For decades the healthcare industry has grappled with this issue, particularly on the medical device and consumables side. The pharmaceutical industry finally relented and established the National Drug Code (NDC) system, which is widely accepted.

But on the medical device side, resistance runs deep, despite all the rhetoric of support. Providers want it to happen because it will help them manage their data and supply chains more efficiently – but they don’t want to pay much, if anything, for it. Distributors want it for similar reasons, but are more willing to contribute financially. The logjam largely rests with the manufacturers, who not only fear that they’ll have to foot the bill for it so that others may benefit, but also that their products will become more easily compared to others. For them, it’s a competitive issue where the slightest cosmetic change could be spun as a competitive edge over the next company’s product.

That’s, in part, why the Common Category Database (CCD) failed in the early 1990s, why healthcare organizations wrangle over the smoldering Universal Product Number (UPN) and Efficient Healthcare Consumer Response (EHCR) initiatives that dominated the 1990s as successors to the CCD.

The common thread interlacing all of these efforts was that they were voluntary measures with no regulatory involvement, save for government facilities adopting and implementing the measures for their own facilities. CCD, UPN and EHCR leaders warned that if the healthcare industry didn’t do something then the government, typically the Food and Drug Administration, would step in.

If healthcare organizations didn’t take those "Chicken Little" warnings seriously back then, they’d better do it now. With the electronic capabilities in place now, as well as concerns over patient safety and process quality, the FDA has jumped squarely into the fray with a fact-finding mission on its proposed Universal Device Identification (UDI) initiative. As the latest in a series of efforts to make medical device manufacturers to play ball, this one may bear the most teeth. It’s largely believed that if no compromise is reached between the industry and the government then it will be mandated in some form. The FDA’s underlying message seems clear: Procrastination no longer is an excuse for policy.

As a result, Healthcare Purchasing News Senior Editor Rick Dana Barlow spoke with Richard Perrin, president of Annapolis, MD-based supply chain process improvement and software company AdvanTech Inc. Perrin, who has served as materials management director at one of the nation’s leading hospitals, also is a key player in the Healthcare Information Management Systems Society’s Special Interest Group on Supply Chain Management. Perrin shared his insights and thoughts on the UDI’s progression and it’s impact on the healthcare industry.

PERRIN: The FDA’s Universal Device Identification (UDI) initiative is part of a major initiative for enhanced patient safety more than a legislative initiative. More than anything else, the issues that are going to put UDI on the radar screen are the issues related to product recalls, the Institute of Medicine’s reports on patient safety, and the resulting liabilities for providers and manufacturers.

Certainly Nancy Pelosi and the Democrats’ agenda includes making healthcare more affordable but implementation of standards such as the UDI will move slowly. UDI as a means of medical device item identification and serialization really focuses on quality control issues and patient safety. The costs associated with the establishment of UDIs will cause some cost increases in the short run for manufacturers, distributors and providers, but the use of the technology will save money from better quality of care, and enhanced capabilities for product recalls.

The use of a Universal Product Identifier will force the industry to move towards standards for product items. The question will be whether the FDA follows a mandate for the use of the UDIs or relies on voluntary measures. Many manufacturers prefer the voluntary approach but this could take much longer to accomplish the benefits of establishing unambiguous identification standards for items including the requirements for serialization. The real tie is to link the issues of patient safety and device performance to the operational systems and solutions for an expanded regulatory environment as devices become increasingly more complex. An obvious outcome from UDI use with serialization using embedded RFID chips will be to reduce and minimize the proliferation of counterfeit products.

Implementation of UDI standards will facilitate reporting, tracking and analysis of patient safety related events. While much of the benefits may focus on public health, there are also significant potential impacts on providers as the use of the standards will span more efficient information standards but the initial requirements will be for significant investment in scanning systems, training and implementation support.

The major difference for the UDI is that the FDA is now seriously looking at its use as a means of improved device recall and enhanced patient safety. At the meeting recently sponsored by the FDA to discuss the use of UDIs, many of the meeting participants – while they were enthusiastic about potential benefits from use of UDIs – indicated the UDI standards would have to be mandated to accomplish the potential benefits. As noted, years have passed while the healthcare industry has pursued voluntary standards such as the UPN and the benefits touted in the EHCR study. If the FDA mandates the use of UDIs, it will be done with specific requirements for tracking items/devices, and reporting patient safety issues. These requirements will be developed in collaboration with industry representatives in the same manner that National Drug Codes were initially developed to provide for safe medication manufacturing and distribution practices.

Timing is part of the issue here, but more importantly, the continued escalation of healthcare costs and increasing complexity of medical devices are certainly contributing factors. Also, the reports on patient safety, quality of care and the issues related to product recalls as well as the continued evolution of information systems all contribute. Counterfeiting of drugs was just not as prevalent 10 years ago, and we did not have complex IV pumps, drug eluting stents or the increasing array of orthopedic implants we see today. There is also the ability of government agencies and commercial organizations to track items through the distribution chain that just did not exist 20 or even 10 years ago. Twenty years ago you didn’t have the capability of instant gratification like we have today with Internet linkages. Using the U.S. Postal Service you had to wait until the package was delivered and the card returned; today you enter the tracking information on the shipping site and you can trace the items progress as it moves across the country. While the CCD and subsequently, the UPN, were envisioned as capabilities that would improve trading partner activities, the systems were not where we are today, and thus, the CCD and UPN just weren’t the primary focus. We’re there now. The Common Category Database truly was a concept that was ahead of its time.

At the meeting recently held, the participants were divided on the issues and achieving voluntary standards will take a long time. It is not likely that the FDA will find this acceptable and the democratic congress may choose to pursue UDI regulations as part of an overall approach to supporting patient safety initiatives. At the recent meeting it was noted that selected high-risk patient care devices, e.g., pacemakers, stents, etc., are already subject to regulatory tracking. Other factors to consider are the continued expansion of eCommerce, global trade, integrated supply chain transaction processing, benchmarking and local/regional reports of quality of healthcare outcomes by different providers. All of these factors will drive the industry towards increased capabilities to track use of different items and the use of UDIs will be one of the supporting mechanisms. Unfortunately, there is tremendous resistance by some manufacturers to moving forward with the UDI as a mandatory requirement. Certain organizations just don’t want to do it. They’ll drag their feet as long as they can to postpone, if not prevent, this from happening, but it is going to happen. It’s like a freight train going down the track, and you’re not going to stop it. While some organizations are resisting it, others are embracing it and already moving toward it by assigning their own numbers to products to facilitate their customers’ ability to track usage and facilitate recalls. Also, other organizations are developing services based on their ability to populate large databases that can rapidly cross-match products to ensure customers are using the best contracts for their needs.

The diversity of medical device manufactures makes this impossible. The current NDC format provides 11-digits to contain information on the manufacturer, the medication form and strength and packaging information. While the basic format could be adopted for a limited number of medical devices, there are so many manufactures with vast numbers of medical devices, packaging, that the NDC format is simply insufficient to meet the needs of the medical device manufacturers. In addition, the NDC was developed as a U.S.-centric capability and the shift for manufacturers in the medical device domain to a global industry means that the standards that are developed or adopted must meet global requirements.

As noted previously, the healthcare industry has had many years to establish and adopt voluntary standards. While all of the participants concur that there are benefits to the use of UDIs for tracking items, facilitating recalls, enhancing patient safety, it is unlikely that the standards will be achieved on a voluntary basis. Thus, as the FDA continues to move down the path towards expanded regulations, it will be of critical importance to have broad representation of industry participants collaborating on the standards to be adopted and implemented in much the same manner as the NDC’s and the expanded use of bar codes for tracking medications and medical supplies.

There are numerous organizations providing leadership to these initiatives. GHX with its continued growth in support of healthcare industry trading partner transactions will certainly continue to be one of the proponents of standards use. Professional organizations such as Healthcare Information Management Systems Society, the National Alliance of Health Information Technology and the Coalition for Healthcare eStandards have all been pursuing the development of a product data utility and broader use of standards representing their membership’s needs. In addition, GS1 HUG is a growing presence and is committed to leading the healthcare industry both in the US and globally in developing and using standards designed to facilitate device identification and enhance patient safety and operational efficiency.

It will most likely take mandatory standards for the industry to move forward in a reasonable period of time. As devices and healthcare becomes more complex and costs continue to rise, industry will move towards self regulations but this is not likely to meet the overarching concerns of efficient and timely product recalls in support of patient safety.

The process that the FDA has previously followed includes provisions for initially industry collaboration on the development of the standards or regulations followed by public comment, revisions and publishing of final regulations and standards. This is accompanied with industry input/guidance on the amount of time that will be required to implement the proposed or final regulations and standards. Of course, this will all take some time.