]]
bar codes to meet individual needs. (We discuss issues relating to the
choice of a bar code symbology, standard, or other machine-readable
format, and the potential impact on innovation, in detail in section
II.D of this document.)
B. What Products Would Have to Have a Bar Code? (Proposed Sec.
201.25(b))
1. What Did We Hear at the Public Meeting?
In the June 18, 2002, Federal Register notice (67 FR 41360 at
41361) announcing the public meeting on bar coding, we asked which
medical products should have a bar code. We specifically invited
comment on whether all prescription and OTC drugs should be bar coded,
and we asked about blood products, vaccines, and medical devices (id.).
We wanted our request for comments to help us decide which products
should be covered by the proposal. For example, we sought information
about OTC drugs because we did not know the costs and benefits of
requiring all OTC drugs to have a bar code. For blood, we knew that an
international bar coding standard (ISBT 128) existed, but did not know
whether a rule requiring blood to have a bar code was necessary given
that international standard. For vaccines, we were concerned that bar
coding costs could have an adverse impact on vaccine manufacturers and
vaccine supplies. For devices, our request for information was prompted
by several letters to Secretary of DHHS Thompson, asking him to include
devices in any bar coding rule (Refs. 31, 32, and 33).
The public comments we received reflected a variety of different
positions. For example, almost all comments agreed that prescription
drugs should have a bar code and that the bar code should extend to
products at the unit dose level. However, comments from the
pharmaceutical industry indicated that some products, such as samples,
should not fall within a bar code regulation or that we should allow
for exemptions. The USP also supported an exemption for certain
containers, such as ampules or vials under 5 milliliters (mL).
For OTC drugs, many health care professionals supported bar codes
on all OTC drugs, but other comments, including a comment from a trade
association representing the OTC drug industry, disagreed, stating most
OTC drugs are used in consumer settings where bar codes would not add
value. The trade association also stated that all OTC drug products
intended for retail sale have the universal product code (UPC) on the
outer container and that there could be ``significant potential
negative impact'' if we modified the UPC bar code system on OTC drug
products. In contrast, one manufacturer of OTC drugs supported
requiring bar codes on the outer container, but did not favor requiring
bar codes for certain categories of products that carry little or no
risk of causing adverse drug events in an institutional setting. CHPA
and other companies repeated their concerns about bar codes for OTC
drug products during a meeting with FDA on September 17, 2002, and
emphasized the potential adverse impact on retailers if we required the
UPC code to contain the NDC number. Some comments supported bar codes
on OTC drugs used in hospitals or in ``institutional settings'' or OTC
drugs packaged and sold for use in institutions.
A split between health care professionals and industry also existed
for vaccines. For example, the Centers for Disease Control and
Prevention, which coordinates the VISI program, recommended that
vaccines have bar codes so that information on vaccines could be
readily captured into medical records and other forms, thereby
enhancing the monitoring of immunization programs and surveillance of
adverse effects. Vaccine manufacturers, including VISI members,
expressed a different view, stating that even small bar codes may be
difficult to place on vaccines. One industry comment added that
requiring bar codes on vaccines would ``increase the potential for
disrupting vaccine production lines, particularly if there is a need
for in-line printing'' and that ``[g]iven the fragile nature of vaccine
supply and recent shortages of a number of vaccines, there is concern
that any additional disruptions could exacerbate this situation.''
For blood, the comments generally agreed that we should require bar
codes. Most comments acknowledged that an internationally standardized
bar code symbology (ISBT 128) for blood exists and that the bar codes
describe the blood's identification number, blood group and Rh type,
product number, expiration date and time, and special testing results.
However, while some comments recommended that we require blood
containers to have bar codes using the ISBT 128 symbology, one comment,
representing thousands of blood collection centers, blood banks, and
transfusion services, opposed requiring the use of ISBT 128 through a
regulation. Instead, the comment wanted us to require adoption of a
United States Industry Consensus Standard for the Uniform Labeling of
Blood and Blood Components or ``focus on requiring electronic data
interchange and the definition and use of standard data structures.''
For devices, the comments suggested another split between health
care professionals and the regulated industry. Many health care
professionals and hospital groups supported requiring bar codes on
devices, although some would defer action on medical devices so that
progress on a rule to require bar codes on drugs would not be slowed
down. Others would defer action on medical devices because different
device classes present different levels of risk. Device manufacturers
generally opposed the inclusion of medical devices in a bar coding
proposal. The device industry noted, as we did in our June 18, 2002,
Federal Register notice (67 FR 41360) announcing the public meeting,
that medical devices present different issues compared to drugs,
biological products, and blood. For example, there are different
classes of medical devices, and each class represents a different
degree of risk, so, for a low-risk device (such as a bandage), a bar
code might not have an impact on patient safety (67 FR 41360 at 41361).
As another example, some medical devices may be reconditioned by
parties other than the original manufacturer; in such situations, the
original manufacturer might want to ensure that its bar code is removed
or eliminated if the device is reconditioned, because the device no
longer comes directly from the original manufacturer. Comments from
device industry interests recommended further study and a separate
rulemaking for devices or the voluntary use of ``automatic
identifiers.'' However, one device manufacturer indicated that it
already uses bar codes on its devices, but it uses the bar code for
reimbursement purposes and for logistical reasons rather than for
safety concerns. The manufacturer also recommended that, if we wanted
bar codes on devices, we should issue guidelines instead of a rule.
2. What Products Would the Rule Cover?
After careful consideration of the comments, we propose to require
the following products to carry a bar code:
[sbull] All prescription drug products, including biological
products (including vaccines), but excluding physician samples; and
[sbull] Over-the-counter (OTC) drugs that are dispensed pursuant to
an order and are commonly used in hospitals; and
For blood and blood components, the proposal would require the use
of machine-readable information.
[[Page 12505]]
a. Why Cover Prescription Drug Products, Including Vaccines, But
Not Physician Samples? The comments from the public meeting agreed that
prescription drug products should have a bar code, although a small
number of comments suggested that only prescription drug products used
in institutions should be subject to a bar code requirement and that
prescription drug samples should not be included.
We decided to cover all prescription drug products, rather than
limit the rule to prescription drug products used in institutions,
because we are unaware of any prescription drug products that are not
used in hospitals. Our primary focus is to help reduce the number of
medication errors occurring in hospitals, and, as we consider
``prescription drugs used in institutions'' as being the same as
``prescription drugs'' generally, the proposal refers to ``prescription
drugs.''
However, with regard to prescription drug samples, we decided to
omit prescription drug samples from a proposed bar code requirement
because most samples are given to patients at physicians' offices, and
we do not believe that physicians or patients would have or be inclined
to buy bar code scanners for their own use in the immediate future. We
recognize that an argument could be made for including samples. We know
that some samples are donated to charitable organizations, such as free
clinics, for distribution to patients without charge (Ref. 34). These
samples could be subject to the same medication errors as marketed
prescription drugs, and those medication errors could be prevented
through the use of bar codes. In addition, Congress and FDA have been
concerned about illegal sales of prescription drug samples, the
potential diversion of samples to illegal drug trafficking, and the
entry of counterfeit drugs into the wholesale distribution system.
Requiring bar codes on samples could help identify diverted or
counterfeit drug products that enter distribution through illegal
channels, and this could result in benefits that are not directly
related to the prevention of medication errors.
We recognize that the vast majority of prescription drug samples
are usually given to patients at physicians' offices and are not
administered in hospitals. Because we have no evidence to suggest that
physicians' offices are likely to be equipped with bar code scanners in
the immediate future, the benefits associated with preventing
medication errors through bar codes on prescription drug samples are
unlikely to be realized in this health care setting. We also recognize
that it is unlikely that charitable institutions, such as free clinics,
would have the resources to buy bar code scanners to prevent medication
errors. As a result, we have decided to omit prescription drug samples
from the rule at this time. We do, however, invite comment on whether
to require bar codes on prescription drug samples. Comments should
address the costs and benefits associated with requiring bar codes on
prescription drug samples.
The proposal would apply to vaccines. The National Childhood
Vaccine Injury Act of 1986 (Public Law 99-660) (42 U.S.C. 300aa-25(a))
requires each health care provider who administers a vaccine set forth
in the Vaccine Injury Table to any person to record, in that person's
permanent medical record or in a permanent office log or file, the date
of administration of the vaccine, the vaccine manufacturer, the
vaccine's lot number, and other information. A bar code on vaccines
could help ensure the accuracy of those records insofar as
identification of the vaccine, its manufacturer, and date of
administration are concerned, and, for those vaccines administered in
health care facilities, help ensure that the right vaccine is
administered to the right patient at the right time. However, we are
sensitive to the vaccine manufacturers' concerns, particularly as they
relate to possible adverse impacts on vaccine production or
availability, and we invite comment on the risks and benefits of
including vaccines in a bar code rule.
As for those comments that suggested an exemption for certain
products or small containers, we decline to create an exemption
mechanism and explain our reasons in section II.F of this document.
b. Why Cover OTC Drugs That Are Dispensed Under an Order and
Commonly Used in Hospitals? The public meeting notice asked whether we
should require bar codes on all OTC drugs. After reviewing the
comments, we decided against requiring all OTC drugs to carry a bar
code because it is unlikely that putting bar codes on all OTC drugs
would have a significant impact on reducing medication errors and
offset the large costs associated with requiring bar codes on all OTC
drugs. Most OTC drugs are used outside hospitals and other health care
facilities and are used by consumers who purchase the OTC drugs at
retail. At this point, it is unlikely that individual consumers would
buy, use, or have access to bar code scanners or use such scanners
before taking an OTC drug.
We recognize, however, that some OTC drugs are administered to
patients in hospitals and that bar codes would enable health care
professionals to check whether they are giving the right OTC drug in
the right dose and right route of administration to the right patient
at the right time. In addition, we recognize that OTC drugs could
interact with prescription drugs administered at that hospital or
affect another drug's performance. Thus, we propose to require bar
codes on OTC drugs that are dispensed pursuant to an order and are
commonly used in health care facilities. For example, the bar code on
an OTC drug dispensed pursuant to an order and commonly used in a
hospital may allow a hospital's database to identify any potential
interactions between the OTC drug and any prescription drugs prescribed
for the patient, or may alert a health care professional to the
patient's allergies relative to the OTC drug's ingredients. The
proposal would apply to any manufacturer, repacker, relabeler, or
private label distributor who sells a specific package of an OTC drug
product to hospitals. It would not apply to all packages of a specific
OTC drug product. An example of a specific package of an OTC drug
product sold to hospitals would be an individual product, such as an
aspirin tablet, packaged in a unit-of-use container.
We would interpret ``commonly used in hospitals'' to include OTC
drugs that are sold to hospitals, packaged for institutional use,
labeled for institutional use, or marketed, promoted, or sold to
hospitals through drug purchasing contracts or catalogues. For example,
if an OTC drug product manufacturer sends its catalogues to hospitals
to solicit orders from them, the OTC drug products described in the
catalogue would be ``commonly used in hospitals'' because the
manufacturer is marketing its OTC drugs to hospitals. If a distributor
relabeled an OTC drug ``for institutional use,'' then that OTC drug
would be ``commonly used in hospitals'' because it is intended for
hospital use.
We expect that manufacturers, repackers, relabelers, and private
label distributors would know which of their products meet the
definition of OTC drug products commonly used in hospitals. For
example, we believe that when manufacturers, repackers, relabelers, and
private label distributors label or package their OTC drugs for
institutional use, they know that the products will likely be sold to
hospitals. Manufacturers also know that their OTC drug products will be
sold to hospitals when they market or promote those OTC drugs to
hospital staff through detailing the products or other means, enter
into hospital purchasing contracts, or sell to hospitals through
catalogues.
[[Page 12506]]
We recognize that it is possible for a manufacturer to sell an OTC
drug to a wholesaler or retailer who then re-sells the product, without
making any changes to the product, directly to a hospital without the
manufacturer's knowledge. We believe that, in most cases, the
manufacturer would know that the product may be sold to a hospital
(e.g., because of the product's labeling, packaging). However, there
may be rare instances when the manufacturer may not have had reason to
believe that its product would be sold to a hospital. Therefore, if the
OTC drug is not packaged, labeled, marketed, promoted, or sold to a
hospital as described above, we would not expect the OTC drug's
manufacturer to comply with the bar code requirement.
Proposed Sec. 201.25(b) would also include the phrase ``dispensed
pursuant to an order'' with regard to OTC drugs. Some products in
hospitals that are traditional types of OTC drugs, such as aspirin or
acetominophen, are dispensed pursuant to a physician's order. Other
products that are regulated as OTC drugs are not dispensed pursuant to
a physician's order. For example, a hospital might provide fluoride
toothpaste or mouth rinses to a patient without a physician's order.
Because these products are not likely to contribute to medication
errors, the proposal would focus only on those OTC drugs used in
hospitals that are dispensed pursuant to an order.
We recognize that there may be other ways to describe the types of
OTC drugs that should have a bar code. For example, we considered
requiring bar codes for OTC drugs ``sold directly to hospitals.'' If
the proposal pertained to OTC drugs sold directly to hospitals, most
manufacturers, repackers, relabelers, and private label distributors
who sold their products directly to hospitals would be subject to the
rule, but the bar code requirement could be avoided by selling the OTC
drugs to distributors or other third parties for re-sale to hospitals.
We considered applying the bar code requirement to OTC drugs that are
labeled for use in an institutional setting. This alternative is
equally difficult to administer because it is easily circumvented by
relabeling the drug. We considered requiring bar codes on OTC drugs
commonly used in health care facilities (rather than hospitals), but
could not determine whether clinics, nursing homes, and other
facilities would invest in bar code scanning equipment.
We specifically invite comment on the terms we should use to
describe OTC drugs that should be subject to the bar code requirement.
Comments should also consider the following issues:
[sbull] Who should be required to apply the bar code on the OTC
drugs that are subject to a bar code requirement? If the proposal
refers to OTC drugs ``commonly used in hospitals,'' will manufacturers,
repackers, and relabelers know which products require a bar code?
[sbull] Do the terms ``dispensed pursuant to an order''
sufficiently distinguish between those OTC drugs that are likely to be
involved in medication errors from those that are not?
c. Which Blood Products Are Covered? Current FDA regulations state
that the container label on blood and blood products ``may bear encoded
information in the form of machine-readable symbols approved for use by
the Director, Center for Biologics Evaluation and Research'' (see 21
CFR 606.121(c)(13)), but they do not require the use of such symbols
nor do they specify a particular symbol. Correct identification of
blood is essential because transfusion errors or use of contaminated
blood can have serious adverse health consequences for a patient. For
example, one comment submitted in response to the public meeting stated
that transfusion errors cause as many as two dozen patient deaths
annually and that the number may be under reported. Consequently, we
propose to require that blood and blood component container labels bear
``encoded information that is machine-readable'' and approved for use
by the Director of CBER. We address this specific requirement at
proposed Sec. 606.121(c)(13), which we discuss more fully in section
II.H of this document.
d. Why Did We Omit Medical Devices From the Rule? At this time, we
are omitting medical devices from this rulemaking. We recognize that
different issues arise for devices than for drugs, so further
consideration is needed regarding the need for putting bar codes on
medical devices. We will continue to study whether to develop a
proposed rule to require bar codes on medical devices to prevent or
reduce medication errors.
C. What Would the Bar Code Contain? (Proposed Sec. 201.25(c)(1))
1. What Is the National Drug Code Number, and Why Would It Be Helpful?
Proposed Sec. 201.25(c)(1) would require the bar code to contain,
at a minimum, the drug's NDC number. The NDC number identifies each
drug product that is listed under section 510 of the act. Most persons
attending the public meeting agreed that a bar code should, at a
minimum, contain the drug's NDC number.
To complement this proposed requirement, we intend to revise our
drug establishment registration and listing regulations to redefine the
NDC number and to make the NDC number unique and more useful to
informational databases, whether those databases are created for
purposes of preventing medication errors, obtaining the latest
information about a specific drug, or tracking drug use or
distribution. We hope to publish a proposed drug establishment
registration and listing rule in the Federal Register soon.
Please note that proposed Sec. 201.25(c)(1) would require the bar
code to contain, at a minimum, the NDC number. Several comments
submitted in response to the public meeting indicated that some drug
manufacturers already place bar codes on their products, but that the
bar code contains a numerical identifier that contains, but is not
identical to, the NDC number. For example, some comments suggested that
the bar code contain the International Article Number (EAN) or the
Global Trade Item Number (GTIN). We are aware that some drug companies
already use a bar code containing the:
[sbull] Universal Product Code number (UPC). The UPC is usually a
12-digit number that may or may not contain the NDC number within it.
For example, if the drug's NDC number were 1234567890, the UPC number
might be 312345678906, where the first digit (3) signifies that the
product is a drug, and the last digit is a ``check digit'' that helps
confirm that the bar code was read correctly. However, some drugs,
particularly OTC drugs, may have a UPC number that does not contain the
NDC number;
[sbull] International Article Number (EAN). The EAN is a 13-digit
number and also contains the NDC number within it; or
[sbull] Global Trade Item Number (GTIN). The GTIN is a 14-digit
number that contains the NDC number in conjunction with a code that
identifies the product's packing level. In the GTIN, the first digit
signifies the packaging level.
Thus, under the proposal, the bar code could contain the NDC number
alone or the UPC number, EAN number, or GTIN number, as long as the NDC
number is present. By making the NDC number the minimum bar code
information requirement, firms could continue using various numbering
systems (such as the UPC, if the UPC number contains the NDC number,
EAN, or GTIN numbers) in their bar codes, thus minimizing or
eliminating the need for companies to redesign or generate new bar
codes and
[[Page 12507]]
minimizing any disruptions to the companies' international markets.
We recognize that some comments supported the use of a unique
identifying number rather than the NDC number. One comment explained
that the UPC code that goes on the product label does not always use
the NDC number, so if we required the bar code to contain the NDC
number, important label changes could go unnoticed if health care
professionals relied on the bar codes instead of product labels. The
comment suggested that if distributors establish the unique identifying
codes and revise those codes when they make label changes, the revised
code could then trigger a need for a health care professional
administering the drug to read the label and to update its database
accordingly. Another comment described the NDC number as a ``dumb
number'' in OTC drugs and suggested following UCC/EAN guidelines
instead to identify the product. Another comment stated that OTC drugs
should use the UPC number instead of the NDC number because changing
UPC bar codes to include the NDC number would result in great expense
without a discernable benefit. Additionally, during a meeting with CHPA
and others, the industry representatives stated that UPC codes do not
always contain NDC numbers, and retailers rely on the UPC codes, so
requiring the use of NDC numbers would be disruptive to the industry
and retailers. The industry representatives suggested using a unique
identifier other than the NDC number.
We decline to require the use of unique identifying numbers other
than the NDC number. Through the proposed drug establishment
registration and listing rule, the NDC number would become a unique
identifying number for listed drugs and correspond to a particular
listed drug. If we allowed distributors to assign unique identifying
numbers and did not coordinate the assignment of such numbers to drugs,
the result could be extremely confusing as distributors could use
different identification schemes (such as a mixture of letters,
numbers, or other characters). Moreover, creating and maintaining
databases on drug products for medication error purposes would become
more difficult because identifying information would have to come from
multiple sources. For example, the Federal Government might be the
source for NDC number information, but firms who created unique, non-
NDC identifying numbers would have to provide information on those
numbers to the databases themselves if the databases are to be complete
and useful. Multiple information sources would increase the likelihood
that some information and databases might not be updated as frequently
as others, that some information might be unavailable, or that the
information would be presented in different or incompatible ways. While
we understand the OTC drug industry's reservations about changing UPC
codes to include NDC numbers because of a possible impact on retailers,
proposed Sec. 201.25(b) would only require bar codes on OTC drugs that
are dispensed pursuant to an order and are commonly used in hospitals,
so most OTC drugs should not be affected.
2. Would the Bar Code Be Required to Contain the Lot Number and
Expiration Date?
Many organizations and individuals have recommended that the bar
code contain information regarding the drug's lot number and expiration
date, and others have recommended phasing-in a requirement to have the
bar code contain the lot number and expiration date.
We decline to require lot number and expiration date information in
the bar code at this time. In general, while lot number and expiration
date information would make it easier to identify drugs that had been
recalled or were expired, we neither found nor received data to show
that the benefits of bar coding lot number and expiration date
information would exceed the costs of putting that information in the
bar code. There is, however, limited information on the extent to which
patient safety is affected by and medication errors occur as a result
of taking expired or recalled drugs. We reviewed data from our adverse
event reporting system (containing 71,546 cases) and found 90 cases
where patients received an expired drug and 21 cases where patients
received a recalled drug. Expired drugs may become subpotent and might
not have the intended therapeutic effect. They also may contain
degradation products associated with aging. Products may be recalled
for a variety of reasons including no active ingredient present in the
product or contamination of the product that could lead to infection.
We also tabulated data from the Office of Compliance, Center for
Drug Evaluation and Research, on the reasons for and the extent to
which drug products have been recalled from the market. From fiscal
year 1997 through fiscal year 2002, there were 1,230 recalls, of which
97 were Class I (reasonable probability that the use or exposure to the
violative product will cause serious adverse health consequences or
death) and 1,133 were Class II (use or exposure of the violative
product may cause temporary or medically reversible adverse health
consequences or where the probability of serious adverse health
consequences is remote). Despite this number of recalls for safety and
health reasons, we received few reports of adverse events associated
with the administration of a recalled drug, and we do not have reliable
data that show how often these products were administered to patients.
Thus, based on the data available to us, we cannot determine the
magnitude of the public health problem associated with administering
expired or recalled products, and we cannot quantify the patient safety
benefit associated with requiring lot number and expiration date
information in a bar code.
Some comments suggested that requiring lot number and expiration
date information in a bar code could have benefits outside the
medication error context by making it easier to track or trace products
and to identify counterfeit products.
We agree that bar codes may be useful outside the medication error
context, but our rule focuses on the use of bar codes to prevent
medication errors.
Industry comments indicated that adding lot number and expiration
date information to the bar code would adversely affect production line
speed. One comment from a drug company predicted that encoding lot
number and expiration date information would reduce packaging line
speed by 40 percent and cost more than $4.8 million for its product
lines. Another drug industry comment indicated that a requirement to
encode lot number and expiration date information could cause companies
to reconsider their packaging choices, or require companies to alter
their printing methods.
We also note that inclusion of lot number and expiration date
information might require the use of a different machine-readable
format, such as a two-dimensional symbology, in addition to or as a
substitute for a linear bar code, and that could affect a hospital's
equipment purchasing decision. Use of nonlinear bar code formats could
require the purchase of a different scanning or reading device and also
increase a hospital's equipment costs.
Based on the evidence we had and our obligation under Executive
Order 12866 to choose regulatory approaches that maximize net benefits,
the potential burden of encoding lot number and expiration date
information appeared to outweigh the potential benefit at this time.
Consequently, the proposed rule
[[Page 12508]]
would not require lot number and expiration date information in the bar
code. We will continue to study the issue and invite comments and, more
importantly, data on costs and benefits associated with requiring lot
number and expiration date information in the bar code. If comments
provide information and data to support requiring lot number and
expiration date information, we may consider requiring that information
with the bar coded NDC number as part of a final rule.
Although the proposed rule would not require the drug's lot number
and expiration date to appear in the bar code, the proposed rule would
not prohibit the inclusion of such information. In other words, FDA
will not object if a manufacturer, repacker, relabeler, or private
label distributor were to add the lot number and expiration date to its
bar code or add such information in a machine-readable format provided
that the lot number and expiration date information is accurate. In a
meeting with PhRMA on August 19, 2002, the industry representatives
suggested to us that they might add machine-readable lot number and
expiration date information if a demand existed for it. (We have placed
a memorandum of this meeting in the docket for this rule, along with
memoranda of meeting for other meetings we attended.) We do not know
how much more such drugs would cost (compared to drugs that only had
the NDC number encoded in the bar code) or whether hospitals and other
health care facilities would be willing to pay more for drugs that have
the NDC number, lot number, and expiration date in a bar code or
machine-readable code, but the meeting raises the possibility that
market forces could lead to the inclusion of lot numbers and expiration
dates in bar codes or other machine-readable formats.
D. Would the Rule Require a Specific Type of Bar Code? (Proposed Sec.
201.25(c)(1))
1. What Did We Hear from the Public Meeting?
In the public meeting notice, we asked whether we should require
the use of a specific bar code symbology, such as reduced space
symbology (RSS), adopt one symbology over another, or allow for
``machine readable'' formats (67 FR 41360 at 41361). We also asked for
the ``pros and cons'' of each approach (id.). We had identified RSS as
a possible symbology because we knew about industry-conducted pilot
studies that used RSS bar codes on small vials (Ref. 35). Our reasoning
was that if RSS symbology could be used on small containers, it could
be used on larger containers, too.
The comments we received reflected an array of differing opinions,
ranging from the adoption of a specific, non-bar code technology to
prescribing no specific symbology or standard at all in order to
promote innovation. Two principal, yet contradictory, themes emerged.
One view advocated requiring a specific symbology or standard to
promote uniformity and to create the conditions whereby hospitals could
invest confidently in bar code scanning equipment, without having to
buy different pieces of equipment to read different bar codes or other
machine readable formats or without having to fear that any equipment
purchases would soon become obsolete. Another comment declared that the
bar code symbology adopted by FDA should be compatible with current
scanning devices used by health care organizations. However, if the
rule adopted a single symbology or standard, the rule could affect
future innovation in this field, and we would have to engage in new
rulemaking to adopt any newer symbology or standard.
The other view stated that we should not select any specific
symbology or even require linear bar codes at all; instead, these
comments said the rule should require the use of machine-readable or
automatic identifier technology, thus creating the conditions under
which newer, and perhaps better, technologies could be used in the
future. However, the comments and our own analysis suggested that if
the rule allowed for multiple symbol types or technologies, hospitals
might be confronted with incompatible technologies and decide against
buying multiple pieces of equipment. For example, if one drug used an
RSS bar code, another used a radio frequency identification format, and
a third used a unique, patented, automatic identification technology, a
hospital would have to decide whether to buy a bar code scanner, a
device to detect the radio frequency information, and a device to
detect the patented identifier, or some combination of the three
devices. If those costs were too great, the hospital could decide
against making any equipment investments altogether, and the benefits
from bar coding would not be realized.
Other comments suggested that we require the use of machine-
readable codes capable of being read by ``machines currently deployed''
and ``economically available'' or use symbology that is ``compatible''
with ``current scanners.''
Some comments suggested that we conduct research to develop time
lines for adopting specific bar code symbologies, that we have USP
provide bar code standards, or adopt a standard or family of
symbologies. Other comments said we should form a group involving
various interests to study issues further or create an ``automatic
identification coordinating council'' to ensure that minimum
information requirements are met and that the best technology is used.
Deciding whether to require a specific symbology, standard, or an
unspecified ``machine-readable'' symbol was a very difficult decision
because of the comments' competing and sometimes incompatible
positions. For guidance, we examined how another Federal agency reached
a decision when confronted with an analogous problem of whether to
require a particular action to accomplish a specific goal or to let
market forces decide the outcome. We examined how the Federal
Communications Commission (FCC) decided to adopt an order to require
all television receivers to include digital television (DTV) reception
capability in order to move towards a 2006 target date for a transition
to digital television. Congress had imposed a December 31, 2006, target
date for the return of the spectrum used by broadcasters for analog
channels unless 85 percent of homes in a market could not receive local
digital broadcast television signals. The FCC faced a problem; the
public was reluctant to buy DTV receivers until there were DTV stations
offering attractive DTV programs, but broadcasters lacked the incentive
to provide such DTV programming in the absence of an audience that
would attract advertisers (Ref. 36 at p. 13). Moreover, because analog
televisions were still being sold, each sale of an analog television
set put the FCC farther from reaching the 85 percent DTV reception goal
(Refs. 37 and 38). The FCC ultimately decided to adopt a plan to
require DTV tuners on almost all new television sets by 2007 and
established a 5-year rollout schedule to minimize costs to television
manufacturers and consumers. It recognized that requiring the
manufacture of DTV receivers would address ``the root cause of the
problem, namely the lack of television receivers capable of receiving
DTV signals'' (Ref. 36 at p. 13). The FCC also recognized that, without
its intervention, the transition to DTV might remain stalled. The FCC's
decision to require all television receivers to include digital
television (DTV) reception capability is
[[Page 12509]]
even more noteworthy because some FCC Commissioners did not favor
significant regulatory intervention in the market (Ref. 38 at p. 1).
Our case is similar to the FCC's in the sense that we have an
objective (reduction of medication errors) that can be achieved through
bar codes, but hospitals are reluctant to invest in equipment because
of the lack of bar coded products, and manufacturers, repackers,
relabelers, and private label distributors are reluctant to invest in
such bar codes or other technologies in the absence of a demand by
hospitals or a requirement for such bar codes. If we fail to specify a
particular measure, such as a symbology or standard, progress towards
medication error reduction through bar codes could remain stalled;
hospitals might still be reluctant to invest in equipment because of
uncertainties in the marks, symbols, or technologies used on the drug
or a limited amount of resources to buy different types of equipment to
read the various marks, symbols, or other technologies. Likewise,
manufacturers, repackers, relabelers, and private label distributors
might not invest in bar codes or other technologies because no demand
would exist or because their investments in such bar codes would be
wasted if hospitals declined to buy the necessary equipment to take
advantage of those bar codes or other technologies.
Consequently, proposed Sec. 201.25(c)(1) would require the bar
code for drugs and biological products (other than blood and blood
products) to be any linear bar code in the UCC/EAN standard. This means
that the bar code can be any linear bar code symbology, such as UCC/
EAN-128, RSS, or UPC (if the UPC contains the NDC number), within the
UCC/EAN standard. Adopting a linear bar code in the UCC/EAN standard,
as opposed to a specific bar code symbology, should give firms some
flexibility in selecting the bar code symbology that best fits their
needs and should also give the rule some flexibility as linear bar code
symbologies change, are added, or are phased out. For example, we know
that the UCC has announced a ``sunrise'' date of 2005 for a new EAN-13
code because the commonly-used UPC code is running out of new company
prefixes for that 12-digit code (Ref. 39). So, as new linear bar codes
are added to the UCC/EAN standard, those new codes would be acceptable
under the proposed rule as long as those new codes include the NDC
number.
The UCC/EAN standard also has the advantage of being a widely used
global standard. One comment submitted on behalf of the International
Working Group on Barcoding of Pharmaceuticals advocated the use of the
UCC/EAN standard because it represents a ``validated, testable global
standard.'' The comment also suggested that regulatory authorities from
Europe, Japan, and Canada are actively pursuing a bar code standard for
pharmaceuticals and ``are watching to see what the FDA decides.''
Comments from the UCC, EAN, and some pharmaceutical interests also
mentioned the global applicability of the UCC/EAN standard.
We recognize that other bar code standards exist, notably those
advanced by the Health Industry Business Communication Council (HIBCC).
HIBCC bar code symbologies include code 39 and code 128. (The UCC/EAN
system also has a UCC/EAN-128 symbology that is similar, but not
identical, to the HIBCC code 128.) HIBCC also has the Universal Product
Number (UPN) system which is used for medical and surgical products.
Comments from drug and biological product companies, however, usually
referred to UCC/EAN standards if they identified any standard at all,
so we presume that the use of UCC/EAN standards would be less
disruptive to those industries compared to requiring the use of a
different bar code standard. However, a comment from HIBCC suggested
that some drugs may use HIBCC bar codes, that medical devices, in
particular, are ``uniquely identified by the UPN number,'' and that the
Department of Defense, Veterans Administration, and other organizations
use the UPN numbering system. Therefore, we cannot preclude the
possibility that some drug firms and organizations may use or prefer to
use HIBCC bar codes, so we invite comment as to whether the rule should
refer instead to linear bar codes without mentioning any particular
standard or refer to UCC/EAN and HIBCC standards.
Our position presumes that, by the time any final bar code rule
becomes effective (assuming that we do issue a final rule), bar code
scanners will be able to read different UCC/EAN linear bar code
symbologies reliably and efficiently. This is a critical consideration
because the proposed rule's benefits are realized only if hospitals
invest in bar code scanners, and we reiterate that their willingness to
make that investment may depend on the number of different bar code
symbologies that will be used and the ability of bar code scanners
(particularly those scanners already in use at the hospitals) to read
different symbologies. Comments from the public meeting disagreed on
what capabilities different bar code scanning technology had to read
different symbologies. Some comments suggested that new bar code
scanners can read different linear bar code symbologies, particularly
those in the UCC/EAN standard. In contrast, others suggested that bar
code scanners may be unable to read newer bar code symbologies or that
older scanners cannot read new symbologies or composite codes. Our
understanding is that scanner capability depends on how the scanner is
programmed (because scanners are programmed to read individual
symbologies) and whether scanners can be upgraded or modified to read
new symbologies. For example, some bar code scanners might be
programmed to read the most commonly used linear bar codes and might
not be able to read the RSS symbology. Some scanner manufacturers may
be able to upgrade or modify an existing scanner to read newer
symbologies, while other scanners, due to their age or the manner in
which they were made, might not be capable of being upgraded. We invite
further comment on this point.
As for non-bar code technologies, we know that other technologies
exist or are under development, but we decline to specify the use of
DataMatrix or other nonlinear bar code formats or technologies, such as
radio frequency identification (RFID). We realize that other
technologies may be able to encode more data or be more versatile
compared to linear bar codes. For example, in a meeting with the
National Alliance for Health Information Technology, we heard how RFID
could be used to facilitate inventory control and to track individual
items because each RFID tag would have its own unique ``electronic
product code'' (EPC) consisting of a header code, an ``EPC manager''
that would probably identify the product's manufacturer, an ``object
class'' that would refer to the product type, and a ``serial
identifier'' that would be unique to each individual item. RFID's
ability to track individual items could help drug companies and public
health agencies identify and eliminate counterfeit drug products.
However, the costs associated with RFID tags and readers could be
significant; literature provided by the Auto-ID Center conceded that
current RFID tags are ``fairly expensive'' and that a firm might have
to purchase more than one reader if multiple RFID frequencies exist
(Ref. 40). A representative from the Auto-ID Center stated that the
``target cost'' is five cents per RFID tag, so the technology could
become more available and less expensive in the future.
Nevertheless, we find that linear bar codes are sufficient for
encoding NDC
[[Page 12510]]
numbers, and hospitals that already have or intend to buy linear bar
code scanners might not have to upgrade those scanners or purchase new
devices if the proposed rule would require the use of linear bar codes
only. In contrast, if we were to allow for other technologies such as
RFID or even two-dimensional symbols such as DataMatrix, hospitals
might have to buy RFID readers, optical scanning equipment, or other
equipment because linear bar code scanners may be incapable of reading
other technologies and, depending on the particular scanner, may be
incapable of being upgraded. However, we invite comment on whether the
rule should adopt a different format (whether that format is a
symbology, standard, or other technology), and recommend that any
comments advocating the use of a different model consider and discuss
the following issues:
[sbull] What other symbol, standard, or technology should we
consider, either in place of a linear bar code or in addition to it?
How accepted is that symbol, standard, or technology among firms that
would have to affix or use that symbol, standard, or technology? For
example, we know that RFID technology has great potential for encoding
a lot of data and for identifying individual products, but the
technology is not yet widely accepted in the pharmaceutical industry
due to its novelty and costs.
[sbull] Will hospitals be able to read or use the symbol, standard,
or technology, either with existing equipment or equipment under
development? We reiterate that hospitals might not have the financial
resources to buy multiple pieces of equipment to read multiple,
incompatible formats, so hospitals must be able to make equipment
purchasing decisions confidently, knowing that they will recapture
their investment costs.
Insofar as drug products are concerned, we also decline to have the
proposal refer to the use of machine-readable codes or symbologies that
can be read by machines ``currently'' used. Although a reference to
``machine-readable'' symbols or to ``current'' technology might seem to
make a rule more accommodating to future technological developments,
words such as ``machine-readable'' and ``current,'' when used in a
regulation, can create several practical difficulties. For example, in
the absence of an accepted standard or process, disputes could arise as
to how we or any other person or group determines what is ``current.''
A manufacturer who wants to use a novel bar code or symbol could get
different answers depending on whom it consulted; a hospital using
linear bar code readers might find the novel code incapable of being
read by its ``current'' scanners, whereas the firm marketing a new
machine to read the novel code would argue that the novel code is
``machine-readable'' by ``current'' machines. Similarly, if only a
fraction of the machines used in hospitals can read a new code, a
hospital might argue that the new code cannot be read by ``current''
machines, yet, if machines were or could be upgraded or modified, a
firm that marketed the machines or upgrade service might argue that the
new code can, indeed, be read by current machines, provided that
upgrades or modifications are made. These and other potential problems
associated with a reference to ``current'' machines or ``machine-
readable'' technology lead us to avoid using such terms in this
proposal. (Different considerations apply for blood and blood products,
and we discuss the proposed requirement for machine-readable symbols
for blood and blood product containers at section II. H of this
document.)
Furthermore, we decline to establish committees or other bodies to
study the issue further or to decide technological issues. Given the
comments we have received thus far, we have no assurance that a
committee or other body would arrive at a consensus.
Nevertheless, if a group comprised of the affected industries and
persons who would use the bar code could agree on a standard,
symbology, or technology, we would be interested in learning about such
standard, symbology, or technology and its costs and benefits. We would
carefully review the information and consider the information when
drafting a final rule.
2. Are There Any Specific Requirements for the Bar Code?
Proposed Sec. 201.25(c)(1)(i) and (c)(1)(ii) would require the bar
code to be surrounded by sufficient blank space so that the bar code
can be scanned correctly and to remain intact under normal conditions
of use. These requirements would help ensure that the bar code can be
read easily and accurately so that its safety benefits may be realized.
We note that today some manufacturers have bar codes at locations where
the bar codes are destroyed, damaged, or otherwise rendered useless.
For example, some manufacturers have put bar codes on individual foil-
wrapped packets, but the bar code overlaps the folds or perforations
that separate the foil-wrapped packets. When one packet is separated
from the others, the bar code is split into pieces, and the resulting
bar code fragments can provide misleading or nonsensical information to
the bar code scanner or might not be read at all by the scanner. So,
the proposed rule would require the bar code to be placed in a manner
so that it remains intact during normal conditions of use. For the
foil-wrapped packet example, this would mean that the bar code would be
placed away from folds or perforations so that each packet, when
separated from the others, has its own intact and easily scanned bar
code.
Note, too, that the proposal would include the phrase ``under
normal conditions of use.'' Depending on the packaging and container
used, the ``normal conditions of use'' may or may not require the bar
code to remain intact at all times. For example, assume that you have a
tablet in a blister package and that the bar code is printed on the
flat side of the blister package. If the bar code is scanned before the
tablet is pushed through the flat side, the bar code would not remain
``intact'' after the tablet has been dispensed, and this would be
acceptable because, under ``normal conditions of use,'' the bar code
would have already served its purpose by being scanned before the drug
was dispensed. In contrast, assume that you have a bottle that contains
multiple tablets. The bar code on the bottle, under proposed Sec.
201.25(c)(1)(ii), would have to remain intact throughout the bottle's
use so that the bar code could be scanned each time a tablet is
dispensed from that bottle.
One comment said we should audit bar code quality, help industry
build a bar code information infrastructure, publish our results, and
support mandatory testing and verification of bar codes.
We decline to adopt the comment's suggestions. The bar code would
be part of the drug's label, so issues concerning its quality and
verification would be subject to current good manufacturing practices
(GMP's). In general, persons who would be subject to the bar code
requirement would be responsible for having written procedures for the
receipt, identification, storage, handling, sampling, examination, and/
or testing of labeling and packaging materials, for exercising control
over labeling materials and label operations, and for ensuring that
correct labels are used (see 21 CFR 211.122, 211.125, 211.130). Failure
to meet GMP's will cause a drug to be considered adulterated under
section 502(a)(2)(B) of the act.
We also note that there are various standards relating to bar codes
already. For example, the American Society for
[[Page 12511]]
Testing and Materials has a standard procedure for bar code
verification (Ref. 41). The International Organization for
Standardization has various standards for automatic identification and
data capture techniques, and several deal with bar code quality and
symbologies. The UCC has guidelines on bar code placement and other
documents on specific symbologies or quality matters. Given these
standards and other documents, as well as the comparatively greater
expertise of standards organizations in this area, we do not intend to
develop our own guidance documents regarding bar code details such as
quality, verification, or testing.
The bar code can also be used to access the medication information
found in the professional labeling of a specific drug product. We are
currently working on a collaborative initiative with the National
Library of Medicine and the Department of Veterans Affairs to create a
collection of up to date, computer readable electronic labels for
marketed drug products called the ``DailyMed.'' By linking the NDC to
the appropriate label in the DailyMed, people will be able to use
computer systems to access important medication information simply by
scanning the bar code found on the drug package. This could help locate
proper dosage instructions, identify drug interactions, and find other
information necessary for the safe use of medications.
E. Where on the Label Would the Bar Code Appear? (Proposed Sec.
201.25(c)(2))
In the public meeting notice, we asked where the bar code should be
placed. We asked if there were benefits to placing bar codes on
immediate containers and if there was a way to distinguish whether
certain containers with a bar code would have a more significant effect
on preventing medication errors than other containers (67 FR 41360 at
41361).
Some comments suggested that the bar code go on every package level
down to the unit-of-use or unit dose. Other comments recommended
placing the bar code on the ``immediate container'' or unit dose or
unit-of-use package only.
In contrast, one comment expressed surprise that we would even
consider putting bar codes on unit dose or unit-of-use packages because
of the potential impact on manufacturers.
Several comments also disagreed as to whether we should specify
where a bar code should appear on a particular package. For example,
one comment recommended that we draft guidelines for bar code
placement; the guidelines would consider ergonomics, scanner types,
symbologies, and packaging. Another comment would require the bar code
to be placed where ``the typical user of the scanning device can
reliably and consistently scan it.''
In contrast, other comments stated that we should not restrict the
bar code's placement on a package because differences relating to
package size, shape, and material demand flexibility as to the bar
code's placement.
Proposed Sec. 201.25(c)(2) would require the bar code to appear on
the drug's label. Section 201(k) of the act defines ``label'' as ``a
display of written, printed, or graphic matter upon the immediate
container of any article; and a requirement made by or under authority
of this act that any word, statement, or other information appear on
the label shall not be considered to be complied with unless such word,
statement, or other information also appears on the outside container
or wrapper, if any there be, of the retail package of such article, or
is easily legible through the outside container or wrapper.'' Thus, by
requiring the bar code to be on the drug's label, proposed Sec.
201.25(c)(2) would result in bar codes on the drug's immediate
container label as well as the outside container or wrapper, unless the
bar code is easily legible and machine-readable through the outside
container or wrapper.
We decline to adopt the comments' positions to require bar codes on
all packages or only on immediate containers because that would either
result in too many products being bar coded or too few. For example, if
we required every package to bear a bar code, then arguably a shipping
container of drugs would have a bar code, even though no hospital would
dispense a drug directly from a shipping container to a patient, and a
bar code on the shipping container would have no impact on medication
errors. (The bar code could help with inventory control and tracking,
but such matters are outside the scope of this proposed rule.) If we
required only the immediate container (which is the container that is
in direct contact with the drug at all times) to have a bar code, then
patients receiving multiple-unit containers (such as a box holding
blister packed tablets) would be vulnerable to medication errors
because the multiple-unit container would not have a bar code.
As the previous paragraph suggests, there may be more than one bar
code on a product depending on the package and whether it has a unique
NDC number. For example, assume that you make drug tablets that are
individually packaged in a plastic blister pack and then boxed in a
cardboard container. If the individually packaged tablets have a unique
NDC number, then each individual blister pack would have a bar code.
The cardboard container holding the blister pack would have to have a
bar code, too, because the cardboard container would be an ``outer
container'' within the statutory definition of ``label.''
Although proposed Sec. 201.25(c)(2) would not require the bar code
to appear at a specific location on a product, proposed Sec.
201.25(c)(1)(ii) would require the bar code to remain intact under
normal conditions of use. The latter requirement may influence the bar
code's location.
F. What Would Happen if a Bar Code Could Not Be Put on a Product?
The proposed rule would not contain an exemption provision. We are
aware of industry-conducted pilot studies that have placed RSS bar
codes on small vials (Ref. 35). These pilot studies suggest that almost
all products are capable of bearing a bar code. However, some comments
from the public meeting suggested that small products might not be
capable of bearing a bar code and recommended that we allow for
exemptions.
We decline to create an exemption provision because we believe that
almost all products are capable of bearing a bar code. In addition,
exemption provisions sometimes create unintended administrative
problems and consume agency resources as some individuals or firms may
be tempted to submit exemption requests notwithstanding their ability
to comply with a particular regulatory requirement. For example, if we
were to create a general exemption provision, a firm whose drug product
was packaged in a small vial might seek an exemption even though it
could use a RSS linear bar code on that vial. If we tried to impose a
limitation on the exemption, such as allowing for possible exemptions
if it would not be technologically feasible to affix a bar code on the
label, a firm might argue over whether economic or other considerations
determined whether a bar code was technologically feasible. In the end,
we could be obliged to devote resources to reviewing, deciding, and
perhaps re-examining exemption requests, and we can avoid that
potential drain on FDA resources by not creating an exemption
provision. We invite comment as to whether any specific product or
class of products should be exempt from a bar code requirement and the
reasons why such an exemption is considered to be necessary. We also
invite comment on
[[Page 12512]]
how we might create a waiver provision that would minimize the
potential for misuse of the waiver. We will consider whether to
incorporate specific exemptions into the rule.
G. What Is the Proposed Implementation Plan?
If we issue a final rule to require bar coding, we would require
bar codes on human prescription drugs and OTC drugs dispensed under an
order and commonly used in hospitals within three years after we
publish the final rule in the Federal Register. The 3-year period would
give affected parties time to obtain NDC numbers, if necessary, exhaust
supplies of existing labels, and make new labels that contain the bar
code or machine-readable information.
Additionally, because the bar code's addition to a label would be a
ministerial act that would not require us to exercise any judgment as
to the information being presented, we intend to have firms whose drug
products are already approved or marketed notify us about the addition
of the bar code to their product labels through an annual report (see
Sec. 314.81(b)(2)(iii) (21 CFR 314.81(b)(2)(iii) and 601.12(d)). For
marketed OTC drugs, there is no comparable, routine reporting
requirement if the drug is not the subject of an approved new drug
application, and we do not intend to impose any reporting obligation
relating to bar codes on OTC drugs.
We recognize that the bar codes' ability to prevent medication
errors depends on many external factors outside this rule, such as the
availability of bar code scanners, computer software that can process
the bar code information and compare it against patient information,
training health care professionals to use scanning equipment, and the
willingness of hospitals to invest in bar code scanning equipment.
However, requiring bar coding on human drugs is a necessary ``first
step'' for promoting the use of technology to combat medication errors
(Ref. 42).
We also acknowledge the various comments from the public meeting
suggested different implementation periods for this rule. In general,
some comments suggested short implementation dates measured in months
whereas other comments suggested implementation dates measured in
years. A few comments suggested different implementation dates for
different products or would have the implementation date depend on the
product's potential for harm. Several comments recommended requiring
bar codes to contain the NDC number first, and require the lot number
and expiration date at some future date.
We decided on the 3-year implementation date to give affected firms
time to redesign their labels and exhaust pre-existing label stocks and
to give hospitals time to decide which scanning devices or systems to
develop or purchase. Additionally, as we suggested earlier, we want to
give hospitals more time to decide whether they would be willing to
work with pharmaceutical firms to have other information (such as lot
number and expiration date) encoded. While we believe the 3-year
implementation date is appropriate, we invite comment on whether the
implementation period can and should be shortened.
We decline to create a ``phased-in'' implementation system whereby
we would require the NDC number first, and then require inclusion of
lot numbers and expiration dates at a future time. As we explained
earlier in section II.C.2 of this document, we lack data that would
support requiring lot numbers and expiration dates on bar codes at this
time. While we will not object if firms volunteer to encode such
information (assuming that they encode the correct information), we
will not require or specify any implementation period for the encoding
of lot number and expiration date information.
H. How Does This Rule Apply to Blood and Blood Components? (Proposed
Sec. 606.121(c)(13))
Like medication errors, errors involving blood transfusions can
result in serious injury or death. For example, one study examined
reported transfusion errors occurring between January 1, 1990, and
December 31, 1999, from approximately 256 transfusion services in New
York (Ref. 43). The study focused on reports involving the
administration of a unit of blood to someone other than the intended
patient or the issuance of incorrect blood because of a blood bank or
phlebotomy error. During the study period, nine million red blood cell
and whole-blood units were transfused, and 659 cases of erroneous
administration were observed, for a frequency of 1 error per 14,000
transfusions. Five cases resulted in fatalities, at a rate of 1 per
1,800,000 units. In cases where the patient received an incompatible
unit, nearly half (47 percent) suffered no ill effects, but 41 percent
of the cases resulted in an acute hemolytic reaction, and 2 percent
resulted in fatalities (id.) The most common error outside blood banks
was administering properly labeled blood to a patient other than the
one for whom the unit was intended (37 percent). In blood banks, the
study identified issuance of the wrong unit (4 percent) and testing
errors (7 percent) as some common errors (id.).
Current FDA regulations, at 21 CFR 606.121(c)(13), state that the
container label for blood and blood components ``may bear encoded
information in the form of machine-readable symbols approved for use by
the Director, Center for Biologics Evaluation and Research.'' The
reference to ``machine-readable symbols'' in Sec. 606.121(c)(13) was
intended to be flexible and accommodate changes in machine-readable
technologies. For example, FDA recognized the use of Codabar (a
specific bar code symbology) in 1985, and, in 2000, approved the use of
ISBT 128, version 1.2.0 (Ref. 44).
Unlike the situation for other prescription drugs, there is already
substantial use of bar codes for blood and blood products. Most blood
establishments currently use machine-readable symbols or ``ABC
Codabar'' on their blood and blood component labels. In August, 1989,
the International Society for Blood Transfusion (ISBT), an organization
established to promote and maintain a high level of ethical, medical,
and scientific standards in blood transfusion medicine and science
throughout the world, recognized that ABC Codabar, the first bar coding
system adopted by the health care industry, was becoming outdated and
initiated the design of a new system using the bar code symbology which
eventually became known as ISBT 128.
In December, 1996, the International Council for Commonality in
Blood Bank Automation (ICCBBA) held an ISBT 128 Consensus Conference in
Washington, DC, to provide an opportunity for dialogue among the
affected industry groups and FDA. Although there was a consensus for
use of ISBT 128, some participants expressed concerns regarding
implementation time frames and costs of implementation to hospital
transfusion services. However, ISBT 128 has numerous advantages over
the ABC Codabar. For example, ISBT 128 is more secure, allows more
flexibility in coding highly variable information, uses double-density
coding to allow more information to be encoded in a limited space, and
can be interpreted by the same bar code readers used with ABC Codabar.
The ISBT 128 bar code system established by ISBT is similar, but
not identical to, Code 128. ISBT 128 is a copyrighted symbology. The
ability to read, store, interpret, transfer, print, or otherwise
manipulate ISBT 128 data structures requires registration with the
ICCBBA and payment of an annual
[[Page 12513]]
licensing fee, and the ICCBBA uses the fees to revise, enhance, extend,
and maintain the ISBT 128 system and associated databases (Ref. 45).
The ISBT Council accepted an application specification for ISBT 128 in
July, 1994, and approved a resolution that all bar coded blood products
collected after July 4, 1998, be labeled using ISBT 128. However, the
use of ISBT 128 in the United States has been slow, and the ISBT 128
system has not been implemented in accordance with the ISBT Council's
resolution.
Despite the international convention and guidance document,
comments submitted in response to the public meeting suggest that Sec.
606.121(c)(13) has not resulted in a uniform, international bar coding
system for blood in the United States. While some comments described
ISBT 128 in favorable terms, stating, for example, that it allows more
information to be encoded or is more accurate than Codabar or that ISBT
128 represents an internationally-accepted standard for blood, at least
one comment indicated that licensing fees associated with ISBT 128 may
deter hospitals from using the ICCBBA system. Comments were also
divided as to whether to require the use of ISBT 128 or simply require
the use of ``machine readable'' symbols.
We considered whether the proposal should specify the use of ABC
Codabar, ISBT 128, a different symbology or standard, or simply require
the use of ``machine-readable information'' approved by the CBER
Director. Each approach has its advantages and disadvantages. For
example, requiring the use of ISBT 128 would help ensure a uniform bar
coding standard for blood and blood components and be consistent with
the international standard, but requiring ISBT 128 would mean that we
would have to institute new rulemaking if a new symbology, standard, or
technology was adopted. Requiring ``machine-readable'' information
approved by the Director of CBER would allow CBER to consider new
technologies in the future, but could result in some blood
establishments adopting one system and others using a different system,
thereby defeating the goal of creating a uniform system for identifying
blood and blood components. Therefore, we invite comment as to whether
we should require the use of ISBT 128, require the use of a symbology
consistent with that required for drugs in proposed Sec. 201.25, or
require ``machine-readable information'' as approved by the Director of
CBER or some other standard or symbology.
In developing this proposal, we recognize that the blood industry
currently uses a machine-readable code that does not meet UCC/EAN
standards. Some comments at the public meeting stated that the scanners
are capable of reading multiple systems (e.g., UCC/EAN and ISBT). Based
on our understanding of the state of the industry and the ability of
scanners to read more than one symbology, we decided to propose a rule
that would permit the existing coding to continue. We invite comments
on whether this proposal is feasible or whether we should require the
use of UCC/EAN standards for blood and blood components.
The proposal would require that the machine-readable information
meet certain minimum requirements and be approved by the Director of
CBER. These minimum requirements would move us closer to the goal of
increasing patient safety. We anticipate that the industry will
standardize encoded machine-readable information and readers, using our
minimum requirements to minimize, to the greatest extent possible, the
need for ``country-specific'' software and the high cost associated
with software development and maintenance.
Thus, we propose to amend Sec. 606.121(c)(13) to require the use
of ``machine-readable information'' approved by the Director of CBER.
The Director will review the machine-readable information technology to
ensure that the minimum requirements are met regarding the accuracy of
the required labeling information, spacing, and conditions of use.
Proposed Sec. 606.121(c)(13) also would:
[sbull] Explain that all blood establishments that manufacture,
process, repackage, or relabel blood or blood components intended for
transfusion and regulated under the act or the Public Health Service
Act are subject to the machine-readable information requirement. This
would be consistent with the pre-existing requirement at Sec.
606.121(a) and (b).
[sbull] State that blood and blood components intended for
transfusion are subject to the machine-readable information
requirement. This would be consistent with the pre-existing requirement
at Sec. 606.121(a) that describes the purpose behind container label
requirements.
[sbull] Describe the minimum contents of the machine-readable
information as a unique facility identifier, lot number relating to the
donor, product code, and the donor's ABO blood group and Rh type. This
would reflect the pre-existing requirement at Sec. 606.121(c)(1),
(c)(2), (c)(3), (c)(10), and (c)(12).
[sbull] Specify that the machine-readable information must be
unique to the blood or blood component, be surrounded by sufficient
blank space so that the machine-readable information can be read
correctly, and remain intact under normal conditions of use. This would
be consistent with the pre-existing requirement at Sec. 606.120(c)
that requires labeling to be clear and legible.
[sbull] State that the machine-readable information must appear on
the label of the blood or blood component which is or can be transfused
to a patient or from which the blood or blood component can be taken
and transfused to a patient. The proposal would not specify where the
machine-readable information must appear on the label. To illustrate
how this would work, the proposal's reference to any blood or blood
component would include a unit of whole blood, packed red blood cells,
plasma, platelets, and cryoprecipitate AHF. The unit of blood or blood
component label would contain the machine-readable information if the
blood or blood component has any possibility of being transfused to a
patient, whether or not the unit is actually transfused. Additionally,
the phrase, ``from which the blood or blood component can be taken and
transfused to a patient'' would include the circumstance where blood or
a blood component is extracted or aspirated with a syringe from the
container of blood or blood component in order to transfuse to a
patient. This technique might be used when transfusing neonates or
under other medically necessitated circumstances. In this case, the
blood or blood component from which the aspirate is taken must have
affixed to it a label containing the required machine-readable
information. This would be consistent with the pre-existing requirement
at Sec. 606.121(c)(8)(iii) that requires specific statements if a
product is intended for transfusion.
We also invite comment on how the proposed rule might affect
hospitals where patients receive blood or blood components.
Specifically, we want to hear how the proposal might affect a
hospital's decision to purchase a machine reader (e.g., scanner) that
properly identifies the intended recipient of the blood or blood
component. To prevent medical errors, this machine reader would need to
be compatible with the machine readable information encoded on the
blood or blood component label, yet a hospital's purchasing decision
might also be influenced by the bar codes appearing
[[Page 12514]]
on drugs and OTC drugs that are dispensed pursuant to an order and
commonly used in the hospital.
We intend to make a machine-readable information requirement
effective for blood and blood components 3 years after we publish a
final rule in the Federal Register. Changes to existing blood and blood
component labels would require the submission of an annual report as
described in 21 CFR 601.12(f)(3).
I. What Bar Code Requirement Would Apply to Biological Products?
(Proposed Sec. 610.67)
The proposal would create a new Sec. 610.67 that describes a new
labeling requirement for biological products (other than blood and
blood products, which would be covered by proposed Sec.
606.121(c)(13)). Proposed Sec. 610.67 would simply state that
biological products must be labeled in accordance with the bar code
requirements at Sec. 201.25. In addition to the separate authority
provided by section 351(j) of the Public Health Service Act, the
Federal Food, Drug, and Cosmetic Act also applies to a biological
product that is regulated under section 351 of the Public Health
Service Act.
The proposal would not apply to biological products that are
regulated as devices for the reasons we stated earlier in section
II.B.2.d of this document.
III. Legal Authority
We believe we have the authority to impose a bar coding requirement
for the efficient enforcement of various sections of the act. These
include sections 201(n), 201(p), 501, 502, 503, 505, and 701(a)) (21
U.S.C. 321(n), 321(p), 351, 352, 353, 355, and 371(a)) of the act, and
sections 351 and 361 of the Public Health Services Act.
A bar coding requirement for drugs would permit the efficient
enforcement of the misbranding provisions in section 502(a) and (f) of
the act, as well as the safety and effectiveness provisions of sections
201(p) and 505 of the act. Bar coding is expected to significantly
advance: (1) The provision of adequate directions for use to persons
prescribing, dispensing, and administering the drug; (2) the provision
of adequate warnings against use by patients where a drug's use may be
dangerous to health; and (3) the prevention of unsafe use of
prescription drugs.
Section 502(a) of the act prohibits false or misleading labeling of
drugs. This prohibition includes, under section 201(n) of the act,
failure to reveal material facts relating to potential consequences
under customary conditions of use. Information in a database that could
be readily accessed through the use of a bar code, such as the drug
strength, dosage form, route of administration, and active ingredient
and drug interactions is material with respect to consequences which
might result from use of the drug under such conditions of use. Because
all the drugs (prescription drugs and the subset of covered OTC drugs)
covered by this proposal may be used in the hospital setting, such use
in hospitals can be considered the ``conditions of use as are customary
or usual.'' As is made clear in section I of this document, bar coding
can be expected to reduce the incidence of the following types of
medication errors:
[sbull] Administering the wrong dose to a patient;
[sbull] Administering a drug to a patient who is known to be
allergic;
[sbull] Administering the wrong drug to a patient or administering
a drug to the wrong patient;
[sbull] Administering the drug incorrectly;
[sbull] Administering the drug at the wrong time; and
[sbull] Missing or duplicating doses.
Because information accessed through use of the bar code will
reveal material facts relating to potential consequences under
customary conditions of use, the bar code requirements are justified
under section 502(a) of the act.
Section 502(f) of the act requires drug labeling to have adequate
directions for use, adequate warnings against use by patients where its
use may be dangerous to health, as well as adequate warnings against
unsafe dosage or methods or duration of administration, in such manner
and form, as necessary to protect users. The bar code would make it
easier for the person administering the drug to have full access to all
of the drug's labeling information, including directions for use,
warnings and contraindications. Moreover, because the bar code's
information would go to the computer where it could be compared against
the patient's drug regimen and medical record, the person administering
the drug will be able to determine whether the right patient is
receiving the right drug (including the right dose of that drug in the
right route of administration) at the right time. The person
administering the drug will also be able to avoid giving products to a
patient who might be allergic to, or otherwise unable to take, a
particular drug. Because the bar code will facilitate access to
information including adequate directions for use and adequate
warnings, the bar code requirements are justified under section 502(f)
of the act.
In addition to the misbranding provisions, the premarket approval
provisions of the act authorize FDA to require that prescription drug
labeling provide the practitioner with adequate information to permit
safe and effective use of the drug product. Under section 505 of the
act, we will approve a new drug application (NDA) only if the drug is
shown to be safe and effective for its intended use under the
conditions set forth in the drug's labeling. Bar coding will ensure the
safe and effective use of drugs by reducing the number of medication
errors in hospitals and other health care settings. Such coding would
allow health care professionals to use bar code scanning equipment to
verify that the right drug (in the right dose and right route of
administration) is given to the right patient at the right time.
Section 505(b)(1)(D) of the act requires a new drug application to
contain a full description of the methods used in, and the facilities
and controls used for, the manufacture, processing, and packing of such
drug. The same requirement exists for abbreviated new drug applications
(see section 505(j)(2)(A)(vi) of the act) and for biological products
(see section 351(a)(2)(B)(i)(II) of the Public Health Service Act).
Information in the bar code would reflect the facilities and controls
used to manufacture the product. As described in section II.C.1 of this
document, the NDC number would identify the manufacturer, product, and
package.
A bar coding requirement also would permit the efficient
enforcement of the adulteration provisions of the act. A regulation
requiring the bar coding of products should avert unintentional mix up
and mislabeling of drugs during labeling, packaging, relabeling, and
repackaging. A bar coding requirement therefore prevents adulteration
under section 501(a)(2)(B) of the act. It is a manufacturing method or
control necessary to ensure that a drug product has the identity and
strength its labeling represents it to have, and meets the quality and
purity characteristics which the drug purports or is represented to
possess.
Requiring that the bar code be surrounded by sufficient blank
space, and remain intact under normal conditions of use, would also
further the efficient enforcement of section 502(c) of the act. Section
502(c) of the act provides that a drug product is misbranded if: Any
word, statement, or other information required by or under authority of
this Act to appear on the label or labeling is not prominently placed
thereon with such conspicuousness (as compared with
[[Page 12515]]
other labeling) and in such terms as to render it likely to be read and
understood by the ordinary individual under customary conditions of
purchase and use. The requirement that the bar code be surrounded by
sufficient blank space and remain intact under normal conditions of use
would help ensure that the bar code can be read easily and accurately
so that its safety benefits may be realized.
Because biological products, including blood, are also prescription
drug products, the sections of the act discussed elsewhere in this
legal authority section provide ample legal authority for promulgating
a regulation requiring bar coding for such biological products. There
is, however, additional legal authority for the rule's requirements as
to biological products. Section 351 of the Public Health Service Act
authorizes the imposition of restrictions through regulations
``designed to insure the continued safety, purity, and potency''
(including effectiveness) of the products. Biological product licenses
are to be ``issued, suspended, and revoked as prescribed by
regulations'' (42 U.S.C. 262(d)(1); see Sec. Sec. 601.4 through
601.6). The bar code requirement for biological drugs, and the machine-
readable information requirement for blood and blood products, is
designed to insure the continued safe and effective use of licensed
biological products. Therefore, if this rule were finalized, we may
refuse to approve biologics license applications (BLAs), or may revoke
already approved licenses, for biological drug products that do not
have such codes.
Additionally, section 361 of the Public Health Service Act
authorizes regulations necessary to prevent the introduction,
transmission, or spread of communicable diseases. With specific regard
to blood and blood products, the requirement for machine readable
information will aid in the recall, quarantine and retrieval of units
that are at risk of spreading communicable diseases.
After the effective date of any final rule, if a product required
by the final rule to bear a bar code does not have such a bar code, the
product may be considered adulterated or misbranded under the act and
would be subject to regulatory action. Our enforcement actions under
the act include seizure, injunction, and prosecution, and violation may
result in withdrawal of an NDA or BLA.
IV. Environmental Impact
We have determined under 21 CFR 25.30(h) and 25.30(k) that this
action is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
V. Paperwork Reduction Act of 1995
This proposed rule contains information collection requirements
that are subject to public comment and review by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995
(44 U.S.C. 3501-3520). We describe the provisions in this section of
the document with an estimate of the annual reporting burden. Our
estimate includes the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing each collection of information.
We invite comments on: (1) Whether the collection of information is
necessary for the proper performance of FDA's functions, including
whether the information will have practical utility; (2) the accuracy
of FDA's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (3) ways to enhance the quality, utility, and clarity of the
information to be collected; and (4) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques, when appropriate, and other forms of
information technology.
Title: Bar Code Label Requirement for Human Drug Products and
Blood.
Description: We are proposing a new rule that would require human
drug product and biological product labels to have bar codes. The
proposed rule would require bar codes on human prescription drug
products and OTC drug products that are dispensed pursuant to an order
and commonly used in hospitals and would require machine-readable
information on blood and blood components. For human prescription drug
products and OTC drug products that are dispensed pursuant to an order
and commonly used in hospitals, the bar code would contain the National
Drug Code for the product. For blood and blood components, the proposed
rule would specify the minimum contents of the machine-readable
information approved by the Director of the Center for Biologics
Evaluation and Research as blood centers have generally agreed upon the
information to be encoded on the label. The proposed rule would help
reduce the number of medication errors in hospitals and other health
care settings by allowing health care professionals to use bar code
scanning equipment to verify that the right drug (in the right dose and
right route of administration) is being given to the right patient at
the right time.
Because the Center for Drug Evaluation and Research would have bar
code information for drugs subject to a new drug application or
abbreviated new drug application to be reported through an annual
report, this proposed rule affects the reporting burden associated with
Sec. 314.81(b)(2)(iii) (21 CFR 314.81(b)(2)(iii)). Section
314.81(b)(2)(iii) requires the submission of an annual report
containing a representative sample of package labels and a summary of
labeling changes (or, if no changes have been made, a statement to that
effect) since the previous report. Here, the bar code would result in a
labeling change. We have previously estimated the reporting burden for
submitting labels as currently required under Sec. 314.81(b)(2)(iii),
and OMB has approved the collection of information until March 31, 2005
under OMB control number 0910-0001. We are not re-estimating these
approved burdens in this rulemaking; we are only estimating the
additional reporting burdens associated with the submission of label
changes under Sec. 314.81(b)(2)(iii).
Minor label changes for blood and blood products may be reported as
part of an annual report, as described in 21 CFR 601.12(f)(3), and we
would consider the machine-readable information on blood and blood
product labels to be a minor change. We have previously estimated the
reporting burden for submitting labels as currently required under
Sec. 601.12(f)(3), and OMB has approved the collection of information
until August 31, 2005 under OMB control number 0910-3338. We are not
re-estimating these approved burdens in this rulemaking; we are only
estimating the additional reporting burdens associated with the
submission of label changes under Sec. 601.12(f)(3).
Description of Respondents: Persons who manufacture, repackage, or
relabel prescription drug products or OTC drugs that are dispensed
pursuant to an order and commonly used in hospitals, and blood
establishments.
We estimate the burden of this collection of information as
follows:
[[Page 12516]]
Table 1.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
No. of Frequency of Total Annual
21 CFR Section Respondents Responses Responses Hours per Response Total Hours
----------------------------------------------------------------------------------------------------------------
Sec. 201.25, 1,447 31.1 45,000 24 hrs. 1,080,000
Sec. 610.67
Sec. 1,447 5.9 8,576 10.5 min. 1,497
314.81(b)(2)(
iii)
Sec. 211 1 211 1 min. 3.5
601.12(f)(3)
Sec. 981 42,507.7 41.7 million 1 min. 695,000
606.121(c)(13
)
Total .............. ............... .................. .................. 1,776,590.5
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
information.
Our estimates are based on the following assumptions.
[sbull] For prescription drugs (including prescription biologics
and vaccines) and OTC drugs subject to the bar code requirement,
information from our own records indicates that there are 1,447
establishments that would be affected by a bar code requirement, and
there are approximately 89,800 separate, identifiable product packages
subject to this proposed rule. We expect that half of the packages
(45,000) would need redesigned labels to comply with a bar code
requirement because they do not currently use coded NDC numbers. This
means that the annual frequency of reports, under proposed Sec. 201.25
(and proposed Sec. 610.67 for biological products not regulated as
devices), would be 31.1 (45,000 package labels requiring a bar code/
1,447 establishments = 31.09 packages per establishment, which we have
rounded up to 31.1). Consultations with industry sources suggest that
the number of hours per response to redesign a package label to include
bar coded information to comply with this regulation is approximately
24 hours. Therefore, the total burden hours for proposed Sec. 201.25
and Sec. 610.67 would be 1,080,000 hours (45,000 packages x 24 hours
per package label = 1,080,000 hours).
[sbull] For prescription drugs whose label changes would be
reported in an annual report under Sec. 314.81 or under Sec.
601.12(f)(3) for biological products), there are approximately 1,447
registered establishments that would be reporting. Information on
listed drugs indicates there are 89,800 separate, identifiable product
packages that will comply with the proposed bar code requirement. These
packages account for 8,576 separate and distinct products (each product
is marketed in an average of 10.47 packaging variations). This means
that the annual frequency of reports would be 5.9 (8,576 products
subject to annual reports/1,453 registered establishments = 5.92
products per registered establishment, which we have rounded down to
5.9). Section 314.81(b)(2)(iii) requires firms to submit an annual
report that includes a summary of any changes in labeling since the
last annual report. Similarly, Sec. 601.12(f)(3)(I)(A) requires
manufacturers of biologics to include in their annual reports editorial
or similar minor labeling changes. We expect that the addition of a bar
code to a label would necessitate a simple statement in the annual
report declaring that the bar code has been added, so we have assigned
an estimate of one minute for such statements per label. Each product's
annual report would include labels for all packaging variations. Thus,
the total reporting burden would be 1,496.67 hours ((8,576 reports x
10.47 labels (or one label per packaging variation) per report x 1
minute per report)/60 minutes per hour = 1,496.67 hours), which we have
rounded up to 1,497 hours.
[sbull] For minor labeling changes for blood and blood components
included in an annual report under Sec. 601.12(f)(3)(i)(A), FDA's
database indicates there are 211 licensed blood and blood component
manufacturers. We expect that the addition of machine-readable
information to the label of blood and blood components would
necessitate a simple statement in the annual report declaring that the
machine-readable information has been added, so we have assigned an
estimate of one minute for such statements. Thus, the total reporting
burden would be 3.5 hours ((211 reports x 1 minute per report)/60
minutes per hour = 3.516 hours), which we have rounded down to 3.5
hours.
[sbull] For the requirement in proposed Sec. 601.121(c)(13) to
include machine-readable information on blood and blood components,
FDA's registration database indicates there are 981 blood and plasma
establishments. The American Association of Blood Banks estimates that
approximately 13.9 million blood donations are collected annually. We
estimate that each blood donation yields approximately three blood
components. This means that the frequency of responses is approximately
41.7 million occurrences (13.9 million blood donations x three blood
components per donation) divided by 981 establishments or 42,507.645
occurrences per establishment, which we have rounded up to 42,507.7. We
estimate that it takes 1 minute to apply a machine-readable code
manually; if a blood collection facility uses an on-demand printer, the
time would range between 15 to 30 seconds. For purposes of this
estimate, we adopt the larger time estimate of 1 minute per machine-
readable information for blood, thus resulting in an annual reporting
burden of 695,000 hours ((41.7 million reports x one minute per report)
/60 minutes per hour = 695,000 hours). However, we reiterate that
facilities using on-demand printers would face lower burdens. In
addition, blood collection centers are currently allowed and encouraged
to apply machine readable information to collections. This burden
estimate accounts for requiring an activity that is currently voluntary
and does not reflect an additional activity.
In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507(d)), we have submitted the information collection requirements of
this rule to OMB for review. Interested persons are requested to fax
comments regarding information collection by April 14, 2003, to the
Office of Information and Regulatory Affairs, OMB (see ADDRESSES).
VI. Executive Order 13132: Federalism
We have analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. We have determined that
the rule does not contain policies that have substantial direct effects
on the States, on the relationship between National Government and the
States, or on the distribution of power and responsibilities among the
various levels of government. Accordingly, we have concluded that the
rule does not contain policies that have federalism implications as
defined in the order and, consequently, a federalism summary impact
statement is not required.
[[Page 12517]]
VII. Analysis of Impacts
A. Introduction
We have examined the proposed rule under Executive Order 12866, the
Regulatory Flexibility Act as amended by the Small Business Regulatory
Enforcement Fairness Act, the Unfunded Mandates Reform Act, and the
Congressional Review Act. Executive Order 12866 directs agencies to
assess all costs and benefits of available regulatory alternatives and,
when regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, distributive impacts and equity). Under the
Regulatory Flexibility Act (as amended by the Small Business Regulatory
Enforcement Fairness Act), if a regulation has a significant economic
impact on a substantial number of small entities, we must analyze
regulatory options that would minimize the impact on small entities.
Section 202(a) of the Unfunded Mandates Reform Act requires that
agencies prepare a written statement of anticipated costs and benefits
before proposing any regulation that may result in expenditure by
State, local, and tribal governments, or by the private sector of $100
million in any one year (adjusted annually for inflation). Currently,
such a statement is required if costs exceed about $110 million for any
one year. The Congressional Review Act requires that regulations
determined to be major must be submitted to Congress before taking
effect.
The proposed rule is consistent with the principles set forth in
Executive Order 12866 and the three statutes. We have identified the
proposed rule as an economically significant regulatory action, as
defined in Executive Order 12866. We believe the proposed rule is
unlikely to have a significant impact on a substantial number of small
entities. The expected cost of this proposed rule is greater than $110
million in a single year and therefore is considered a major regulatory
action as defined by the Unfunded Mandates Reform Act. The Office of
Information and Regulatory Affairs (OIRA) in the Office of Management
and Budget (OMB) has determined this proposed rule to be major under
the Congressional Review Act.
We contracted with the Eastern Research Group, Inc. (ERG), to
collect data, interview industry experts, and analyze the costs and
benefits of the proposed rule. The detailed analyses and references in
support of the impacts summarized in Table 2 are included in the docket
as Reference 46.
Table 2.--Estimated Impacts of the Proposed Rule (in Millions of Dollars)
(Over 20-Year Period at 7-Percent Discount Rate)
----------------------------------------------------------------------------------------------------------------
Anticipated Net Benefits
Impacts Regulatory Hospital Societal Potential Hospital (benefits minus
Costs Costs\1\ Benefits\2\ Efficiencies\3\ costs)\4\
----------------------------------------------------------------------------------------------------------------
Present Value $53.1 $7,204.3 $41,381.3 $4,783.3-$7,643.0 $34,123.9
Annualized $5.1 $680.0 $3,906.1 $451.5-$721.5 $3,221.0
----------------------------------------------------------------------------------------------------------------
\1\ Costs due to voluntary accelerated purchase and utilization of bar coding systems.
\2\ Benefits to public health due to avoidance of adverse drug events.
\3\ Potential efficiencies in reports, records, inventory, and other hospital activities.
\4\ Net benefits include only public health benefits of increased patient safety.
Table 2 presents the total expected regulatory costs to
manufacturers, repackers, relabelers, retail outlets, and FDA. Most of
these costs will occur during the first several years after
implementation. Table 2 also shows the estimated opportunity costs of
the expected accelerated investment in bar coding systems by the health
care sector. These investment expenditures are necessary to achieve the
societal benefits expected from the proposed rule. Table 2 also shows
our estimated range of possible efficiencies in hospital activities
associated with accelerated adoption of technology. Both anticipated
hospital costs and societal benefits would occur after hospitals
purchase and install the necessary equipment to take advantage of bar
codes. The net benefit figure is the societal benefit minus the induced
expenditures minus the regulatory costs. This estimate, however,
accounts for neither potential hospital efficiencies, nor income
transfers to hospitals following fewer awards for medical malpractice.
B. Objective of the Proposed Rule
The objective of the proposed rule is to enable the health care
sector to utilize technological solutions to reduce preventable adverse
drug events (ADEs)\2\ associated with medication errors\3\ in
hospitals.\4\
---------------------------------------------------------------------------
\2\ For this analysis, an adverse drug event (ADE) is an injury
from a medicine (or a lack of an intended medicine). (source:
American Society of Hospital Pharmacists, 1998)
\3\ For this analysis, a medication error is a preventable event
that may cause or lead to inappropriate medication use or patient
harm while the medication is in the control of the health care
professional, patient, or consumer. (source: NCCMERP, 2002)
\4\ For this analysis, a hospital is a facility that provides
medical, diagnostic, and treatment services that include physician,
nursing, and other health services to inpatients and the specialized
accommodation services required by inpatients. (source: NAICS, 2002)
---------------------------------------------------------------------------
C. Estimate of Risk/Risk Assessment
In 1999, the Institute of Medicine (IOM) issued a report that drew
public attention to the number of deaths that occur each year in the
United States from preventable medication errors in hospitals. A
significant proportion of the reported deaths, as well as the
additional illnesses and morbidities, were associated with errors
involving FDA-regulated products, especially medications. This section
briefly describes the agency's efforts to estimate the current number
of preventable ADEs.
The public health literature includes many attempts to determine
the rate of preventable ADEs in United States hospitals, although these
studies typically employed varying methodologies and definitions. Our
methodology begins by multiplying estimated hospital admissions by
reported rates of ADEs per admission. We combined the resulting number
of ADEs per hospital per year with the reported ratio of preventable to
total ADEs to estimate the number of preventable ADEs per hospital per
year. We first developed these calculations for various hospital size
classes and then aggregated the data to present national estimates. We
relied on published literature to derive ADE rates for each major stage
of the medication process in hospitals.
ERG identified four comparable published studies that reported
rates of ADEs per hospital admissions (Bates et al., 1995, Classen et
al., 1997, Jha et al.,
[[Page 12518]]
1998, and Senst et al., 2001). The reported incidence rates of hospital
admissions with ADEs ranged from 2.4 percent to 6.5 percent with a mean
rate of 4.3 percent. According to AHRQ, there were 29.1 million
nonobstetric hospital admissions during 2000. We multiplied these
admissions by 0.043 and found that approximately 1.25 million ADEs
occur annually in United States hospitals. The same four studies
reported that between 15 percent and 49 percent of all ADEs are
preventable. We used the mean of these studies to estimate that about
372,400 (30 percent) of these ADEs were preventable. Based on published
reports (Bates et al., 1998, and Leape et al., 1998), we also estimated
that 1,046,000 potential ADEs\5\ are either intercepted before reaching
the patient or do not cause an injury. According to projected increases
in hospital expenditures and population demographics that imply future
increases in hospital admissions, the annual number of ADEs could
triple within 20 years.
---------------------------------------------------------------------------
\5\ A potential ADE is a medication error that could have caused
an ADE, but did not. Potential ADEs include medication errors that
were intercepted before reaching the patient. Potential ADEs include
any errors that do not involve patients.
---------------------------------------------------------------------------
ERG searched the public health literature to identify stages in the
hospital medication process in which errors occur and concluded that
the medication stages of prescribing, transcribing, dispensing, and
administration provide a useful analytic structure. The most common
reported ADE symptom was cardiac arrhythmia followed by itching and/or
nausea. Relatively few fatalities have been documented as preventable
ADEs, but several published studies conclude that as many as 2.8
percent of all preventable ADEs probably result in fatalities. Another
study has asserted that as many as 2.7 percent of all ``negligent'' (as
defined in the study) ADEs have resulted in permanent disability. We
used these estimates in our analysis.
D. The Proposed Rule
We propose to require machine-readable information on all
prescription drug and biological products (including vaccines), all OTC
drug products dispensed pursuant to an order and commonly used in
hospitals, and all human blood products. This information would include
the NDC number identifying the dosage, strength, nature, and form of
each administered product and would be portrayed in a standardized
linear bar code\6\ and include product-specific and package-specific
NDC numbers. We would maintain a database of all unique NDC numbers and
ensure these data are available for use in commercial computerized
systems that can provide bedside bar code identification. The bar code
requirement would, if finalized, be effective within 3 years after we
have published a final rule.
---------------------------------------------------------------------------
\6\ A bar code is a graphic representation, in the form of bars
and spaces of varying width, of numeric or alphanumeric data.
---------------------------------------------------------------------------
We are proposing this regulation because private markets have
failed to establish the standardized bar codes that are needed to
motivate hospitals to adopt an important health-saving technology. In
particular, we believe that the private market's failure to develop
standardized bar codes has impeded the growth of the technological
investment necessary to reduce the number of ADEs in the nation's
hospitals. We find that a regulatory intervention to establish a
standardized system of bar codes is needed to address this market
failure.
The proposed rule would increase costs to the manufacturers,
marketers, and packagers of the affected products by requiring changes
in manufacturing, packaging, and labeling processes. It would also
increase costs to some hospitals by requiring a change in some bar code
readers associated with these products. The proposed rule would also
require FDA resources to ensure industry compliance with the bar coding
requirement and additional resources to maintain a computerized
database of NDC numbers. Once bar codes are standardized, the proposed
rule would enable hospitals to take advantage of the coded information
that would permit hospitals to reduce ADEs, while achieving other
operational cost efficiencies. The proposed rule would also enable
other sectors to use machine-readable technology in ways that would
benefit public health (for example, accessing up to date labeling
information from home computers).
E. Description of Affected Sectors
1. Current Machine-Readable Technologies
Before developing the proposed rule, we contracted with ERG to
examine the current machine-readable technologies available for use by
the health care sector and report on trends. The resulting report is
included in the docket (Ref. 47) and summarized here.
Bar coding is currently the most widely used machine-readable
technology and is also the technology most likely to see increased
acceptance in the near future. Healthcare companies have sponsored two
organizations that have each developed different bar code
symbologies;\7\ the Uniform Code Council's Universal Product Code (UPC)
and the Health Industry Bar Code Council's Health Industry Bar Code
(HIBCC). UPC codes are more widely used in retail stores while HIBCC is
specially designed to safeguard against errors. However, although the
HIBCC code has been more effectively used by medical device
manufacturers, it has not won wide acceptance within the pharmaceutical
markets. Within these symbologies, the groups have defined acceptable
linear (or one-dimensional) codes, two-dimensional codes, and composite
codes (a combination of one- and two-dimensional symbology). The
advantage of two-dimensional and composite codes is that they can
include additional information in the same area. Potential
disadvantages of two-dimensional and composite symbologies are the
higher costs for readers and scanners and the additional risk of
uncertain data recovery by misinterpreting coded information.
---------------------------------------------------------------------------
\7\ A symbology refers to a distinct technological, machine-
readable language.
---------------------------------------------------------------------------
While these organizations' bar codes are widely used, their use for
the prevention of ADEs remains limited. Most pharmaceutical and OTC
manufacturers use bar codes to move shipping cases through their
distribution chain, but relatively few pharmaceuticals are sold with
the specific bar codes that would be required by this proposed rule.
Some hospitals use computer-controlled technology to add their own bar
codes to incoming products.
Bar code systems require printers, scanners, and software to ensure
that correct information is communicated. According to discussions with
consultants, pharmaceutical manufacturers prefer to label products as
late as possible in the manufacturing process in order to maximize
their flexibility. Printing technology advancements have allowed more
printing options to be available. Manufacturers currently use contract
label printers or packagers along with in-house operations. Contract
printers are commonly used for preprinted labels that do not carry
customized data. Currently, ink jet and thermal printers may be
appropriate for production line printing of bar codes, although ink jet
printers may cause difficulties in media compatibility, print speed,
and resolution. Water-based inks can streak or blur, but nonwater
soluble inks produce a shine that reflects to the scanner and affect
how the bar code is read. Laser printers are subject to toner
[[Page 12519]]
flaking, which makes them unreliable for long-term bar code printing.
Production line speeds may also create problems for bar code resolution
levels.
The complexities of bar code scanners have evolved as the codes
have become more data intensive. Most scanners in current use are
laser-based systems designed to read linear bar codes. In health care
settings, scanners are routinely programmed to discriminate among the
symbologies they are likely to encounter. Some laser scanners can also
read composite or two-dimensional codes, if properly programmed. These
scanners are more costly, and some consultants have cautioned that
multiple data systems may introduce potential misreading at hospital
bedsides. Moreover, in certain situations, health care scanners may not
need to use all of the available information. For example, scanners at
bedside point of care may only need to capture limited identifying
information while the central dispensing pharmacies may require full
database capabilities. At this time, the scanning industry is confident
that linear standards\8\ will be readily accessible, whereas other
standards may require additional market research. We believe that
scanners will work in conjunction with hand-held personal digital
assistants (PDAs) in wards due to their portability and multi-
functional characteristics.
---------------------------------------------------------------------------
\8\ A standard refers to a general description of a system of
machine-readable languages.
---------------------------------------------------------------------------
2. Manufacturers and Packagers of Affected Products
Discussions with staff at two large Veteran Health Administration
Comprehensive Mail Order Pharmacies indicate that the large majority of
exterior pharmaceutical packages include the NDC number in a bar code.
The proposed rule, however, would require this bar coded information on
both exterior and interior packaging. In addition, some prescription
and OTC drug products are sold in blister packs, where individual pills
or capsules are enclosed in a bubble. Prescription products are often
repackaged into blister cards for more convenient use in hospitals.
While some blister cards may now be labeled with bar codes for
specified concerns, many are not. OTC drug products rarely include bar
coded information on blisters. Moreover, many bar coded exterior
packages cannot be read by hospital or retail scanners, because
manufacturers use bar codes for sales promotions and other special
offers that have separate and distinct NDC numbers that do not appear
in all customer databases.
There are currently approximately 1,218 establishments in the
Pharmaceutical and Biologic Preparation industries (NAICS 325412 and
325414). Based on the size distribution of industry establishments, we
estimate a total of approximately 3,728 in-house packaging production
lines. In addition, an estimated 229 establishments in the Packaging
and Labeling Services industry (NAICS 561910) are dedicated to serving
the pharmaceutical industry, accounting for an additional 501 packaging
lines. Overall, we estimate that 4,229 packaging lines are used in
1,447 establishments for these products.
In addition, we estimate there are 981 blood collection centers in
the United States (NAICS 621991). Each of these collection centers acts
as a separate packaging line. Consultants have estimated that about 25
percent of these blood collection centers are included in published
industry counts. We added blood collection centers to the industry
packaging lines for a total of 4,995 affected packaging lines in 2,428
separate establishments.
The number of separate trade and generic named products has
increased by over 500 percent since 1990, and now encompasses about
17,000 names. Each of these named products may be marketed in varying
strengths or dosage forms. Overall, we estimate there are 78,000
separate prescription unit-of-sale packages, 98,000 OTC drug packages,
and 2,000 blood/vaccine packages. Over time, the number of distinct
packaging units is expected to continue to increase. The OTC drug
industry has suggested that fewer than 10 percent of OTC packages
(9,800 packages) are commonly used in hospital settings and would be
subject to the proposed rule. For example, OTC analgesics that may be
dispensed to a patient pursuant to an order would be subject to the
proposed rule, but mouth rinses or toothpastes that may be provided
would not. We are collecting data to confirm the proportion of affected
OTC drug products. The Consumer Healthcare Products Association (CHPA)
estimated that as many as 10 percent of their members' products were
regularly dispensed from hospital pharmacies or packaged specifically
for sale to hospitals. Other responses include a report from a hospital
that only 200 OTC drug products are routinely dispensed. For purposes
of this analysis, we have assumed that 10 percent of all OTC drug
products would be required to provide bar coded information. We are
trying to collect better information for these products. Overall,
89,800 separate unit-of-sale packages are expected to be subject to the
proposed rule.
OTC drug manufacturers frequently redesign labels. Based on
discussions with manufacturers, we believe that the majority of OTC
labels are redesigned within a 6-year cycle for marketing reasons. Many
products have redesigned labels every 2 or 3 years. Prescription drug
product labels may be redesigned less frequently, but there is evidence
that numerous labeling changes occur. While marketing of prescription
products may not be as sensitive to labeling graphics and package
design as OTC products, there are many other reasons why manufacturers
change their labels. Although we examined NDA files and found that
changes to prescription product labels occur an average of more than
once per year, for this analysis we have nevertheless assumed that the
proposed rule would require significant involuntary actions by the
affected industry.
3. Retail Outlets
Retail pharmacies currently have the capacity to read linear
standardized bar codes at their in-house scanners. However, if we had
selected an alternative to the proposed rule that would have required
reduced space symbology (RSS), the current stock of scanners may have
required upgrades or replacement. These upgrades would not have been
directly mandated by the alternative, but would have been necessary for
these entities to continue with bar coded activity. The retail sector
currently relies on UPC or other symbologies, and a single standard
would not require scanner replacements or upgrades. Only OTC drug
products dispensed pursuant to an order and commonly used in hospitals
would be affected by the proposed rule. Although small vials or bottles
may require specific RSS symbology, these items are available to
consumers in larger packages that accommodate current standards for
retail outlets. According to the National Association of Chain Drug
Stores, there are 55,000 community and chain pharmacies (NAICS 446110),
and pharmacies in supermarkets and mass merchandisers (NAICS 445110)
that utilize over 515,000 scanners. The expected useful life of a
retail scanner is 5 years. The proposed rule is not expected to impact
this sector, but we have considered alternatives that would affect
retail outlets.
4. Hospitals
The proposed rule would not require hospitals to introduce the new
automated technologies, but the development of consistent bar codes on
[[Page 12520]]
pharmaceutical and blood products would greatly encourage hospitals to
implement bar code based systems to reduce ADEs associated with
medication errors. Moreover, unit-dose blister packs and other vials
and small bottles might necessitate the use of RSS symbology. In order
to scan these products properly, hospitals that currently have
installed bar code readers may need to upgrade or replace some
scanners. According to the most recent census, there are 6,591
hospitals in the United States (NAICS 622) with a total of over 1.25
million beds. Estimates of personnel in these hospitals include 97,500
pharmacists, 75,500 pharmacy assistants, and almost 1.2 million nurses.
Overall, a nurse is responsible for 4.5 beds per shift. An average
hospital includes 191 beds and employs approximately 15 pharmacists, 11
pharmacy assistants, and 182 nurses.
Hospitals are currently adopting bar code technology to better
control the entire medication process and improve the delivery of care
to patients. Virtually all hospital pharmacies use bar code scanners
for inventory and stock keeping activities, but only approximately one
percent of all hospitals have installed bedside, point-of-care systems
that use bar coded information. An additional three percent of
hospitals use some form of computerized system in the medication
process, but not all use bar codes. Overall, an estimated two percent
of all hospitals (131 hospitals) currently use bar codes in everyday
operations. Even in the absence of the proposed rule, we expect the
remaining 6,460 hospitals to gradually implement computerized tracking
systems. Discussions with industry consultants and the American
Hospital Association (AHA), however, suggest that without
standardization, it would take 20 years for all hospitals to adopt and
use systems with bar code readers and utilize in-house overpackaging
and self-generation of bar code identifiers. ERG discussed with several
consultants whether 20 years is a realistic horizon for acceptance of
this technology. While they recognized the uncertainty of future
projections in this area, these industry experts felt that 20 years was
a reasonable expectation. We examined the impact of alternative
acceptance streams as a sensitivity analysis.
We requested comments on the potential uses of bar coded
information on drug products at a public meeting held on July 26, 2002.
These comments indicated that while patient safety reasons were the
primary goals for installation of scanning systems, there are other
potential uses. Industry groups and individual hospitals noted that
installation of scanning systems may lead to more efficient inventory
control, purchasing and supply utilization, and other potential risk
management activities. Other groups noted that an integrated
computerized network would assist billing and laboratory systems as
well. The AHA stated that bar codes would improve patient care and
safety, increase workforce productivity and satisfaction, streamline
payment, billing, and administrative systems, lead to efficient
management of assets and resources, and meet consumer expectations for
service and access to information. We believe these comments indicate
that internal investment decisions concerning the acquisition of
computerized systems entail additional returns that are in addition to
ADE avoidance. While some of these returns to hospitals (such as
reduced liability awards and malpractice liability insurance premiums)
may be transfers, we believe additional efficiencies are likely.
5. FDA Oversight and Responsibilities
We would be affected in two areas. For successful bar code use,
hospitals need access to the unique NDC numbers that identify specific
active ingredients, packages, dosage forms, and units. We would
maintain the database containing these unique identifiers and arrange
access to it for the private sector.
The second area in which our activities would be impacted by the
proposed rule is our use of compliance resources. The proposed rule
would require the affected products to have bar coded information.
Although the exact impact on our compliance resources is not
quantified, we recognize that the creation of new regulatory
requirements would require additional resources to ensure compliance.
F. Regulatory Costs of the Proposed Rule
1. Introduction
We estimated costs for a 20-year evaluation period to reflect the
time that hospitals are expected to take to invest in bar code
technology in the absence of the regulation. This summary describes
these costs and presents both the present value (PV) and the annualized
value of the cost streams. We analyzed costs in the affected sectors
over the entire evaluation period using a seven percent annual discount
rate. We assume that costs accrue at the beginning of any period. The
detailed calculations and references that support the following
analysis are available in Reference 46.
2. Costs to Manufacturers and Packagers of Affected Products
The pharmaceutical industry would face compliance costs from this
proposed rule because we would require manufacturers, repackers,
relabelers, and private label distributors to include NDC numbers in
bar code format, using linear standardized symbology, down to the unit-
dose level. The proposed rule would require this information within 3
years of the implementation date of the final regulation. The proposed
rule would also affect the production processes of the pharmaceutical
and biological product industries. Although manufacturers appear to
initiate labeling changes fairly often for internal purposes, the
proposed rule would necessitate large-scale production line alterations
that could affect a manufacturer's entire product line.
a. Prescription Drugs. Based on ERG's analysis, we expect the
overall investment costs to the prescription drug industry to total
$26.3 million over the first 3 years of the evaluation period. Most
costs ($17.6 million) accrue for modifications to unit-dose interior
packaging to include a unique NDC number in a linear standardized
format for every product. Exterior packaging modifications that include
NDC information would cost $4.1 million over the 3-year period. Because
the capital equipment installed for these packaging modifications would
require upgrading and replacement after an average 10-years of
productive life, the industry would invest an additional $3.8 million
over the 11th, 12th, and 13th evaluation year for this replacement and
upgrade. In addition, the packaging production process would require
additional annual operating and maintenance costs reaching $0.4 million
by the third evaluation year. In total, we estimate that the PV of the
costs incurred by prescription drug manufacturers, repackers, and
relabelers to comply with the proposed rule over the 20-year period is
$30.4 million and the annualized cost is $2.9 million.
b. Over-the-Counter Drugs. The OTC drug industry has estimated that
fewer than 10 percent of its products are commonly used in hospitals
(CHPA, 2002). We are currently collecting data on the size of this
market share. For this analysis, we assume that 10 percent of all OTC
drug products would be subject to the regulation and will include bar
coded NDC numbers. The industry would either assign internal production
processes that allow labeling differentiation for these products, or
repackers and relabelers would provide the required labeling. We
believe that
[[Page 12521]]
the magnitude of packaging changes required to install bar coding
equipment would result in manufacturer decisions to bar code entire
product lines rather than incremental, specific products. We estimate
that the initial investment for OTC drug manufacturers, repackers, and
relabelers would total $1.7 million over 3 years, with additional
capital investments of $0.1 million during the 11th evaluation year.
The estimated annual operating costs to provide bar codes to the
affected proportion of the OTC drug market are negligible (less than
$0.05 million by the third year). Overall, the PV of these costs over
the 20-year evaluation period to the OTC drug industry is $2.1 million
and the estimated annualized costs are $0.2 million.
c. Blood and Blood Products. Manufacturers of blood and blood
products would also be affected by the proposed rule. Although most
blood and blood product manufacturers have voluntarily applied bar
coded information, this requirement would add to their costs by
requiring specific machine-readable information in a consistent format.
These costs would equal approximately $0.4 million over the first 3
years, with additional capital expenditures of $0.1 million over the
following 20-year evaluation period for replacement or upgrade of
equipment installed in response to the proposed rule. The annual
operating costs to blood manufacturers of maintaining the equipment
would be negligible (less than $0.05 million by the third year). We
estimate that the PV of these compliance costs to blood and blood
product manufacturers for using machine-readable information in a
consistent machine-readable format over the 20-year period is $0.7
million and that the annualized costs are $0.1 million.
d. Total Cost to Manufacturers, Repackers, and Relabelers. The
estimated PV of regulatory costs to manufacturers, repackers, and
relabelers of prescription drug products, OTC drug products, blood, and
blood products is $33.2 million. The average annualized costs to these
industries are $3.2 million.
3. Costs to Retailers and Distributors
We do not expect increased costs to retailers, wholesalers, and
distributors. Currently installed scanners and readers are able to read
the linear bar codes described in the proposed rule. However, if we had
selected an alternative that would have required RSS symbology,
independent community pharmacies, chain pharmacies, and pharmacies in
chain merchandisers or supermarkets would have had to upgrade scanners
in order to take advantage of the proposed standardized information.
Given the widespread reliance on bar code information in the retail
sector, the currently installed stock of bar code scanners would not be
affected by the proposed rule.
4. Costs to Hospitals
The proposed rule would require NDA numbers in linear bar codes on
the immediate containers of affected products and machine-readable
information on blood and blood products. However, because
manufacturers, repackers, and relabelers are expected to find it
necessary to use RSS symbology on small unit-dose packages or vials and
bottles, their scanners and readers must have the ability to capture
this information in a RSS format. As a result, in order for hospitals
that have currently installed bar code reading systems to maintain
current operating practice, their scanners may need to be replaced with
scanners that are capable of reading RSS symbologies. Replacement of
these scanners would not be a voluntary hospital investment, but would
be necessary to maintain current operations.
These costs are somewhat mitigated for the approximately 2 percent
of all hospitals (131 hospitals) that currently use bar codes in
everyday practice by repackaging medications in unit-dose form and
applying internally printed and generated bar codes. According to
published reports and discussions with industry experts, ERG estimated
that such hospitals now incur costs to apply bar codes on nearly 28
percent of dispensed medications. These 131 hospitals would avoid these
expenditures under the proposed rule.
The proposed rule would result in the premature replacement of
scanners used in hospital pharmacies and treatment wards. ERG has
estimated that the PV of the incremental initial cost of accelerated
scanner replacement or upgrade to read RSS symbologies, based on the
expected remaining useful life of current equipment, is approximately
$13.7 million. The average annualized costs to hospitals of early
replacement is $1.3 million.
According to reports in the literature, it costs as much as $0.03
per unit-dose to apply a bar code in hospital pharmacies. Avoidance of
this activity will reduce costs by approximately $0.7 million per year.
The PV of this cost reduction is $7.6 million.
Overall, we estimate the PV of regulatory costs, less the cost
savings to hospitals of the proposed rule, to be $6.1 million, and the
average annualized costs are $0.6 million.
5. Costs to the Food and Drug Administration
According to a recent study, the number of available pharmaceutical
products has increased by 500 percent in 10 years and now totals over
17,000 separate trade and generic names. With the multitude of dose
strengths and packages, the total number of unique packaging units is
now 178,000 separate identifiable products. Of this total, we expect
89,800 of these packaging units would need bar coded NDC numbers
because we estimate that only 10 percent of all OTC drug products will
be affected. Even if the recent growth rate in new products were halved
(so that the number of available products increased by 500 percent in
20 years), there would be 449,000 new NDC codes over 20 years, or
22,500 per year for the evaluation period.
We expect that the requirement for notification of unique NDC
numbers would require the development and maintenance of an accessible
agency database. We have assumed 0.5 hours per notification to
represent the cost to input and encode a specific NDC number and to
maintain an accessible data base containing all NDC numbers. This
implies an annual resource requirement of 11,250 hours, or
approximately 5.6 full-time equivalents (FTEs). These direct resources
require supervision, administration, and support. To account for these
indirect resources, we multiplied direct resources by two, resulting in
11.2 annual FTEs. The most recent FDA budget documents have used a
value of approximately $120,000 per FTE. Therefore, we expect the
annual costs of maintaining a system of unique NDC numbers to be $1.3
million with a PV of $13.8 million. Although additional regulatory
requirements, such as requiring readable bar code information on
product labels, would increase our compliance burden, we have not
quantified that impact at this time.
6. Total Regulatory Costs
The estimated PV of the total direct regulatory costs of the
proposed rule over the 20-year period is $53.1 million, which is
equivalent to an annualized cost of $5.1 million. Table 3 illustrates
the timing of the stream of investments and increased annual operating
and maintenance costs expected from the proposed rule.
[[Page 12522]]
Table 3.--Regulatory Costs (in Millions) by Year
----------------------------------------------------------------------------------------------------------------
Evaluation Year Investment During Year Operating and Maintenance Cost
----------------------------------------------------------------------------------------------------------------
1 $23.2 $0.9
2 $9.5 $1.0
3 $9.5 $1.1
4 0 $1.1
5 0 $1.1
6 0 $1.1
7 0 $1.1
8 0 $1.1
9 0 $1.1
10 0 $1.1
11 $1.4 $1.1
12 $1.4 $1.1
13 $1.4 $1.1
14 0 $1.1
15 0 $1.1
16 0 $1.1
17 0 $1.1
18 0 $1.1
19 0 $1.1
20 0 $1.1
----------------------------------------------------------------------------------------------------------------
G. Other Anticipated Expenditures
We anticipate that the proposed rule would affect all facilities
defined as hospitals and included in NAICS 622, including general
medical and surgical hospitals, psychiatric and substance abuse
hospitals, and other specialty hospitals. We did not quantify impacts
on nursing and residential care facilities (NAICS 623). The proposed
rule would impact hospitals by encouraging them to accelerate the
efficient use of bar code reading technology in hospital bedside point
of care settings. The expected increased investment would lead to a
significant reduction in the number of ADEs among hospital patients. We
assume that investments by the health care sector are made at the
beginning of each period.
The hospital sector has long considered the application of bar code
reading technology for its facilities. According to the AHA, almost
half of the hospitals in the United States have explored the
possibility of independently installing this technology. A few (about
four percent of all hospitals) are currently using some form of
computerized systems in their medication processes, and half of them
use bar codes in everyday practice. However, because hospitals
currently have no standardized bar coded information for all
therapeutic products, each hospital must generate and internally affix
bar codes that are only applicable within that specific facility. In
some cases, hospitals overpackage drug products in order to make
current scanning systems usable. This extra effort reduces the expected
efficiency of the bar code reading systems and has been a barrier to
the general acceptance of readable technology. Standardized universal
codes would remove this impediment and encourage health care facilities
to invest and use technology to reduce patient ADEs.
Hospital facilities will face significant capital investments and
significant process changes in order to implement bar code reading and
scanning technology. ERG estimated that the average initial cost to a
typical hospital for installation of scanners, readers, software,
initial training etc. is $377,000.\9\ In addition, although there is
considerable uncertainty, ERG contacted hospital industry executives
and consultants who agreed that negative productivity effects were
likely after installation of a bar code reading system. The contacts
noted that using the scanners could result in reductions in patient
ward productivity because current scanners and administration
procedures would have to be revised to accommodate this technology.
Difficulties could arise, for example, when multiple doses of
medication are required at the same time for different patients and
when current administrative practices, such as pre-preparing certain
medication, could not be accommodated with the bar code reading
systems. Also, moving the scanner and reader from room to room, not
adequately reading the bar code on one swipe, and other procedural
changes might result in operational inefficiencies. It is possible (and
hopeful) that long-term process changes would moderate or eliminate
these potential inefficiencies, but our analysis assumes that hospital
ward productivity levels would fall by three percent annually over the
evaluation period. The annual opportunity costs of these productivity
losses, together with the operation and maintenance expenses, amount to
$320,000 per year for the average sized hospital. Some of these
expected productivity losses would be mitigated by efficiency gains in
other hospital procedures and are discussed later.
---------------------------------------------------------------------------
\9\ Per hospital expenditures and benefits are based on an
average sized hospital based on bed capacity. The average United
States hospital has 191 beds (ASHP, 1999).
---------------------------------------------------------------------------
Despite these costs, interviews with consultants in the field of
health care technology indicate that hospitals are gradually making
this commitment. Experts have predicted that in the absence of this
proposed rule, the hospital sector would likely install bar code
readable technology within 20 years. Therefore, we believe that, while
approximately 131 hospitals currently use bar codes in everyday
operations, the remaining 6,460 hospitals would ultimately invest in
this technology. The experts have also predicted that if standardized
bar code information on medications were available to allow scanning
systems to capture information without requiring in-facility labeling
systems, many hospitals would make these investments much earlier. For
example, ERG estimated that if in-hospital pharmacy operations were no
longer required to repackage and relabel products because of the
proposed rule, the annual operating and maintenance costs of a bar code
scanning system would fall from $377,000 to $314.800. Thus, we believe
that the proposed rule would effectively prompt facilities to
accelerate these investments.
[[Page 12523]]
Based on ERG's discussions with industry consultants, we predict
that the rule could double the rate of hospital investment in this
technology, thereby achieving the installation of complete systems
within 10 years. For example, for those hospitals that now expect to
acquire bar code systems within 10 years, we assume the availability of
standardized bar codes on medications would accelerate the purchase to
within 5 years. The cost to the hospital of this accelerated investment
expenditure would be the opportunity cost of the investment capital for
5 years (the difference between making the investment in year 5 as
opposed to year 10) as well as the five additional years of maintenance
expenses and productivity losses. In addition, industry experts suggest
that systems of bar code readers and scanners would require software
and equipment upgrades within 10 years of installation. For the example
facility, the installed system would require upgrades during the 15th
project year under the accelerated investment, whereas upgrades would
not occur until the 20th year in the absence of a regulation. We
acknowledge that precise estimates of the rate of acceleration of
technology acceptance are highly uncertain, but industry experts have
indicated that doubling the rate of technology acceptance is a
reasonable assumption. Alternative rates of acceptance were analyzed
and discussed as a sensitivity exercise. We specifically invite public
comment on the feasibility of this assumption.
ERG used a Probit function to estimate the annual rate of
acceptance. This function assumes a normal density distribution for the
selected period and has been used to describe rates of technology
acceptance for other new products. Consequently, over the 20-year
period, FDA estimates the PV of the costs of the accelerated investment
in bar coding technology by hospitals, including the annual operating
expenses and productivity losses, to be $7.2 billion. The estimated
annualized cost is $680.0 million. Table 4 shows the expected annual
incremental expenditures by year for adopting hospitals under the
proposed rule.
Table 4.--Expected Incremental Hospital Expenditures (in Millions) Per
Year\1\
------------------------------------------------------------------------
Incremental Cost to Hospitals
Evaluation Year Adopting Bar Codes\1\
------------------------------------------------------------------------
1 $1.2
2 $18.9
3 $129.8
4 $506.9
5 $1,187.4
6 $1,823.6
7 $2,062.7
8 $1,934.0
9 $1,617.8
10 $1,226.8
11 $834.3
12 $499.2
13 $254.5
14 $102.4
15 ($15.3)\2\
16 ($29.4)
17 ($34.5)
18 ($35.6)
19 ($36.0)
20 ($36.0)
------------------------------------------------------------------------
\1\ Reflects both negative and direct positive fixed productivity
changes. Hospitals expected to install bar code systems without the
proposed rule would not achieve productivity gains associated with
internal repackaging. Therefore, given the different expected rates of
technology adoption with the proposed rule, the hospital sector would
have net productivity gains beginning in the 15th evaluation year.
\2\ Numbers in parentheses indicate cost reductions from baseline.
H. Reduction in Preventable Adverse Drug Events
The benefits of the proposed rule are focused on the reductions in
ADEs that would follow the earlier use of bar code reading technology
and bar coded drug products. We have not quantified all of the other
institutional benefits of computerized systems and medical informatics,
but have estimated a potential range of efficiency gains. Any ADEs
avoided during a period are analyzed as if they occur at the end of the
period.
ERG determined that, under current conditions, about 1.25 million
ADEs occur each year in the United States, of which 372,400 are
preventable. As discussed above, the proposed rule would substantially
reduce the number of ADEs caused by errors originating in the
dispensing and administration of pharmaceutical or blood products in
hospitals. Studies of medication errors in hospitals that have
installed bedside bar coding and use internally applied labels show
error interception rates of from 70 percent to 85 percent (Malcolm et
al., 1999; Yang et al., 2001; Brown, 2002; Rough, 2002; and Churchill,
2002). Other industry experts, however, suggest that those published
interception rates would not be as high if the technology were widely
dispersed, because of the likelihood of events such as lost wristbands,
erroneous bar codes, or intentional system bypasses. Therefore, FDA and
ERG have assumed that bar code system use would produce no reduction in
prescribing and transcribing errors, but that its use would intercept
one-half of 45.1 percent of all preventable ADEs that now originate in
the dispensing and administration stages of the medication process.
Thus, ERG assumed that if all hospitals adopted bar code systems, the
number of preventable ADEs would fall by 22.6 percent (45.1 times 0.5),
which would prevent about 84,200 ADEs per year (372,400 times 0.226).
This equals a reduction of 12.8 preventable ADEs per year for an
average hospital. We believe the assumption that bar code readers could
intercept one-half of both dispensing and administration errors is
reasonable and conservative, but we specifically invite comment on
alternative interception rates. This assumption is tested as a
sensitivity analysis.
We estimate that the proposed rule, by stimulating earlier hospital
investment in bar code scanning systems, would produce a corresponding
increase in the number of avoided ADEs. To project the aggregate number
of ADEs avoided due to the proposed rule, ERG calculated the number of
ADEs per hospital that would be avoided by bar coding systems and
multiplied that number by the additional number of hospitals that would
use bar coding reading systems during each year of the evaluation
period. For example, during the 10th evaluation year, our model
predicts that 3,295 more hospitals would have installed bar code
reading systems than would have installed them in the absence of the
rule. The additional hospitals using bar codes would intercept an
estimated 42,182 errors (12.8 ADEs per hospital times 3,295 hospitals)
that would otherwise have resulted in ADEs during that year. Over the
entire evaluation period, this methodology predicts that the
accelerated investment would avoid over 413,000 ADEs.
I. Value of Avoided ADEs
FDA and ERG estimated two values of avoided preventable ADEs.
First, ERG estimated the avoided direct hospital
[[Page 12524]]
costs needed to cover additional tests, longer patient stays, and other
direct expenses. Based on published studies, the estimated average
direct cost of an ADE not attributable to prescribing error is $2,257
(Classen et al., 1997; Bates et al., 1997; and Senst et al., 2001).
This figure represents a weighted average of direct hospital costs over
all degrees of ADE severity and does not include patient pain and
suffering or liability. Second, ERG and FDA estimated the monetized
value of avoiding decreases in quality-adjusted life years (QALYs) due
to ADEs. This latter approach attempts to value a patient's subjective
ADE experience, including inconvenience, pain and suffering, foregone
earnings, and other out-of-pocket costs.
ERG examined the literature to determine the probability
distribution of specific symptoms associated with ADEs. These reported
symptoms range from rashes and itching to cardiac arrhythmia, renal
failure, and mortality. The duration of each symptom (additional length
of hospital stays) ranged from about 0.7 days to 5.5 days (except for
mortality). ERG then examined reported preference scores from the
Harvard Center for Risk Analysis' (HCRA) Catalog of Preference Scores,
which includes a survey of the health economics literature and presents
published estimates of preferences for defined symptoms. The preference
scores ranged from 0.95 (for significant but not serious ADEs) to 0.00
for death. Typical symptoms encountered with serious ADEs had a
preference score of 0.8, while life-threatening ADEs had a derived
preference score of 0.6. We note that the reported preference scores
vary widely by definition and methodology and must be interpreted with
great caution.
ERG calculated the change in QALYs expected from an avoided ADE as
one minus the preference score multiplied by the duration of the event.
For example, minor drug toxicity (such as a rash) has a derived
preference score of 0.95 and a reported duration of 2 days (0.005
years). The change in QALYs expected for such an event is 0.05 (one
minus 0.95) times 0.005, or 0.0003 QALYs. There are no precise means of
valuing QALYs. One approach is to derive the value from studies that
estimate the willingness-to-pay to avoid a statistical death. For
example, values derived from occupational wage-premiums to accept
measurable work-place risk suggest a figure of about $5 million per
statistical death avoided. Apportioning this value over the remaining
life expectancy of the average workforce member and adjusting for
future disability implies (at a 7-percent discount rate) a value per
QALY of about $373,000. Thus, in the example above, the value of the
decease in QALYs due to minor drug toxicity would be $102.
ERG examined the literature and found that by combining several
published accounts, 36.1 percent of the outcomes associated with
preventable ADEs were deemed significant, 41.7 percent were deemed
serious, 19.4 percent were deemed life threatening (of which 10 percent
(or 1.9 percent of the total) result in permanent conditions), and 2.8
percent resulted in fatalities. Overall, these assumptions indicate
that the weighted average preference value for each avoided preventable
ADE is $181,600. We note that this value is very sensitive to the
number of fatal preventable ADEs.
J. Aggregate Benefit of Avoiding ADEs
FDA and ERG estimated the benefit of avoiding ADEs due to the use
of bar code reading systems by multiplying the value of each avoided
preventable ADE by the expected number of ADEs avoided. As stated
earlier, an average hospital is expected to have 12.8 fewer preventable
ADEs each year after installing bar code reading technology. The direct
cost savings by avoiding treatment ($2,257 per ADE) and the weighted
preference value ($181,600 per ADE) indicate a societal value of
$183,900 per average ADE avoided, and a societal benefit of about $2.35
million per facility per year. We multiplied this derived value per
hospital by the expected difference in the number of hospitals with
installed bar code technology under the proposed rule. For example,
during the 10th evaluation year, an estimated 3,245 additional
hospitals would have installed bar code reading systems due to the
proposed rule. We would expect the increased use of these systems to
result in 42,182 fewer ADEs. The estimated PV of avoiding these ADEs is
$7.7 billion. The PV of the societal benefits that would result from
reductions in ADEs over the entire 20- evaluation period is $41.4
billion. The annualized societal benefit of the reduced number of ADEs
is $3.9 billion. Table 5 illustrates the expected reduction in ADEs for
the entire evaluation period.
Table 5.--Expected Reduction in ADEs by Year with Bar Code (Societal
Benefits in Millions)
------------------------------------------------------------------------
Evaluation Societal Benefit of Avoided
Year Additional ADEs Avoided ADEs
------------------------------------------------------------------------
1 38 $7.0
2 627 $113.7
3 4,314 $781.9
4 16,845 $3,053.5
5 39,462 $7,153.4
6 60,634 $10,991.1
7 68,646 $12,443.6
8 64,486 $11,689.5
9 54,144 $9,814.7
10 41,344 $7,494.5
11 28,493 $5,164.9
12 17,523 $3,176.5
13 9,510 $1,724.0
14 4,531 $821.4
15 1,882 $341.1
16 678 $123.0
17 218 $39.4
18 51 $9.3
19 13 $2.3
20 0 0
------------------------------------------------------------------------
[[Page 12525]]
K. Other Benefits of Bar Code Technology
The availability of standardized bar codes would result in
additional benefits to patients and the health care sector. As bar
codes are an enabling technology, their adoption for hospital patient
care would foster their use in other hospital and nonhospital settings.
With automated systems, hospitals would no longer need to repackage and
self-generate bar codes. Hospital pharmacies and wards would likewise
take advantage of the availability of bar coded products to generate
new production efficiencies for activities such as reporting, record
keeping, purchasing, and inventory controls. For example, integrated
scanning systems may allow for electronic versions of daily Medication
Administration Records (MARs) and pharmacy reconciliation reports.
According to industry experts, if these activities could be avoided by
automatically generating the records, an average sized hospital could
save as many as 592 hours of pharmacist resources and 4,233 hours of
nursing resources each year. The estimated annual efficiency savings of
avoiding these opportunity costs equals $167,000. Moreover, ERG and FDA
believe the identified potential gains from electronic MAR and
reconciliation reports may account for only between 50 and 80 percent
of the potential gains in these areas. If so, the total estimated
annual efficiency gains to an average hospital would range from
$209,000 to $334,000 from use of bar code scanners in pharmacies and
patient care wards. These new operation efficiencies would continue
beyond the evaluation period. If such gains were obtainable, the PV of
these gains for the sector as a whole would be between $4.8 billion and
$7.6 billion. The average annualized gains of these potential
efficiencies are between $451.5 million and $721.5 million.
The proposed rule could also increase the use of medical
informatics in locations other than hospitals. Other health care
facilities, such as physician offices and home health delivery systems,
would be more likely to adopt bar coding and scanning systems to
safeguard the use of patient medications and achieve additional
efficiencies. We could not quantify the value of all of these expected
additional uses of bar coding, but note that they are realistic and
practical future uses of the technology.
L. Distributional Effects of Bar Code Technology
Bar code usage would likely result in distributional transfers
between sectors of society. For example, bar code use could reduce
hospital payments due to punitive damage awards from potential
lawsuits. According to legal data bases (JVR, 2002), there were
approximately 35,000 personal injury and malpractice claims per year
between 1995 and 2000 in the health care sector. Approximately half of
these claims involved pregnancies with the remainder including surgical
claims, misdiagnosis, and medication errors. If these claims are
distributed equally by type and sector (inpatient and outpatient), we
estimate that approximately 600 legal claims per year are potentially
associated with preventable ADEs in hospitals. This implies that only
0.2 percent of all preventable ADEs are likely subject to legal claims
(600 divided by 372,400). The average jury award for damages from
medication errors was $636,800 in 2000, although only 40 percent of the
cases were decided for plaintiffs. Estimated pre-trial settlements for
malpractice claims in 2000 averaged $318,400. We do not have data on
the proportion of settlements, but have assumed that 80 percent of
claims are settled before trial. If so, the average likely award per
preventable ADE is $532. Bar code systems are expected to avoid 12.8
ADEs per year in an average hospital. This implies an average reduction
in annual legal awards of $6,800 per hospital and $43.9 million for all
hospitals. Fewer awards would also result in lower malpractice
insurance premiums, which would reduce other hospital expenditures. The
General Accounting Office (GAO, 1995) reported hospital malpractice
insurance rates ranging between $511 and $7,734 per bed, depending on
location. Recent reports have suggested that annual premiums have
increased to approximately $1,250 to $18,800 per bed. Although we were
unable to quantify average hospital malpractice premiums or precise
reductions in hospital liability insurance premiums due to the use of
bar codes, the potential exists for industry savings. While reductions
in legal settlements or liability insurance premiums represent
transfers between hospitals, third-party payers, attorneys, and
patients, and are not opportunity gains or losses, such reductions
could increase the efficient allocation of resources by sector.
Bar code systems may also increase hospital revenues by improving
the ``cost capture rate.'' One published study (Lee et al., 1992)
reported the cost capture rate (the ratio of billed uncontrolled
pharmaceuticals to all pharmaceuticals used) increased from 63 percent
to 97 percent after installation of computerized systems in nursing
wards. According to the authors, this would imply an increase in
revenues of approximately $65,000 per year for an average hospital.
While such accounting improvements are transfers from patients and
third-party payers to hospitals rather than reduced opportunity costs,
this practice illustrates the potential use of bar code scanning
systems in increasing the efficient allocation of resources by sector.
Other potential transfers may include avoidance of certain billing
errors or increased timeliness of payment.
Although reduced lawsuits and liability insurance and increased
cost capture represent transfers, they are also critical in determining
whether and at what rate hospitals will adopt bar code technology.
Combined with the efficiency gains explained previously, these
transfers should allow hospitals to cover a significant portion of
their bar code technology investment.
M. Comparison of Costs, Expenditures, and Benefits
The annualized costs of the proposed rule to the manufacturing,
packaging, and labeling sectors totals $3.2 million. Hospitals would
incur an annualized cost of $0.6 million to continue current operating
practices. FDA resource costs to support the regulation equal an
estimated $1.3 million per year. Thus, we estimate the annualized
regulatory cost of the proposed rule to be $5.1 million. In addition,
we expect the proposed rule to spur earlier investment by hospitals in
bedside point-of-care systems that read bar coded labels. The
annualized opportunity cost of this accelerated investment in
technology is $680.0 million for the entire industry. Table 6 presents,
by sector, the present value of the estimated regulatory costs, the
annual costs expected at the end of the 20-year evaluation period, and
the annualized costs over the entire evaluation period. The estimated
reduction in hospital operating expenses results from the assumption
that hospitals could eliminate in-house labeling operations.
[[Page 12526]]
Table 6.--Costs and Other Expected Expenditures of Proposed Rule (in
Millions of Dollars; 20-Year Evaluation Period; 7-Percent Discount Rate)
------------------------------------------------------------------------
Annual
Present Value of Operating Costs Annualized
Industry Sector Costs at End of Costs
Period
------------------------------------------------------------------------
Prescription Drugs $30.4 $0.4 $2.9
OTC Drugs $2.1 \1\ $0.2
Blood Products $0.7 \1\ $0.1
Sub-Total $33.2 $0.5 $3.2
Manufacturers
Hospital Regulatory $6.1 (-$0.7)\2\ $0.6
Sub-Total Private $39.8 (-$0.2) $3.8
Sector Regulatory
Costs
FDA Oversight $13.8 $1.3 $1.3
Total Regulatory $53.1 $1.1 $5.1
Costs
Expected $7,204.3 (-$348.8)\2\ $680.0
Expenditures From
Healthcare Sector
------------------------------------------------------------------------
\1\ Less than $0.05 million
\2\ Hospital operating costs decrease due to fewer in-house packaging
and bar coding operations.
As discussed above, we estimate the annualized public health
benefit to be $3.9 billion. This estimate includes the societal value
of the avoided ADEs as well as the reduced hospital stays expected due
to the earlier use of bar code reading technology. Other indirect
potential benefits, such as efficient inventory control, patient
tracking, electronic generation of daily reconciliation and medication
reports, or other administrative gains were estimated to contribute an
annualized amount of between $451.5 and $721.5 million in efficiency
gains to hospitals. The likely distributional effects of revenue
enhancement, other cost capture measures, or reduced legal costs are
not completely quantified, but are likely.
If all costs and expenditures are combined, the annualized outlays
total $685.1 million. The expected annualized public health benefit of
over $3.9 billion far outweighs these outlays. Thus, the annual net
benefits for the entire evaluation period are greater than $3.2
billion. Moreover, this calculation does not account for the potential
efficiency gains as described above.
N. Uncertainty and Sensitivity
We recognize that the expected impacts of the proposed rule are
based on a large number of uncertain assumptions. We attempted to
account for this uncertainty by examining the key assumptions in the
analysis.
1. Voluntary Share of Labeling Costs
The costs attributable to the proposed rule are the incremental
costs above what the industry would incur in the normal course of
business. As briefly discussed earlier, many drug products change
labels, on average, as often as once a year for marketing or design
reasons. The ERG estimate, however, assumes that 30 percent of the
required labeling costs would be attributable to the regulation, due to
the production process changes that would be required to use bar coding
equipment. In addition, we believe that market driven label changes are
not completely comparable to regulation required changes. We reviewed
the sensitivity of this assumption by examining the impact that would
occur if no required re-labeling costs were attributable to the
regulation, 75 percent were attributable to the regulation, or all re-
labeling costs were attributable to the regulation. These scenarios
altered the current estimate of $3.2 million in annualized costs for
manufacturers, repackers, and relabelers to a range of from $2.7
million (if all costs are considered voluntary) to $4.2 million (if no
additional labeling costs are considered voluntary).
2. Packaging Decisions
We are sensitive to industry packaging decisions and asked our
contractor to specifically assess the impact of the proposal on the
future of unit-dose packaging (e.g. blister packs) trends. The concern
was whether bar code printing would reduce the use of unit-dose
packaging because it would add more to its cost than to other formats.
In general, ERG found that although the overall demand for the product
is inelastic, the demand for a particular package type is more elastic
in that it is affected by relative prices to a greater degree. Industry
contacts, however, noted that this impact is moderated because
consumers of some OTC drug product are accustomed to blister packs, and
manufacturers could lose market share if they abandon this format.
Also, many hospitals require drug purchases to be in unit-dose form.
ERG concluded that although a bar code requirement would increase
the relative cost of the unit-dose version of a product, the cost
increment would not be great enough to significantly impact the market.
In fact, ERG found that the expected reduction in hospital over-
packaging could increase market demand for unit-dose products despite
the cost difference. Thus, we expect that the proposed rule would not
have a significant impact on product packaging choices.
3. Mortality Associated with ADEs
FDA's contractor estimated that 2.8 percent of preventable ADEs are
fatal. This was derived by averaging results from several medical
studies. These studies relied on relatively small samples and varying
methodologies. Due to the uncertainty attached to this estimate and the
major impact this assumption has on valuing public health benefits, we
tested two additional mortality rates: one percent and 0.1 percent.
These rates reduce the expected value of an avoided ADE from $183,900
to $91,500 and $46,400, respectively, by changing the probability
distribution of the expected outcomes of ADEs. The impact on the
expected annualized benefits of ADE avoidance fall from $3.9 billion to
$2.0 billion and $1.0 billion respectively. These estimated benefits
continue to exceed the costs.
4. Value per QALY
There is no precise measure of value for quality-adjusted life-
year. We have used published estimates of society's implied value of a
statistical life (VSL) of $5 million derived from wage premiums
required to attract employment to higher risk occupations. The life
expectancy of a 35 year-old blue-collar male employee (the typical
characteristics of the population for most of the wage premium studies)
was adjusted for expected future bed and nonbed disability. When the
implied VSL is amortized over the 41.3 years of adjusted life-
expectancy, using a 7-percent discount rate, the resulting value
($373,000) may suggest a societal willingness-to-pay for a QALY. Cost-
[[Page 12527]]
effectiveness studies in the health economics literature have often
relied on lower values, such as $100,000, to represent the monetary
value of a QALY. In addition, the $5 million VSL is based on research
conducted in the early 1990's and relies on relative risk and relative
wages. Other typical estimates of the VSL have ranged from as low as $2
million to as high as $8 million.
We analyzed the societal benefit of the proposed rule using
$100,000 as the QALY value for preventing a nonfatal ADE and the low
VSL estimate of $2 million as the willingness-to-pay to avoid a
fatality. The willingness-to-pay to avoid an average ADE decreased from
$183,900 to $70,800 using these parameters. Overall, the estimated
annualized benefit of the proposed rule fell from $3.9 billion to $1.5
billion, which would still exceed the estimated annualized costs.
5. Hospital Response Rates
The expected benefits rely on a faster rate of hospital acceptance
of bar code technology than the rate expected in the absence of the
regulation. The current estimate of public health benefits is based on
all hospitals acquiring bar coding systems within 10 years as compared
to 20 years without the proposed rule. However, because we are not
requiring hospitals to make this investment, we examined the impact of
different diffusion rates. ERG examined two additional scenarios: one
in which the technology is accepted within 20 years with a rule as
compared to 30 years without a rule, and one in which technology is
accepted within 15 years, as compared to 20 years with a rule. Both
cases decrease costs and benefits. The first case reduced expected net
annualized net benefits from $3.2 billion to $2.0 billion. Annualized
hospital expenditures declined from $680 million to $408 million, and
benefits decreased from $3.9 billion to $1.8 billion. The second case
reduced annualized net benefits to $1.5 billion. Annualized hospital
expenditures declined from $680 million to $303 million, and benefits
decreased from $3.9 billion to $1.8 billion. The public health benefits
of the proposed rule would still exceed costs and expenditures with
these slower diffusion rates.
6. Hospital Intercept Rates with Machine-Readable Technology
The expected benefit of avoidance of patient ADEs is dependent on
the expected rate of error interception. For this analysis, ERG found
that about 45 percent of the errors that lead to preventable ADEs
originate in the dispensing and administration stages of the medication
process and that the use of bar coded information and installed systems
would intercept about 50 percent of these errors. Because of the direct
relationship between expected interception rates and avoided ADEs, we
tested the impact of the assumed rates. Although the literature has
implied that interception rates as high as 85 percent are obtainable,
ERG assumed a 50 percent rate to account for potential nonoptimal use
of technology. If the true increase in interception rates were between
80 percent and 20 percent, the total number of avoided ADEs would be
between 660,400 and 165,000. The monetized annualized value of these
avoided ADEs would vary from the current estimate of $3.9 billion to
the lower and higher values of $1.6 billion (with a 20 percent
improvement in interception rates) or $6.2 billion (with an 80 percent
improvement in interception rates). From a societal perspective,
therefore, the accelerated technology investment appears reasonable
even with significantly lower interception rates.
7. Productivity Losses in Hospital Wards
The decision by hospitals to make significant investments in bar
code reading technology is highly dependent on expected productivity
changes in the delivery of bedside care by nurses. Our current analysis
assumes a 3-percent productivity loss of ward nurses due to the use of
this new technology. We examined the sensitivity of this estimate and
found that if long-term productivity loss approximated only 1 percent
of the current workload, the average annualized cost of accelerated
hospital investments would decrease from $680.0 million to $246.7
million. However, if the productivity loss of nursing resources was as
great as 5 percent, the annualized expenditures by hospitals would
increase to $1.2 billion. In order for the productivity losses to
outweigh the expected benefits, however, there would have to be an
almost 700-percent estimated productivity loss. We recognize the
extreme uncertainty of this projection and particularly invite public
comment in this area.
8. Minimum Hospital Response
The expected benefits rely on a faster rate of hospital acceptance
of bar code technology than the rate expected in the absence of a rule.
The current estimate of public health benefits is based on all
hospitals acquiring bar code systems within 10 years as compared to 20
years without the proposed rule. However, because we are not requiring
hospitals to make this investment, we examined the minimum number of
hospitals needed to install systems in order to be confident that
benefits exceed costs. The ratio of costs to benefits implies that if
only 0.05 percent of all hospitals in the United States (three
facilities) make this investment 10 years earlier, the rule would
generate sufficient public health benefits to justify costs. This
estimate is based on average hospital size. We tested this assumption
by assuming that only very small (fewer than 50 bed capacity) hospitals
would adopt the technology. In this case, 22 hospitals would be
required to adopt the technology (0.3 percent of all hospitals and 1.9
percent of all small capacity hospitals) in order for the expected
benefits to exceed the costs.
9. Investments by Hospital Size
The internal decision to acquire and use new bar code reading
technology could be affected by the size of the purchasing hospital.
Hospitals that have already installed this equipment are, for the most
part, fairly large or part of a large network of hospitals. Because the
benefits of error interception are dependent on the number of annual
admissions, we were concerned about the likelihood of technology
adoption by small hospitals.
According to the most recent census, there are 1,117 hospitals in
the United States with capacities fewer than 50 beds. These hospitals
account for only about 3 percent of the estimated annualized
opportunity cost of investment from this proposed rule, because the
potential productivity losses are not as great as for larger hospitals.
The annualized opportunity costs per facility with fewer than 50 beds
is approximately $57,100. However, because of the fewer admissions to
hospitals of this size, we estimate that the interception rate of the
bar code technology is expected to result in an average of 1.7 avoided
ADEs per year per facility. The estimated societal benefit of avoiding
1.7 ADEs is $303,800. If these small hospitals adopt technology at the
same accelerated rate as all hospitals, the annualized benefit per
hospital is $86,900, or more than the investment.
We are aware that the estimated direct annual hospital cost savings
of avoiding ADEs alone ($2,257 per avoided ADE) may not cover the costs
of the expected earlier investment pattern. For example, the average
facility with fewer than 50 beds would experience direct annual cost
savings of $3,837 (1.7 ADEs avoided x $2,257) and annualized costs
[[Page 12528]]
of $57,100. As noted, the investment decision to install bar code
reading technology is voluntary and would include consideration of
patient safety and other cost-savings. We have estimated that potential
reductions in resources needed to generate reports and to keep track of
records may likely vary between $27,400 and $43,700 per year for a
small hospital. Other institutional gains, including transfers such as
increased revenue capture rates and reduced malpractice awards, may
also affect internal decisions. Many industry representatives have
indicated their willingness to invest in this technology. Nonetheless,
even if some hospitals choose to delay or not to invest, this rule
would still produce substantial societal benefits.
O. Small Business Analysis and Discussion of Alternatives
We believe the proposed rule is unlikely have a significant impact
on a substantial number of small entities. Despite this, we have
prepared an initial Regulatory Flexibility Analysis (IRFA) and invite
comment from affected entities. In addition, the regulation is
considered a significant economic impact under UMRA and alternatives
are examined and briefly discussed here.
1. Affected Sectors and Nature of Impacts
We described the affected industry sectors earlier in this section.
The proposal would directly affect manufacturers of pharmaceutical and
biological products (NAICS 325412 and NAICS 325414), packaging services
(NAICS 561910), and blood and organ banks (NAICS 621991), and
indirectly affect hospitals (NAICS 622). We accessed data on these
industries from the 1997 Economic Censuses and estimated revenues per
establishment. Although other economic measures, such as profitability,
may be preferable alternatives to revenues in estimating the
significance of regulatory impacts in some cases, any reasonable
estimate of profits would not change the results of this analysis.
These revenues were updated to 2000 values by using the Consumer or
Producer Price Index as appropriate.
a. Pharmaceutical Manufacturers (NAICS 325412). The Small Business
Administration (SBA) has defined as small any entity in this industry
with fewer than 750 employees. According to census data, 84 percent of
the industry is considered small. The average annual revenue for these
small entities is $26.6 million per entity. Small manufacturers of
prescription and OTC drug products dispensed under an order and
commonly used in hospitals would be required to generate and label
products with bar coded information. We estimate the annualized
compliance costs for small entities in this industry at $1,800 per
entity. This is less than 0.1 percent of their annual revenues. We
believe this does not constitute a significant impact on a substantial
number of small entities in this industry.
b. Biological Product Manufacturers (NAICS 325414). The SBA has
defined as small any entity in this industry with fewer than 500
employees. According to census data, 68 percent of the industry is
considered small. The average annual revenue for these small entities
is $4.7 million per entity. Small manufacturers of biological products
would be required to use standardized bar code information on their
products. We estimate the annualized compliance costs for small
entities in this industry at $600 per entity. This is less than 0.1
percent of their annual revenues. We believe this does not constitute a
significant impact on a substantial number of small entities in this
industry.
c. Packagers (NAICS 5619190). The SBA has defined as small any
entity in this industry that has less than $6 million in annual
revenues. On this basis, almost 75 percent of the industry is
considered small. The average annual revenue for small entities is $1.7
million per entity. Small packagers would be required to apply bar
coded information to all affected products. This would require printing
and process improvements to packaging operations. We estimated the
annualized compliance cost for small entities in this industry at $240
per entity. This is less than 0.1 percent of their annual revenues. We
believe this does not constitute a significant impact on a substantial
number of small entities in this industry.
d. Blood and Organ Banks (NAICS 621991). The SBA has defined as
small any entity in this industry with less that $8.5 million in annual
revenues. On this basis, 40 percent of the industry is considered
small. The average annual revenue for small entities is $1.4 million
per entity. Small blood banks and collection centers would be required
to apply standardized bar coded information on all blood products. This
would require printing and process improvements to blood handling
operations. We estimated the annual compliance cost for small entities
in this industry at $100 per entity. This is less than 0.1 percent of
their annual revenues. We believe this does not constitute a
significant impact on a substantial number of small entities in this
industry.
e. Hospitals (NAICS 622). The SBA has defined as small any entity
in this industry with less than $29.0 million in annual revenues.
According to census data, 35 percent of the industry is considered
small. The average annual revenue for small entities is $12.6 million
per entity. There is no specific regulatory requirement for hospitals
to respond to this proposed rule. We anticipate that the rule would
make the investment in bar code technology more attractive to
hospitals, but the rule would not require such investments. Hospitals
that have already installed bar code reading systems and internally
affix self-generated information might need to prematurely upgrade or
replace currently installed scanners in order to capture bar coded
information on small vials or bottles. These hospitals would also
achieve productivity gains by avoiding the resources now used to self-
generate bar code readable information. The total annual net cost of
the proposed rule is estimated at $3,300 per facility, which is equal
to less than 0.1 percent of annual revenues. We believe this does not
constitute a significant impact on a substantial number of small
entities in this industry.
2. Alternatives
We considered several alternatives to the proposed rule. Each is
discussed below. We invite comments and suggestions for additional
potential alternatives.
a. Do Nothing. This alternative would not result in any change in
current labeling or packaging practices. We believe that, in the
absence of agency action, hospitals would gradually purchase and
utilize independent bar code reading systems, but that it would take 20
years before they were installed in all facilities. We rejected this
alternative because of the expected positive net benefits of the
proposal. Also, we believe that standardizing bar codes would generate
additional health and production efficiencies for a variety of
different health care sectors.
b. Requiring Variable Information. We considered requiring
additional information in bar codes, such as expiration dates and lot
numbers. The incremental benefit of this data would include improved
inventory control and ease of recalls. In addition, we are aware that
some firms are voluntarily applying this information. However, we were
unable to quantify potential public health benefits for this additional
information, and the estimated additional annualized cost of this
[[Page 12529]]
alternative was $46.0 million. We did not select this alternative
because we could not demonstrate that the added benefits would exceed
the added costs.
c. Covering All OTC Drug Products. We considered requiring all OTC
drug products to include bar coded information. This alternative is
currently rejected (although we invite comments on the OTC drugs to be
covered) because the additional costs do not appear to be justified by
the expected benefits. At this time, most noninstitutional settings are
unlikely to have access to bar code reading systems. Therefore, we
could not identify any significant reductions in ADEs due to this
alternative. Including all OTC drug products would create estimated
additional annualized costs to the manufacturing sector of $1.9
million. The expected annualized costs of the regulation therefore
would increase from $5.1 million to $7.0 million with no additional
quantifiable benefit.
d. Exemption for Small Entities. We considered exempting small
entities, but rejected the alternative due to the modest projected
impact of this initiative on small businesses and the lack of label
standardization that would result.
e. FDA Selecting a Specific Symbology. We considered requiring bar
coded information with a specific symbology. The rationale for
considering this option was to minimize uncertainty to hospitals in
selecting systems that would be able to confidently read the specific
language. We decided, however, that identifying a specific symbology
might adversely impact future innovations in other machine-readable
technologies. The selected alternative would allow individual
facilities and suppliers to devise systems that would maximize their
own internal efficiencies, as long as the standardized information
could be accessed. The lack of consistent universal standards has been
a major impediment to the use of this technology. As long as
symbologies could be read within a single standard, however, the
identified market failure would be overcome. In addition, the expected
costs of this proposal would be much greater than the selected
alternative. Annualized costs to manufacturers would increase to $8.3
million and significant costs would occur to the retail sector due to
the need for accelerated upgrade or replacement of currently installed
scanners. Retail pharmacies would incur annualized costs of $14.4
million. Consequently, we rejected the alternative of identifying a
specific symbology.
3. Outreach
We held a public meeting on July 26, 2002 to solicit comments from
the affected sectors. Interested parties from the health care sector,
manufacturing sector, retail sector, and equipment suppliers provided
comment and insight to the agency. In addition, we met with various
industry groups in order to ensure viewpoints were appropriately
considered. These insights affected the regulatory considerations, and
additional outreach is planned during the regulatory process.
P. Conclusion
We have examined the proposed rule and find that the expected
benefits outweigh the costs and that the regulation would improve
public health. The detailed analysis that provides references and
support for the summary that appears in this section is available in
the docket as Ref. 46.
VIII. Request for Comments
In addition to requesting general comments on the proposal, and the
specific requests on assumptions contained in the economic analysis, we
are seeking comment on the following specific issues identified in the
description of the proposed rule (presented here for the convenience of
the reader):
1. Whether we should require bar codes on prescription drug
samples, and the costs and benefits associated with such bar codes (see
section II.B.2.a of this document).
2. The risks and benefits of including vaccines in a bar code rule
(see section II.B.2.a of this document).
3. What terms we should use to describe OTC drugs that should be
subject to the bar code requirement (see section II.B.2.b of this
document).
4. Information on the costs and benefits associated with putting
lot number and expiration date information in the bar code (see section
II.C.2 of this document).
5. Whether the rule should refer instead to linear bar codes
without mentioning any particular standard or refer to UCC/EAN and
HIBCC standards (see section II.D.1 of this document).
6. Additional information regarding bar code scanning technology
and the ability of bar code scanners to read different symbologies (see
section II.D.1 of this document).
7. Whether the rule should adopt a different format (whether that
format is a symbology, standard, or other technology), considering the
following issues:
[sbull] What other symbol, standard, or technology should we
consider, either in place of a linear bar code or in addition to it?
[sbull] How accepted is that symbol, standard, or technology among
firms that would have to affix or use that symbol, standard, or
technology?
[sbull] Will hospitals be able to read or use the symbol, standard,
or technology, either with existing equipment or equipment under
development? (see section II.D.1 of this document).
8. Whether any specific product or class of products should be
exempt from a bar code requirement and the reasons why an exemption is
considered to be necessary (see section II.F of this document). In
addition, how could we create a waiver provision that would minimize
the potential for misusing the waiver?
9. Whether the implementation period for a final rule can and
should be shortened from 3 years to some other specific time period
(see section II.G of this document).
10. Whether we should require the use of ISBT 128 for blood
products, a specific symbology that is consistent with that required
for drugs in proposed Sec. 201.25, or ``machine-readable symbols'' as
approved by the Director of CBER (see section II.H of this document).
11. How the proposed rule might affect hospitals where patients
receive blood or blood components, particularly with respect to a
hospital's decision to purchase a machine reader (e.g., scanner) that
can properly identify the intended recipient of the blood or blood
component, the machine readable information encoded on the blood or
blood component label, and perhaps the linear bar codes appearing on
drugs and OTC drugs that are dispensed pursuant to an order and
commonly used in the hospital (see section II.H of this document).
12. Whether any of the alternatives discussed in the economic
analysis have merit (see section VII.O of this document).
Interested persons may submit to the Dockets Management Branch (see
ADDRESSES) written or electronic comments regarding this document.
Submit a single copy of electronic comments to http://www.fda.gov/dockets/ecomments or two hard copies of any mailed comments, except
that individuals may submit one hard copy. Comments are to be
identified with the docket number found in brackets in the heading of
this document. Received comments may be seen in the Dockets Management
Branch between 9 a.m. and 4 p.m., Monday through Friday.
[[Page 12530]]
IX. References
The following references have been placed on display in the Dockets
Management Branch (see ADDRESSES) and may be seen by interested persons
between 9 am. and 4 p.m., Monday through Friday.
1. Institute of Medicine, ``To Err Is Human: Building a Safer
Health System,'' 1999.
2. McDonald, C. J., M. Winer, and S. L. Hui, ``Deaths Due to
Medical Errors Are Exaggerated in Institute of Medicine Report,''
Journal of the American Medical Association, 284:93-95, July 5,
2000.
3. Leape, L. L., ``Institute of Medicine Medical Error Figures
Are Not Exaggerated,'' Journal of the American Medical Association,
284:95-97, July 5, 2000.
4. Brennan, T. A., ``The Institute of Medicine Report on Medical
Errors--Could It Do Harm?'' New England Journal of Medicine, 342:
1123-1125, April 13, 2000.
5. Honig, P., J. Phillips, and J. Woodcock, letter to the
editor, ``How Many Deaths Are Due to Medical Errors?,'' Journal of
the American Medical Association, 284: 2187-2188, November 1, 2000.
6. Agency for Healthcare Research and Quality, ``Reducing and
Preventing Adverse Drug Events to Decrease Hospital Costs'' at pages
4 to 6.
7. Department of Health and Human Services, ``HHS News:
`Secretary Thompson Announces HHS Patient Safety Task Force',''
April 23, 2001.
8. Testimony of Tommy G. Thompson, Secretary of Health and Human
Services, before the Senate Committee on Health, Education, Labor,
and Pensions' Subcommittee on Patient Health, May 24, 2001.
9. Letter from Henri R. Manasse, Jr., Executive Vice President
and Chief Executive Officer, ASHP, to the Honorable Tommy G.
Thompson, Secretary of Health and Human Services, dated July 10,
2001, at p. 1.
10. National Coordinating Council for Medication Error Reporting
and Prevention, ``What is a Medication Error?'' (Undated).
11. Phillips, J. et al., ``Retrospective Analysis of Mortalities
Associated with Medication Errors,'' American Journal of Health-
System Pharmacy, 58: 1835-1841, October 1, 2001.
12. Johnson, J. A. and J. L. Bootman, ``Drug-Related Morbidity
and Mortality: A Cost-of-Illness Model,'' Archives of Internal
Medicine, 1949-1956, 1995.
13. Ernst, F. R. and A. J. Grizzle, ``Drug-Related Morbidity and
Mortality: Updating the Cost-of-Illness Model,'' Journal American
Pharmaceutical Association, 41: 192-199, March/April 2001.
14. Bates, D. W. et al., ``The Cost of Adverse Drug Events in
Hospitalized Patients,'' Journal of the American Medical
Association, 277: 307-311, January 22/29, 1997.
15. Bates, D. W., ``Using Information Technology to Reduce Rates
of Medication Errors in Hospitals,'' British Medical Journal, 320:
788-791, March 18, 2000.
16. Puckett, F., ``Medication-Management Component of a Point-
of-Care Information System,'' American Journal of Health-System
Pharmacy, 52: 1305-1309, June 15, 1995.
17. Malcolm, B., R. A. Carlson, C. L. Tucker, and C. Willette,
``Veterans Affairs: Eliminating Medication Errors Through Point-of-
Care Devices,'' Technical paper for 2000 Annual HIMSS Conference,
November 30, 1999.
18. Hokanson, J. A. et al., ``Potential Use of Bar Codes to
Implement Automated Dispensing Quality Assurance Programs,''
Hospital Pharmacy, 20: 327-337, May 1985.
19. Dinklage, K. C., S. J. White, J. C. Lenhart, and H. N.
Godwin, ``Accuracy and Time Requirements of a Bar-Code Inventory
System for Controlled Substances,'' American Journal of Hospital
Pharmacy, 46: 2304-2307, November 1989.
20. Davis, N. M., ``Detection and Prevention of Ambulatory Care
Pharmacy Dispensing Errors,'' Hospital Pharmacy, 25: 18-28, January
1990.
21. Meyer, G. E. et al., ``Use of Bar Codes in Inpatient Drug
Distribution,'' American Journal of Hospital Pharmacy, 48: 953-966,
May 1991.
22. Hynniman, C. E., ``Drug Product Distribution Systems and
Departmental Operations,'' American Journal of Hospital Pharmacy,
48: S22-S35, October 1991 (Supplement 1).
23. Carmenates, J. and M. R. Keith, ``Impact of Automation on
Pharmacist Interventions and Medication Errors in a Correctional
Health Care System,'' American Journal of Health System Pharmacy,
58(9): 779-783, May 1, 2001.
24. Transcript from ``Public Hearing: Bar Coding--A Regulatory
Initiative,'' at pages 13-14 (remarks of Kay Willis, Chief of
Pharmacy, VA Medical Center, Chicago, IL).
25. Comment from McKesson Corp., dated July 26, 2002, at page 5;
this comment is in FDA docket number 02N-0204 as EMC 15.
26. The Leapfrog Group, ``Fact Sheet: Computer Physician Order
Entry (CPOE),'' dated November 2000.
27. Quality Interagency Coordination Task Force, ``Doing What
Counts for Patient Safety: Federal Actions to Reduce Medical Errors
and Their Impact--Report of the Quality Interagency Coordination
Task Force (QuIC) to the President,'' at page 74 (February 2000).
28. National Coordinating Council for Medication Error Reporting
and Prevention, ``Promoting and Standardizing Bar Coding on
Medication Packaging: Reducing Errors and Improving Care,'' adopted
June 27, 2001.
29. American Society of Health-System Pharmacists, House of
Delegates Session-2001, Policy Recommendation F, ``Machine-Readable
Coding,'' dated June 4 and 6, 2001.
30. Testimony of Albert Patterson, Vice-President for
Contracting, Premier, Inc., before the Senate Subcommittee on
Science, Technology, and Space, dated July 23, 2001.
31. Letter from Robert A. Hankin, President and CEO, Health
Industry Business Communications Council (HIBCC), to the Honorable
Tommy G. Thompson, Secretary of Health and Human Services, dated
January 3, 2002.
32. Letter from Herb Kuhn, Corporate Vice-President, Premier,
Inc., and others, to the Honorable Tommy G. Thompson, Secretary of
Health and Human Services, dated January 24, 2002.
33. Letter from Joe Pleasant, Chair of Board, Premier, Inc., and
others for the Coalition for Healthcare eStandards, to the Honorable
Tommy G. Thompson, Secretary of Health and Human Services, dated
March 19, 2002.
34. Food and Drug Administration, ``Guidance for Industry:
Prescription Drug Marketing Act Regulations for Donation of
Prescription Drug Samples to Free Clinics'' (draft), June, 2002.
35. Uniform Code Council, ``Case Study: Alcon Laboratories,
Reduced Space Symbology on Small Healthcare Items from Print to
Beside'' (sample GTIN applied using RSS on 3 mL and 5 mL bottles).
36. Federal Communications Commission, ``In the Matter of Review
of the Commission's Rules and Policies Affecting the Conversion to
Digital Television,'' MM Docket No. 00-39, adopted August 8, 2002,
at page 13.
37. Federal Communications Commission, ``In the Matter of Review
of the Commission's Rules and Policies Affecting the Conversion to
Digital Television,'' MM Docket No. 00-39, adopted August 8, 2002,
``Separate Statement of Commissioner Michael J. Copps.''
38. Federal Communications Commission, ``In the Matter of Review
of the Commission's Rules and Policies Affecting the Conversion to
Digital Television,'' MM Docket No. 00-39, adopted August 8, 2002,
``Separate Statement of Commissioner Kathleen Q. Abernathy.''
39. Uniform Code Council, ``UCC Establishes Sunrise Date of 2005
for Expansion of U.P.C. to EAN-13,'' dated June 9, 1997.
40. Auto-ID Center, Massachusetts Institute of Technology,
``Technology Guide'' at page 4.
41. ASTM, ``F1851-98: Standard Practice for Bar Code
Verification'' (1998).
42. Davis, N.M., ``Initiatives for Reducing Medication Errors:
The Time is Now,'' American Journal of Health-System Pharmacy, 57:
1487-1492, August 15, 2000.
43. Linden, J.V. et al., ``Transfusion Errors in New York State:
An Analysis of 10 Years' Experience,'' Transfusion, 40: 1207-1213
(October 2000).
44. FDA, ``Guidance for Industry: Recognition and Use of a
Standard for the Uniform Labeling of Blood and Blood Components,''
June 2000, at page 1.
45. Food and Drug Administration, ``Guidance for Industry:
United States Industry Consensus Standard for the Uniform Labeling
of Blood and Blood Components Using ISBT 128,'' November 1999, at
section 1, page 2.
46. Eastern Research Group, ``Impact of Proposed Barcode
Regulations for Drug and Biological Products,'' Contract Number 223-
98-8002, Task Order Number 21, December 2, 2002.
47. Eastern Research Group, ``Profile of Machine-Readable
Technologies for Medical Applications,'' Contract Number 223-94-
8031, In partial fulfillment of Task Order Number 8, December 2,
2002.
Appendix
Additional Information on Various Studies Identifying Different Types
of Medication Errors
[[Page 12531]]
This appendix includes summaries of several articles that identify
different types of medication errors, a table illustrating varied
medication error rates among studies, and a list of references cited in
the appendix.
I. Types of Medication Errors Administering the Wrong Dose
Folli et al. examined errant chart orders in two large pediatric
hospitals (Ref. A-1). The study defined an errant chart order as a
potentially lethal error if certain consequences (such as
cardiopulmonary arrest if administered at the dose ordered) resulted.
The authors found that incorrect doses and missed doses were the most
prevalent errors. Overdoses accounted for 55 percent of the dosing
errors, while underdoses led to 26.9 percent of all errors.
In a study of adverse events in hospitalized patients, Leape et al.
reviewed 30,195 randomly selected hospital records and identified 1,133
patients whose disabling injuries were caused by medical treatment
(Ref. A-2). Errors in dose or method of use accounted for 42 percent of
all errors.
In a study of two urban teaching hospitals, Kaushal et al. found
dosing errors to be the most frequent medication error (which the
authors defined as errors in drug ordering, transcribing, dispensing,
administering, or monitoring) and the most frequent preventable adverse
drug event (Ref. A-3).
Lesar et al. conducted a study of prescribing errors at a teaching
hospital (Ref. A-4). The authors' review of 289,411 medication orders
revealed 905 prescribing errors that were detected and averted, and
overdoses and underdoses accounted for 28.7 and 17.8 percent of total
errors respectively.
McCarthy, Kelly, and Reed studied the medication administration
practices of school nurses (Ref. A-5). The authors found that 48.5
percent of school nurses surveyed reported medication errors, and
overdoses or double doses were the third most commonly reported error
(22.9 percent of medication errors).
Administering a Drug to a Patient Who Is Known to Be Allergic
In the Lesar review of medication orders, 6.7 percent of all
medication order errors that were detected and averted involved
prescribing a drug to a patient who is allergic to the prescribed drug
(Ref. A-4).
In an article by Classen et al. involving a case control study of
all patients admitted to a hospital in a 3-year period, medication
errors due to known drug allergies represented 1.5 percent of all
adverse drug events, and all were preventable (Ref. A-6).
Administering the Wrong Drug to a Patient or Administering a Drug to
the Wrong Patient
A study by Thur et al. observed how nurses in two surgical units
prepared to administer parenteral admixtures (which the authors defined
as including only fluids to which one or more drugs were added directly
into a single or primary bottle) (Ref. A-7). The authors defined
``medication error'' as including the administration of the wrong drug
or solution, the wrong dosage of a drug or solution volume, an
unordered or discontinued drug, or two or more pharmaceutically
incompatible drugs in the same admixture. The study involved 100
observations where 331 parenteral admixtures were prepared; unordered
drugs accounted for 3 percent of the errors that were observed. In one
instance, the drug was administered two times per day for 4 days, even
though the order for the drug had been discontinued earlier.
In the Classen et al. article that involved a case control study,
of 905 prescribing errors that were detected and averted, 1.1 percent
of all errors involved prescribing a drug to the wrong patient (Ref. A-
6).
Administering the Drug Incorrectly
In the study by Kaushal et al. that examined 10,778 medication
orders at two urban teaching hospitals, errors involving the drug's
route of administration were the second most common form of medication
error and accounted for 18 percent of the medication errors (Ref. A-3).
These medication errors also accounted for the third-most common form
(14 percent) of potential adverse drug events, which the authors
defined as a medication error having a significant potential for
injuring a patient.
Administering the Drug at the Wrong Time or Missing Doses
In a study of two pediatric critical care units by Tisdale, ``wrong
time'' errors, which were defined as medications administered 30
minutes before or after the scheduled administration time, were the
most prevalent error and accounted for a 16 percent error rate (Ref. A-
8).
In McCarthy, Kelly, and Reed's study of school nurses, of the 315
school nurses who reported a medication error, 251 cited missed doses
as the most common medication error (Ref. A-5).
In their study of the relationship between medication errors and
adverse drug events, Bates, Boyle, et al. found that 53 percent of the
medication errors surveyed involved at least one missing dose of
medication (Ref. A-9).
A recently published study by Barker et al. examined 36
institutions in Colorado and Georgia and found that 19 percent of the
doses administered were in error and that the most prevalent error (at
8 percent of the medication errors) was ``wrong time'' medication
errors (Ref. A-10). The authors defined ``wrong time'' as
administration of a dose more than 60 minutes before or after the
scheduled administration time, or a 30 minute window for medications
that were ordered before, with, or after a meal. However, the ``wrong
time'' medication error rate ranged between zero percent for some
nonaccredited hospitals in Georgia to 26.2 percent for a nonaccredited
hospital in Colorado.
II. Frequency of Medication Errors
Table 1 illustrates the variation in medication error rates among
several studies. Some studies suggest a medication error rate of under
7 percent, whereas others suggest a rate at or above 20 percent. The
differences may be due, in part, to different definitions of medication
error or different research methodology that focused on fatalities,
injuries, or medication orders.
Table 1.--Medication Error Rates Reported in Various Studies
------------------------------------------------------------------------
Definition of Medication
Study Error Used Medication Error Rate
------------------------------------------------------------------------
Observation of nurses ``Medication error'' 21%.
in two surgical units defined as wrong drug or
by Thur (Ref. A-7). solution; wrong dosage
of a drug or solution
volume; an unordered or
discontinued drug; or
two or more
pharmaceutically
incompatible drugs in
the same admixture.
[[Page 12532]]
Review of 101,022 ``Errant medication Medication order
medication orders at order'' considered to be error rate was
2 pediatric hospitals an order that was not in between 4.9 and 4.5
by Folli et al. (Ref. accordance with standard errors per 1,000
A-1). pediatric references, orders.
current published
literature, or dosing
guidelines approved by
the hospital's pharmacy
and therapeutics
committees.
Review of 289,411 Not defined. Prescribing errors
medication orders were detected at a
written during a 1- rate of 3.13 errors
year period by Lesar per 1,000 orders.
(Ref. A-4).
Survey of 26,462 ``Suspected adverse 0.02% fatality rate
patients in 7 reactions'' defined as (6 deaths were
countries; 24 were any undesired or considered
considered to have unintended effect of a preventable).
died as a result of a drug.
drug or group of
drugs, by Porter and
Jick (Ref. A-11).
Review of 30,195 ``Adverse event'' defined Of the adverse
randomly selected as an unintended injury events due to drug
hospital records by caused by medical treatment, 18%
Leape et al. (Ref. A- management and resulted resulted from
2). in measurable negligence, although
disability. The the authors also
reviewers considered an explain that
adverse event to be due negligence occurs
to ``negligence'' if not merely when
they felt there was a there is error, but
deviation from accepted when the degree of
norms of treatment and error exceeds an
after they considered accepted norm.
other factors (such as
potential consequences,
frequency of risk,
degree of emergency, and
complexity of the case).
The authors defined
``negligence'' as
failure to meet the
standard of care
reasonably expected of
an average physician
qualified to take care
of the patient in
question.
Study of 18,262 Not defined. Medication order
medication and error rate ranged
intravenous fluid between 2.6 to 8.5
orders given in a 3- per 1,000 orders.
month period at a Verbal medication
children's hospital orders had the
by West et al. (Ref. lowest error rate,
A-12). followed by computer-
entered orders (6.3
per 1,000) and
handwritten orders.
Study of 4,031 adult ``Adverse drug event'' 28% of adverse drug
admissions of 11 defined as an injury events are
medical and surgical resulting from medical preventable, and
units in 2 hospitals intervention related to there were 7.3
by Bates, Cullen et a drug. preventable adverse
al. (Ref. A-13). drug events per
every 100
admissions.
Review of 10,070 ``Medication error'' 5.3%.
medication orders to defined as errors in the
identify medication process of ordering or
errors by Bates, delivering medication,
Boyle et al. (Ref. A- regardless of whether an
9). injury occurred or the
potential for injury was
present.
[[Page 12533]]
Matched case-control ``Adverse drug event'' 1% of all adverse
study of all patients defined as an event that drug events, but the
admitted to a is ``noxious and authors also state
hospital in a 3-year unintended and occurs at that almost 50% of
period by Classen et doses used in humans for all adverse drug
al. (Ref. A-6). prophylaxis, diagnosis, events are
therapy, or modification potentially
of physiologic preventable.
functions'' but excludes
therapeutic failures,
poisonings, and
intentional overdoses.
Review of 10,778 ``Medication errors'' 5.7%, with adult
medication orders at defined as errors in patients cared for
2 urban teaching drug ordering, in a pediatric
hospitals by Kaushal transcribing, setting experiencing
et al. (Ref. A-3). dispensing, the most medication
administering, or errors.
monitoring.
Prospective cohort ``Medication error'' 19%, or nearly 2
study in 36 defined as a dose errors every day for
institutions by administered differently a typical patient
Barker et al. (Ref. A- than as ordered on the receiving 10 doses
10). patient's medical per day, or, for a
records. facility with 300
patients, almost 40
potential adverse
drug events in a
facility. The
percentage of
potentially harmful
errors was 7% or
more than 40 per day
per 300 inpatients.
Examination of all ``Medication errors are Medication error rate
U.S. death ``accidental poisonings rose from 1 out of
certificates between by drugs, medicaments, every 439 outpatient
1983 and 1993 by and biologicals'' and deaths and 1 out of
Phillips et al. (Ref. have resulted from every 1, 622
A-14). ``acknowledged errors, inpatient deaths in
by patients or medical 1983 to 1 out of
personnel. every 131 outpatient
deaths and 1 out of
every 854 inpatient
deaths in 1993. The
authors suggest the
increase may be due
to an increasing
willingness to
attribute error
deaths that were
previously ascribed
to natural causes.
------------------------------------------------------------------------
III. References in the Appendix
The following references have been placed on display in the Dockets
Management Branch (see ADDRESSES) and may be seen by interested persons
between 9 am. and 4 p.m., Monday through Friday.
A-1. Folli, H. L., R. L. Poole, W. E. Benitz, et al.,
``Medication Error Prevention by Clinical Pharmacists in Two
Children's Hospitals,'' Pediatrics, 79:718-722, 1987.
A-2. Leape, L. L. et al., ``The Nature of Adverse Events in
Hospitalized Patients,'' New England Journal of Medicine, 324:377-
384, 1991.
A-3. Kaushal, R. et al., ``Medication Errors and Adverse Drug
Events in Pediatric Inpatients,'' Journal of the American Medical
Association 285:2114-2120, 2001.
A-4. Lesar, T. S. et al., ``Medication Prescribing Errors in a
Teaching Hospital,'' Journal of the American Medical Association
263:2329-2334, 1990.
A-5. McCarthy, A. M., M. W. Kelly, and D. Reed, ``Medication
Administration Practices of School Nurses,'' Journal of School
Health, 70:371-376, 2000.
A-6. Classen, D.C. et al., ``Adverse Drug Events in Hospitalized
Patients,'' Journal of the American Medical Association, 277:301-
306, 1997.
A-7. Thur, M. P., ``Medication Errors in a Nurse-Controlled
Parenteral Admixture Program,'' Journal of Hospital Pharmacy,
29:298-304, 1972.
A-8. Tisdale, J. E., ``Justifying a Pediatric Critical-Care
Satellite Pharmacy by Medication-Error Reporting,'' American Journal
of Hospital Pharmacy, 43:368-371, 1986.
A-9. Bates, D.W., D. L. Boyle, M. B. Vander Vliet, et al.,
``Relationship Between Medication Errors and Adverse Drug Events,''
Journal of General Internal Medicine, 10:199-205, 1995.
A-10. Barker, K. N. et al., ``Medication Errors Observed in 36
Health Care Facilities,'' Archives of Internal Medicine, 162:1897-
1903, 2002.
A-11. Porter, J., and H. Jick, ``Drug-Related Deaths Among
Medical Inpatients,'' Journal of the American Medical Association,
237:879-881, 1977.
A-12. West, D. W., S. Levine, G. Magram, et al., ``Pediatric
Medication Order Error Rates Related to the Mode of Order
Transmission,'' Archives of Pediatric and Adolescent Medicine,
148:1322-1326, 1994.
A-13. Bates, D. W., D. J. Cullen, N. Laird, et al., ``Incidence
of Adverse Drug Events and Potential Adverse Drug Events,'' Journal
of the American Medical Association 274:29-34, 1995.
A-14. Phillips, D. P., N. Christenfeld, and L. M. Glynn,
``Increase in US Medication-Error Deaths Between 1983 and 1993,''
Lancet, 351: 643-644, 1998.
List of Subjects
21 CFR Part 201
Drugs, Labeling, Reporting and recordkeeping requirements.
21 CFR Part 606
Blood, Labeling, Laboratories, Reporting and recordkeeping
requirements.
21 CFR Part 610
Biologics, Labeling, Reporting and recordkeeping requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, it is
proposed that parts 201, 606, and 610 be amended as follows:
PART 201--LABELING
1. The authority citation for 21 CFR Part 201 continues to read as
follows:
Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 358, 360,
360b, 360gg-360ss, 371, 374, 379e; 42 U.S.C. 216, 241, 262, 264.
2. Section 201.25 is added to read as follows:
[[Page 12534]]
Sec. 201.25 Bar code label requirements.
(a) Who is subject to these bar code requirements? Manufacturers,
repackers, relabelers, and private label distributors of a human
prescription drug product or an OTC drug product that is regulated
under the Federal Food, Drug, and Cosmetic Act or the Public Health
Service Act are subject to the bar code requirements in this section
unless they are exempt from the registration and drug listing
requirements in section 510 of the act.
(b) What drugs are subject to these bar code requirements? The
following drug products are subject to the bar code label requirements:
Prescription drug products (excluding samples), biological products,
and over-the-counter drug products that are dispensed under an order
and are commonly used in hospitals. For purposes of this section, an
over-the-counter drug product is ``commonly used in hospitals'' if it
is packaged for institutional use, labeled for institutional use, or
marketed, promoted, or sold to hospitals.
(c) What does the bar code look like, and where does the bar code
go?
(1) Each drug product described in paragraph (b) in this section
must have a bar code that contains, at a minimum, the appropriate
National Drug Code (NDC) number in a linear bar code that meets Uniform
Code Council (UCC/EAN) standards. Additionally, the bar code must:
(i) Be surrounded by sufficient blank space so that the bar code
can be scanned correctly; and
(ii) Remain intact under normal conditions of use.
(2) The bar code must appear on the drug's label as defined by
section 201(k) of the act.
PART 606--CURRENT GOOD MANUFACTURING PRACTICE FOR BLOOD AND BLOOD
COMPONENTS
3. The authority citation for part 606 continues to read as
follows:
Authority: 21 U.S.C. 321, 331, 351, 352, 355, 360, 360j, 371,
374; 42 U.S.C. 216, 262, 263a, 264.
4. Section 606.121 is amended by revising paragraph (c)(13) to read
as follows:
Sec. 606.121 Container label.
* * * * *
(c) * * *
(13) The container label must bear encoded information that is
machine-readable and approved for use by the Director, Center for
Biologics Evaluation and Research.
(i) Who is subject to this machine-readable requirement? All blood
establishments that manufacture, process, repackage, or relabel blood
or blood components intended for transfusion and regulated under the
Federal Food, Drug, and Cosmetic Act or the Public Health Service Act.
(ii) What blood products are subject to this machine-readable
requirement? All blood and blood components intended for transfusion
are subject to the machine-readable information label requirement in
this section.
(iii) What information must be machine-readable? Each label must
have machine-readable information that contains, at a minimum:
(A) A unique facility identifier,
(B) Lot number relating to the donor,
(C) Product code, and
(D) ABO and Rh of the donor.
(iv) How must the machine-readable information appear? The machine-
readable information must:
(A) Be unique to the blood or blood component;
(B) Be surrounded by sufficient blank space so that the machine-
readable information can be scanned correctly; and
(C) Remain intact under normal conditions of use.
(v) Where does the machine-readable information go? The machine-
readable information must appear on the label of any blood or blood
component which is or can be transfused to a patient or from which the
blood or blood component can be taken and transfused to a patient.
* * * * *
PART 610--GENERAL BIOLOGICAL PRODUCTS STANDARDS
5. The authority citation for part 610 continues to read as
follows:
Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 360, 360c,
360d, 360h, 360i, 371, 372, 374, 381; 42 U.S.C. 216, 262, 263, 263a,
264.
6. Section 610.67 is added to read as follows:
Sec. 610.67 Bar code label requirements.
Unless it is regulated as a device, a biological product must
comply with the bar code requirements at Sec. 201.25 of this chapter.
Dated: January 24, 2003.
Mark B. McClellan,
Commissioner of Food and Drugs.
Dated: February 6, 2003.
Tommy G. Thompson,
Secretary of Health and Human Services.
[FR Doc. 03-5205 Filed 3-13-03; 8:45 am]
BILLING CODE 4160-01-S