[Federal Register Volume 69, Number 38 (Thursday, February 26, 2004)]
[Rules and Regulations]
[Pages 9120-9171]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-4249]
[[Page 9119]]
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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, et al.
Bar Code Label Requirements for Human Drug Products and Biological
Products; Final Rule
Federal Register / Vol. 69, No. 38 / Thursday, February 26, 2004 /
Rules and Regulations
[[Page 9120]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 201, 606, and 610
[Docket No. 2002N-0204]
Bar Code Label Requirement for Human Drug Products and Biological
Products
AGENCY: Food and Drug Administration, HHS.
ACTION: Final rule.
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SUMMARY: The Food and Drug Administration (FDA) is issuing a new rule
to require certain human drug and biological product labels to have bar
codes. The bar code for human drug products and biological products
(other than blood, blood components, and devices regulated by the
Center for Biologics Evaluation and Research) must contain the National
Drug Code (NDC) number in a linear bar code. The rule will 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 rule also requires the use of machine-readable
information on blood and blood component container labels to help
reduce medication errors.
DATES: Effective Date: This rule is effective on April 26, 2004.
Compliance Dates: Drug products that receive approval on or after
the rule's effective date must comply with the bar code requirement
within 60 days after the drug's approval date. Drug products that
received approval before the final rule's effective date must comply
with the bar code requirement within 2 years after the final rule's
effective date. Specific information on how the rule will be
implemented can be found in section II.I of this document.
FOR FURTHER INFORMATION CONTACT: Philip L. Chao, Office of Policy and
Planning (HF-23), Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857, 301-827-0587.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Comments on the Proposed Rule and FDA's Responses
A. Who Is Subject to the Bar Code Requirement? (Sec. 201.25(a))
B. What Products Must Have a Bar Code? (Sec. 201.25(b))
1. Should Prescription Drug Samples Be Excluded From the Rule?
2. Which OTC Drug Products Must Have a Bar Code?
3. Must Vaccines Have a Bar Code?
4. What Other Types of Drugs Should Be Subject to a Bar Code
Requirement?
5. Should Medical Devices Be Excluded From the Rule?
C. What Must the Bar Code Contain? (Sec. 201.25(c)(1))
1. Should We Require the Bar Code to Contain the NDC Number?
2. Should the Bar Code Contain Lot Number and Expiration Date
Information?
3. Can Information Be Omitted from the Label to Accommodate the Bar
Code?
D. Does the Rule Require a Specific Type of Bar Code? (Sec.
201.25(c)(1))
1. Should the Rule Require Linear Bar Codes?
2. Should the Rule Impose Any Conditions on the Bar Code?
E. Where Does the Bar Code Go? (Sec. 201.25(c)(2))
F. Must Blood and Blood Components Bear ``Machine-Readable''
Information? (Sec. 606.121(c)(13))
G. Must Biological Products Have a Bar Code? (Sec. 610.67)
H. What Other Comments Did We Receive?
1. Comments Seeking More Action by FDA
2. Comments Relating to Bar Code Problems or Quality
3. Comments Regarding FDA's Future Involvement with Bar Codes
4. Miscellaneous Comments
I. How Will We Implement the Rule?
III. Legal Authority
IV. Environmental Impact
V. Paperwork Reduction Act of 1995
A. What Is the Estimated Information Collection Burden?
B. What Comments Did We Receive on Our Estimates?
VI. Federalism
VII. Analysis of Impacts
A. Introduction
B. Objective of the Rule
C. Estimate of Preventable Adverse Drug Events and Acute Hemolytic
Transfusion Reactions
D. The Final Rule
E. Description of Affected Sectors
1. Current Machine-Readable Technologies
2. Manufacturers and Packagers of Affected Products
3. Retail Outlets
4. Hospitals
5. Nursing Homes and Long-Term Care Facilities
6. FDA Oversight and Responsibilities
F. Regulatory Costs of the Final Rule
1. Introduction
2. Costs to Manufacturers and Packagers of Affected Products
3. Costs to Retailers and Distributors
4. Costs to Hospitals
5. Costs to the Food and Drug Administration
6. Total Regulatory Costs
G. Other Anticipated Expenditures
H. Reduction in Preventable Adverse Drug Events and Preventable
Acute Hemolytic Transfusion Reactions
I. Value of Avoided ADEs and AHTRs
1. Value of Avoided ADEs
2. Value of Avoided AHTRs
J. Aggregate Benefit of Avoiding ADEs and AHTRs
K. Cost Effectiveness of Bar Coding
L. Other Benefits of Bar Code Technology
M. Distributional Effects of Bar Code Technology
N. Comparison of Costs, Expenditures, and Benefits
O. Uncertainty and Sensitivity
1. Voluntary Share of Labeling Costs
2. Packaging Decisions
3. Implementation Period
4. Value of Mortality Associated with ADEs
5. Value per QALY
6. Boundary Analysis
7. Hospital Response Rates
8. Hospital Intercept Rates with Machine-Readable Technology
9. Productivity Losses in Hospital Wards
10. Investments by Hospital Size
P. Small Business Analysis and Discussion of Alternatives
1. Affected Sectors and Nature of Impacts
2. Alternatives
3. Outreach
4. What Comments Did We Receive on Our Economic Analysis?
Q. Conclusion
R. References
I. Introduction
In the Federal Register of March 14, 2003 (68 FR 12500), FDA (we)
published a proposed rule that would require certain human drug and
biological product labels to have a linear bar code (the March 2003
proposal). The proposal would require the bar code to contain the
drug's NDC number. For blood and blood components, the proposal would
require the use of machine-readable information on the container label.
Our intent was to help reduce the number of medication errors in
hospitals and 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
[[Page 9121]]
time. For blood and blood components, the machine-readable information
would perform a similar function and help prevent errors such as
transfusion errors.
The preamble to the March 2003 proposal described the events that
led us to issue the proposal (see 68 FR 12500 through 12503), and we
refer readers to that preamble if they wish to obtain details on the
events, recommendations, meetings, and literature that shaped the
proposed rule. In brief, medication errors are a serious public health
problem, and putting bar codes on drug products is expected to
significantly reduce medication errors. Medication errors can occur at
several points from the time the physician prescribes the drug 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. Although most medication errors do
not result in harm to patients, medication errors can result and have
resulted in serious injury or death. Medication errors also represent a
significant economic cost to the United States; one article published
in 2001 (Ref. 30) estimated the direct cost to be $177.4 billion, while
another (Ref. 31) estimated the cost of preventable adverse drug events
in hospitalized patients to be $5,857 for each adverse drug event, with
the estimated annual costs for preventable adverse drug events for a
700-bed hospital to be $2.8 million.
Bar codes can help reduce or detect potential medication errors by
enabling 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. The bar codes would be part of a
system, along with bar code scanners and computerized databases, where:
[sbull] A patient would have his or her drug regimen information
entered into a computerized database.
[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 to read a bar coded wristband 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 were 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 can also complement other efforts to reduce medication
errors, such as computer physician order entry (CPOE) systems (where a
physician enters orders into a computer instead of writing them on
paper, and the order can be checked against the patient's records for
possible drug interactions, overdoses, and patient allergies) and
pharmacy-based computer systems that use a bar-coded NDC number to
verify that a consumer's prescription is being dispensed with the
correct drug.
We (FDA) held a public meeting on July 26, 2002, to discuss a
possible rule to require bar codes on human drug products, blood, and
blood components (see 67 FR 41360, June 18, 2002). Nearly 400
individuals attended that public meeting, and many submitted comments
to us. We then published the March 2003 proposal. The March 2003
proposal would create a new Sec. 201.25 (21 CFR 201.25) entitled ``Bar
Code Label Requirements.'' (For biological products other than blood
and blood components, the bar code requirement would exist through a
cross-reference at a new Sec. 610.67 (21 CFR 610.67.) The proposal
also would amend the preexisting, voluntary provision regarding
``machine-readable'' symbols on blood and blood component container
labels at Sec. 606.121(c)(13) (21 CFR 606.121(c)(13) to require the
use of machine-readable information.
We received approximately 190 comments on the proposal, and almost
all comments supported the rule in whole or in part. For example, one
comment said that ``FDA is to be highly commended for both the proposed
regulation and the process leading to it'' while another said that the
rule was an ``excellent step toward reducing medication errors.'' Other
comments reported favorably on their own experiences with bar codes on
drugs. One comment from a hospital said that the hospital had recently
begun bedside verification of medications, using bar codes, and that
the bar codes were a valuable tool for reducing medication errors. A
comment from a health professional noted that his health care system
used bar codes to dispense patient medications and those using robots
to dispense medications reduced the manual error dispensing rate by 50
percent.
A few comments, however, were skeptical about the value of bar
coding drugs. For example, one comment described problems associated
with installing new technology in old buildings. The comment also
feared that our rule would cause hospitals to lose their accreditation
if they did not adopt bar coding technology. Another comment expressed
concern about the impact on nurses' workloads. The comment said bar
codes on drugs could cause nurses to spend more time administering
medications because of scanning errors or problems with the bar code,
but concluded that ``the ultimate outcomes will be worth the investment
for the manufacturers, the providers, and ultimately the patients.''
After reviewing the comments, FDA made several changes to the rule.
The principal changes between the proposed and final rule are as
follows:
[[Page 9122]]
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Proposed Rule Final Rule
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Would apply to prescription drugs (except Applies to most prescription
for samples) and to over-the-counter drugs (except for samples,
drugs commonly used in hospitals and allergenic extracts,
dispensed pursuant to an order intrauterine contraceptive
devices that are regulated
as drugs, medical gases,
radiopharmaceuticals, low-
density polyethylene form
fill and seal containers,
and prescription drugs sold
directly to patients) and
to over-the-counter drugs
commonly used in hospitals
and dispensed under an
order. We explain the
reasons for exempting
certain prescription drugs
in section II.B.4 of this
document.
-------------------------------------------
Did not contain a general exemption Contains a limited, general
provision exemption provision. We
explain the reasons for
creating a general
exemption provision in
section II.B.4.c of this
document.
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Would require a linear bar code that meets Requires a linear bar code
Uniform Code Council standards that meets Uniform Code
Council standards or Health
Industry Business
Communications Council
standards. We explain the
reasons for this change at
section II.D.1 of this
document.
-------------------------------------------
Would create a 3-year implementation Establishes different
period compliance dates depending
on when a drug was
approved. In general, the
rule is effective 60 days
after date of publication
in the Federal Register. If
a drug receives approval on
or after the effective
date, it must comply with
the bar code requirement
within 60 days of the
drug's approval date. If
the drug received approval
before the rule's effective
date, it must comply with
the bar code requirement
within 2 years of the final
rule's effective date. For
blood and blood components,
a 2 year compliance date
exists. We explain the
implementation of this rule
at section II.I of this
document.
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We describe and respond to the comments in section II of this
document. To make it easier to identify comments and our responses, the
word ``Comment,'' in parentheses, will appear before the comment's
description, and the word ``Response,'' in parentheses, will appear
before our response. We have also numbered each comment to help
distinguish between different comments. The number assigned to each
comment is purely for organizational purposes and does not signify the
comment's value or importance or the order in which it was received.
II. Comments on the Proposed Rule and FDA's Responses
A. Who Is Subject to the Bar Code Requirement? (Sec. 201.25(a))
Under proposed Sec. 201.25(a), manufacturers, repackers,
relabelers, and private label distributors of human prescription drug
products and over-the-counter (OTC) drug products regulated under the
Federal Food, Drug, and Cosmetic Act (the act) or the Public Health
Service Act (PHS 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).
In the preamble to the proposed rule (68 FR 12500 at 12503), we
acknowledged that some hospitals place bar codes on drugs themselves
and have reduced their medication error rates significantly, but we
stated that requiring manufacturers, repackers, relabelers, and private
label distributors to bar code their own products should be more
efficient and result in better quality bar codes because manufacturers,
repackers, relabelers, and private label distributors generally have
sophisticated manufacturing processes, labeling machinery, and quality
control systems that hospitals cannot afford. We added that bar coding
by third parties (such as hospitals) could increase the possibility of
a label error through the attachment of the wrong bar code and could
lead to inconsistent bar code quality; in fact, one organization that
submitted a comment at our public meeting on July 26, 2002, estimated
the error rate in hospital labeling to be approximately 17 percent
nationwide.
We also stated that requiring manufacturers, repackers, relabelers,
and private label distributors to bar code their own products and to
use the same bar coding standard would result in a more uniform bar
coding system that could be used regardless of a patient's or
hospital's location in the United States, and that this uniformity
would 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.
(Comment 1) One comment stated that hospital pharmacies should be
subject to the bar code requirements. The comment explained that
hospitals frequently compound drugs for pediatric use and that omitting
such compounded drugs from the rule would leave ``infants and children
without the protections that bar codes are intended to provide.''
Another comment argued that we should exempt nuclear pharmacies
from the rule. The comment claimed that a bar code requirement would
subject hospital personnel and employees to additional radiation
(because they would have to scan the bar codes).
(Response) Section 510(g)(1) of the act states that pharmacies
which maintain establishments in conformance with any applicable
local laws regulating the practice of pharmacy and medicine and
which are regularly engaged in dispensing prescription drugs or
devices, upon prescriptions of practitioners licensed to administer
such drugs or devices to patients under the care of practitioners in
the course of their professional practice, and which do not
manufacture, prepare, propagate, compound, or process drugs or
devices for sale other than in the regular course of their business
of dispensing or selling drugs or devices at retail
do not have to register their establishments or list their products
with FDA. Thus, if a pharmacy is exempt, under section 510(g)(1) of the
act, from our establishment registration and drug listing requirements,
the pharmacy is not subject to the bar code requirements.
We also note that drugs compounded at pharmacies generally would
not have NDC numbers. NDC numbers are assigned to drugs that are listed
under section 510(j) of the act, but, as we
[[Page 9123]]
explained earlier, section 510(g)(1) of the act would exempt a pharmacy
from the registration and listing requirements. Consequently, a
compounded drug would not be listed, would not be assigned an NDC
number, and would therefore lack the information required to be in the
bar code.
Regarding the comment claiming that a bar code requirement would
lead to greater radiation exposure for nuclear pharmacy employees, the
comment did not provide any evidence or data to show that using a bar
code scanner would constitute a significant or even appreciable risk or
that bar code scanners would undermine or compromise any existing
measures taken to protect such employees from radiation exposure.
Nevertheless, as we explain in our response to comment 24 in section
II.B.4.b. of this document, we have decided to exempt
radiopharmaceuticals from the bar code requirement.
(Comment 2) One comment said we should exempt hospitals,
institutional providers, and large clinics from the rule. The comment
interpreted the rule's reference to repackers and relabelers as
covering hospitals and other providers and said that hospitals and
other providers would still have to repack and relabel drugs (such as
intravenous solutions and mixes). The comment declared it would be
``unrealistic'' to expect hospitals and other providers to obtain NDC
labeler codes and ``participate in the NDC system.''
In contrast, several comments said we should extend the rule to
hospitals or expressed disappointment that the rule did not require
hospitals to use bar codes. For example, one comment said the Federal
Government should establish requirements so that hospitals would have
to adopt technologies to use the bar codes. Another comment said that
we should ``encourage,'' but not require, hospitals to use bar code
technology. The comment said that most hospitals would find it
difficult to adopt bar code technology due to the age of their
buildings and their construction.
Another comment asked us to clarify that relabeled, repackaged, or
privately labeled drugs must have their own NDC numbers. The comment
said that hospitals and pharmacies must not use the same NDC number
that the drug's manufacturer used.
(Response) Some comments appear to have misinterpreted the rule.
Repackers, relabelers, and private label distributors that are exempt
from the establishment registration and drug listing requirements in
section 510 of the act (see 68 FR 12500 at 12503; see also proposed
Sec. 201.25(a)) are not subject to the bar code requirements.
Hospitals, clinics, and public health agencies that ``maintain
establishments in conformance with any applicable local laws regulating
the practices of pharmacy or medicine and that regularly engage in
dispensing prescription drugs * * * upon prescription of practitioners
licensed by law to administer these drugs to patients under their
professional care'' are exempt from the establishment registration
requirements (see Sec. 207.10(b) (21 CFR 207.10(b)); as a result, such
hospitals, clinics, and public health agencies are also exempt from the
bar code requirements.
The rule also does not require hospitals to use or adopt bar code
technology. Hospitals are free to decide whether to take advantage of
the bar codes on human drug and biological products. Our legal
authority, in this case, extends to the products and not to hospitals.
Nevertheless, we advise hospitals and other potential bar code users
that we are aware of electromagnetic interference (EMI) problems
associated with the use of wireless technology products, such as cell
phones, local area networks (LANs), and personal digital assistants
(PDAs), in the vicinity of electrically-powered medical devices. EMI
problems are a particular concern in health care facilities as well as
home care settings. We caution that wireless bar code scanning
technologies may present similar concerns about their electromagnetic
compatibility (EMC) with other hospital equipment. We encourage
hospitals and other potential bar code users to consider EMC with
medical devices when developing their policies and implementing a bar
code scanning system. Additional information about EMC with medical
devices is available at http://www.fda.gov/cdrh/emc.
We recommend that interested parties gather information and conduct
research about wireless bar code scanners (or other scanning or reading
equipment) and their EMI potential on other medical devices. We also
encourage voluntary standards development organizations, such as the
Association for the Advancement of Medical Instrumentation, the Joint
Commission on Accreditation of Healthcare Organizations (JCAHO), the
American National Standards Institute (ANSI), and the International
Electrotechnical Commission (IEC) to work with us toward the goal of
coordinated policies, research, and standards development to ensure a
base level of EMC in all health care facilities. This would include
recommendations for safely deploying wireless technology in hospitals
and health care facilities.
As for entities that repack or relabel drugs, if a repacker,
relabeler, or private label distributor is subject to the establishment
registration requirement at section 510 of the act, then that person
would also be subject to the bar code requirements. We would expect
that repacker, relabeler, or private label distributor to use its own
NDC numbers on its products. In other words, a manufacturer, repacker,
relabeler, or private label distributor must not use an NDC number that
is not assigned to it. Use of another establishment's NDC number in the
bar code would cause the product to be misbranded under section 502(a)
of the act (21 U.S.C. 352(a)) because the drug's label would be
misleading.
B. What Products Must Have a Bar Code? (Sec. 201.25(b))
Proposed Sec. 201.25(b) would require bar codes on the labels of:
[sbull] All human prescription drug products, excluding samples;
[sbull] Biological products; and
[sbull] OTC drug products that are commonly used in hospitals and
dispensed pursuant to an order.
We proposed to exclude prescription drug samples because most
samples are given to patients at physicians' offices, and we did 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 invited
comment as to whether we should require bar codes on prescription drug
samples and sought cost and benefit data associated with placing bar
codes on such samples (see 68 FR 12500 at 12505 and 12529).
As for OTC drug products, the phrase ``commonly used in hospitals''
reflected our primary focus of helping to reduce the number of
medication errors occurring in hospitals. We added the phrase,
``dispensed pursuant to an order,'' because we knew that some products
that are regulated as OTC drug products, such as mouth rinses and
toothpastes, are not likely to contribute to medication errors, and are
not dispensed in hospitals pursuant to a physician's or health care
professional's order. Thus, the phrase, ``dispensed pursuant to an
order,'' was designed to capture those OTC drug products that are
likely to contribute to medication errors. The preamble to the proposed
rule invited comment as to whether there was a better way to describe
the types of OTC drug products that should have a bar code (see 68 FR
12500 at 12506 and 12529).
[[Page 9124]]
The preamble to the March 2003 proposal also invited comment on
whether any specific product or class of products should be exempt from
the rule and the reasons for an exemption (see 68 FR 12500 at 12511
through 12512 and 12529).
1. Should Prescription Drug Samples Be Excluded From the Rule?
(Comment 3) Several comments said we should require bar codes on
prescription drug samples. One comment stated that bar codes on samples
would make it easier to monitor inventory or distribution to patients.
Another comment said that prescription drug samples are ``commonly
dispensed in numerous hospital settings,'' such as emergency
departments, and that ``the very nature of treatment and medication
administration (in an emergency department) presents unique challenges
for which bar coding would prove instrumental.'' The comment also
stated that JCAHO requires institutions to have policies and procedures
in place to control drug samples and requires quick retrieval of
recalled drugs, so hospitals must keep detailed records, ``often
including lot and expiration date, of drug samples dispensed to
patients.'' Another comment suggested that, rather than require bar
codes on all prescription drug sample labels, we could simply require
bar codes on the outer package because patients receive the entire
package rather than a portion of a drug sample.
Other comments also wanted bar codes on prescription drug samples
for reasons unrelated to medication errors. For example, one comment
said that bar codes on prescription drug samples would reduce the
amount of time spent tracking samples. Another comment said that bar
codes could help pharmacists identify samples that patients present to
them; the comment said that patients sometimes bring prescription drug
samples to pharmacists because they wish to continue receiving the same
drug. A third comment said clinicians might be confused if they had to
follow one procedure for bar coded prescription drugs and a different
procedure for nonbar coded prescription drug samples.
Conversely, several comments agreed with our decision to exclude
prescription drug samples from the bar code requirement. The comments
said there would be no benefit to bar coding such products, although
one comment suggested that we conduct a study to see how prescription
drug samples are used in institutional settings and to determine
whether they should be the subject of a future rulemaking. Another
comment agreed that bar coding prescription drug samples would not
enhance patient safety, but said that one possible benefit would be
that manufacturers could monitor disbursement of prescription drug
samples.
Other comments suggested that bar codes on samples could be
voluntary or noted that bar codes can fit easily on prescription drug
samples because their packaging is often larger than unit-dose
packaging (so that it is technologically feasible to put bar codes on
prescription drug packaging) and that the Uniform Code Council (UCC)
system requires bar codes on promotional products such as samples.
(Response) We decline to require bar codes on prescription drug
samples. The comments did not offer any data to contradict our position
that most prescription drug samples are dispensed by physicians in
their offices and that physicians and patients will not be inclined to
buy or use bar code scanners. We realize that bar codes could help with
inventory control and help monitor distribution of samples, but those
objectives have no bearing on medication errors or drug safety and are
outside the scope of this rule.
Although one comment did claim that prescription drug samples are
commonly dispensed in hospitals, particularly in emergency departments,
we could not determine whether the comment meant to say that hospitals
administer samples to patients or whether they simply provide samples
to patients to take home. We also could not determine whether such
practices are common in hospitals, but note that, under section 503(d)
of the act (21 U.S.C. 353(d), hospitals may distribute prescription
drug samples at the direction of a practitioner who is licensed to
prescribe such drugs and who received such samples. (However, sections
301(t) (21 U.S.C. 331(t)) and 503(c) of the act prohibit the sale and
purchase of drug samples.) If we assume that the comment pertained to
distribution of samples in hospitals, then we reiterate that the
physicians directing the distribution of the samples and the patients
receiving such samples will not be inclined to buy or use bar code
scanners. Consequently, requiring bar codes on prescription drug
samples would have little benefit insofar as medication errors are
concerned.
As for the possible use of bar codes in helping pharmacists
identify drugs presented by patients, we note that part 206 (21 CFR
part 206) requires imprinting on solid oral dosage forms. The code
imprint was designed to help identify solid oral dosage forms,
particularly in emergency situations, and to help consumers and health
care professionals identify drugs (see 58 FR 47958, September 13, 1993;
part 206). Thus, drug imprinting already exists to help emergency
departments, and pharmacists can also use the imprint codes to help
identify samples presented to them by patients.
As for the voluntary use of bar codes on prescription drug samples,
we do not object to such use.
2. Which OTC Drug Products Must Have a Bar Code?
(Comment 4) Several comments focused on OTC drug products. One
comment agreed that only OTC drug products commonly used in hospitals
and dispensed pursuant to an order should be required to have bar
codes. In contrast, an OTC drug firm stated that the rule's description
of OTC drug products might be clear to hospitals, but was unclear to
OTC drug manufacturers. The comment said that, instead of describing
the OTC drug products that must have a bar code, we should list OTC
drug products, categories of OTC drug products, and/or ingredients that
do not require bar codes. The comment said such a list would give
``clear direction'' as to those OTC drug products that are subject to a
bar code requirement.
Two other comments expressed similar views on listing OTC drugs.
One comment said we should list categories of OTC drug products that
would not have to have a bar code, whereas another comment said we
should list the types of OTC drugs that would or should be subject to a
bar code requirement.
(Response) We decline to revise the rule to describe the OTC drug
products that would be subject to Sec. Sec. 201.25 and 610.67 in terms
of specific drugs, categories, or ingredients. The comments' suggestion
that we list OTC drug products, categories, and/or ingredients would
effectively force us to engage in case-by-case analyses to decide
whether a particular OTC drug, category, and/or ingredient should or
should not have a bar code and force us to engage in repeated
rulemakings each time we wanted to modify the list. Additionally,
parties that objected to listing a particular OTC drug product or class
could attempt to challenge our decisions, creating an added burden on
our resources. The result would be a cumbersome, time-consuming,
resource-intensive, and inefficient administrative process that would
detract from, rather than contribute to, efforts to improve patient
safety. The original proposal's
[[Page 9125]]
formulation makes the distinction we are trying to draw and places the
burden on manufacturers, repackers, relabelers, and private label
distributors of OTC drug products to determine whether their products
are commonly used in hospitals and dispensed under an order.
We have, however, re-worded Sec. 201.25(a) to refer to ``over-the-
counter (OTC) drug products'' and to use the shorter term of ``OTC drug
products'' in the remainder of Sec. 201.25. This change corrects an
oversight in the proposed rule because it referred to ``OTC drug
products'' without explaining what ``OTC'' meant.
(Comment 5) Proposed Sec. 201.25(b) had explained that an OTC drug
is ``commonly used in hospitals'' if it is ``packaged for institutional
use, labeled for institutional use, or marketed, promoted, or sold to
hospitals.'' One comment stated that the rule's reference to OTC drug
products packaged and labeled for ``institutional'' use was confusing
because the rule also referred to ``hospitals.'' Thus, the comment said
we should clearly define the sites to which bar coded products must be
distributed and define ``hospital'' and ``institution.''
Two other comments suggested that we interpret ``commonly used in
hospitals'' as ``packaged for hospital use, labeled for hospital use,
or marketed, promoted, or sold to hospitals.'' Another comment said the
interpretation of the phrase, ``commonly used in hospitals,'' should
depend on a combination of two or more ``indicators,'' such as
``packaging designed for institutional use, package labeling for
institutional use, or marketing or promotion (including through sales
catalogues) to hospitals.'' The comment explained that our rule would
``inadvertently sweep a far larger range of OTC medicines into the
rule's coverage.'' It also asked us to clarify that an OTC drug
manufacturer would not be responsible for bar coding the drug if it was
``marketed, promoted, or sold to hospitals'' by someone else.
(Response) The proposed rule referred to ``institutional use''
because we knew that some OTC drug packages and labels state that the
drug is ``for institutional use'' or ``for institutional use only''
(see 68 FR 12500 at 12505). We did not intend to imply that the rule
would cover OTC drug products that were commonly used in
``institutions'' other than hospitals, and we have revised Sec.
201.25(b) to replace ``institutional use'' with ``hospital use.''
However, we also have added the parenthetical phrase, ``or uses similar
terms'' after ``labeled for hospital use'' to indicate that persons
subject to the rule should adopt a common sense interpretation of Sec.
201.25(b). For example, a manufacturer who labels an OTC drug ``for
institutional use only'' and sells that OTC drug to hospitals should
comply with the bar code requirement notwithstanding the fact that it
labeled the drug ``for institutional use only'' instead of ``for
hospital use only.'' In other words, we do not consider the OTC drug
label's use of the word ``institution'' or its avoidance of the word
``hospital'' as being the determining factor in whether an OTC drug
must comply with the bar code requirement.
As for defining what constitutes a ``hospital,'' the preamble to
the proposed rule interpreted the word ``hospital'' as ``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'' (see 68 FR
12500 at 12517, footnote 4 of table 2). We consider this interpretation
to be sufficient for the final rule, but decline to codify this
interpretation in the final rule. A codified interpretation of
``hospital'' would invite arguments as to whether a particular facility
purchasing OTC drug products was or was not a ``hospital,'' whether the
majority of purchasing institutions were or were not ``hospitals,''
and, as a result, would likely lead to further arguments about whether
a particular OTC drug product sold to such facilities was subject to
the bar code requirements. Engaging in such arguments would neither
enhance patient safety, nor would it be an efficient use of our
resources.
We also decline to interpret ``commonly used in hospitals'' as
requiring two or more ``indicators.'' If we were to make the change as
suggested by the comment, fewer OTC drug products would be subject to
the bar code rule despite their use in hospitals and despite their
potential for causing medication errors. For example, if we interpreted
the rule to apply only to those OTC drug manufacturers who directly
sold their products to hospitals, then an OTC drug manufacturer could
avoid the bar code requirement simply by selling the OTC drug products,
complete with labeling for ``hospital use,'' to wholesalers or
middlemen for resale to hospitals. Similarly, if we were to adopt the
comment's suggestion to change ``packaged for institutional use'' to
``packaging designed for institutional use,'' a firm could avoid the
bar code requirement by making no distinction between its packages for
retail sale and its packages for hospital use, because the package is
arguably not ``designed'' for institutional use.
(Comment 6) Two comments stated that the phrase, ``dispensed
pursuant to an order,'' is inappropriate because some institutions do
not have orders provided by physicians or because some institutions
allow nurses to request OTC drugs. Another comment suggested that we
refer to OTC drugs that are ``dispensed upon a prescription of a
practitioner licensed by law to administer a drug;'' the comment said
this language would be clearer and eliminate any confusion as to what
constitutes an ``order.''
Several comments suggested that we refer to ``non-prescription
drugs used therapeutically pursuant to a prescriber's order,'' although
one comment used the phrase ``pursuant to a rescuer's order.'' The
comments explained that the word ``therapeutically'' would exclude OTC
drugs such as toothpastes and mouth rinses. Another comment suggested
that the rule state that OTC drug products ``are excluded from the bar
coding requirements except for those OTC therapeutic drugs that are
packaged for institutional use or specifically marketed for use in an
institution for therapeutic purposes.''
(Response) The word ``order,'' in Sec. 201.25(b), is not confined
to any particular manner, document, or format for requesting a drug,
nor is it confined to any particular type of health care professional.
The phrase ``dispensed pursuant to an order'' should be interpreted as
applying to an OTC drug that is to be administered to a patient as
directed by a health care professional, regardless of whether he or she
is a physician, nurse, or other professional. Consequently, we decline
to revise the rule to refer to a ``prescription of a practitioner
licensed by law to administer a drug'' because those terms would be
more restrictive and would create more, rather than less, uncertainty
over the rule's applicability to OTC drug products. For example, the
word, ``prescription'' could be interpreted as requiring the
practitioner to write a prescription for the OTC drug product before it
could be administered to the patient. In contrast, an ``order'' could
be an instruction written on a patient's medical chart, and could even
be entered into the chart at the same time when the OTC drug is
administered. As another example, the phrase, ``practitioner licensed
by law to administer a drug'' could create uncertainty or disagreement
as to whether a person was a ``practitioner,'' whether he or she was
``licensed by
[[Page 9126]]
law,'' and whether that license included the ability to ``administer a
drug.''
Similarly, we decline to revise the rule to refer to ``non-
prescription drugs used therapeutically pursuant to a prescriber's
order.'' There is no apparent distinction between a ``non-prescription
drug'' and ``OTC drug product,'' and requiring such drugs to be used
``therapeutically'' could result in disagreements as to whether a
particular use was ``therapeutic.'' For example, a person might
interpret ``therapeutic'' as meaning that the OTC drug product must
have curative or healing properties and distinguish such drugs from
those whose purpose is prophylactic or intended to prevent disease.
Another person might distinguish between OTC drug products that provide
symptomatic relief and ``therapeutic'' OTC drug products by arguing
that providing symptomatic relief does not address the underlying cause
of a disease or condition and, therefore, is not ``therapeutic.'' We
can avoid such potential arguments by not referring to ``therapeutic''
use.
We did not understand the comment that referred to a ``rescuer's
order'' and did not believe the use of the word to be an appropriate
substitute for an ``order.''
(Comment 7) One comment suggested that the rule cover OTC drug
products that are intended to be dispensed intact and in the original
container as provided by the manufacturer, for use by inpatients. The
comment explained that this description would cover various OTC drug
products and also cover OTC drug products that are ``comfort
medications'' that nurses can request without a physician's order.
(Response) We decline to adopt the comment's suggestion. The
comment's suggested definition would encompass some OTC drug products,
such as mouth rinses and toothpastes, that are not likely to contribute
to medication errors but are nevertheless dispensed intact and in the
original container to inpatients.
(Comment 8) One comment asked us to exclude OTC drug samples from
the rule. The comment noted that we had excluded prescription drug
samples because prescription drug samples are usually dispensed in
physicians' offices and because we did not believe that physicians or
patients would be inclined to buy or use bar code scanners. The comment
claimed that the same rationale applied to OTC drug samples.
(Response) We decline to amend the rule as suggested by the comment
because an amendment is unnecessary. The rule requires bar codes only
for OTC drugs that are ``commonly used in hospitals'' and ``dispensed
pursuant to an order.'' OTC drug samples would fall outside this bar
code requirement because OTC drug samples are not ``commonly used in
hospitals'' and are not ``dispensed pursuant to an order.''
(Comment 9) One comment from an OTC drug manufacturer asked if the
rule applied to all packages of a specific OTC drug. The comment
explained that the firm uses a ``modified open stock catalogue'' that
includes all retail and some hospital-specific OTC drug products and
that hospitals can buy products from the catalogue. The comment asked
if the rule would require the firm to put bar codes on all OTC drug
products in the catalogue or whether the firm could put a bar code on
one or more OTC drug products and still offer OTC drug products without
bar codes in the same catalogue. The comment appeared to suggest that
hospitals could then decide which version (i.e., bar coded vs. nonbar
coded) to buy, and the OTC drug manufacturer would still be in
compliance with the rule.
(Response) We interpret the comment as meaning that an OTC drug
manufacturer may make two versions of the same OTC drug product. Both
versions would use the same drug (in the same dosage form and
strength); they would differ only with respect to the presence of a bar
code on the product labels. Under such a scenario, we agree that the
OTC drug manufacturer could, indeed, offer both the bar coded and
nonbar coded versions of the OTC drug product in the same catalogue for
hospital and retail sales, and we would consider the firm to be in
compliance with the rule.
However, if the OTC drug manufacturer had several different
versions of an OTC drug product that is commonly used in hospitals and
dispensed under an order, and the OTC drug manufacturer decided to put
the bar code only on one product, we might consider the OTC drug
manufacturer to be in violation of the rule. To illustrate, assume that
the OTC drug manufacturer makes three different dosages of a drug: A 50
milligram (mg) tablet, a 100 mg tablet, and a 200 mg tablet, and it
sells all three products to hospitals. If the OTC drug manufacturer
placed the bar code on the 50 mg tablet labels, but not on the 100 mg
and 200 mg tablet labels, we would not consider the OTC drug
manufacturer to be in compliance with the rule. In this scenario, we
would expect the OTC drug manufacturer to put bar codes on the 100 mg
and 200 mg versions of its product as well.
(Comment 10) One comment asked us to clarify that the phrases
relating to hospital use and to institutional use pertained only to OTC
drug products.
(Response) The comment understands the rule correctly. The rule
applies to all prescription drug products (except for prescription drug
samples, allergenic extracts, intrauterine contraceptive devices
regulated as drugs, medical gases, radiopharmaceuticals, low-density
polyethylene form fill and seal containers, drug products shipped by
manufacturers, repackers, relabelers, and private label distributors
directly to patients, and blood and blood components). We explain the
reasons for excluding these drugs later in this section.
Insofar as OTC drug products are concerned, the rule applies to
those OTC drugs that are commonly used in hospitals and dispensed under
an order.
(Comment 11) One comment stated that we should require bar codes on
Betadine. The comment did not explain why it singled out this
particular OTC drug, but stated that including drugs such as Betadine
would allow computerized databases to check for potential allergic
reactions.
(Response) Betadine is an iodine solution and an OTC drug product
that is commonly used in hospitals, but only some versions are
dispensed under an order. Thus, under the final rule, only those
versions that are both commonly used in hospitals and dispensed under
an order would be subject to the bar code requirement.
While Betadine has the potential to cause allergic reactions, it
would be impractical to revise this rule to impose a bar code
requirement based on a drug's potential for allergic reactions. For
example, an individual might be allergic to a color additive used in a
drug; another individual might be allergic to a different drug
component. Accounting for all potential allergens would require
additional data to be encoded, and it may be difficult to accommodate
more data on product labels.
3. Must Vaccines Have a Bar Code?
In the preamble to the March 2003 proposal, we invited comment on
the risks and benefits of including vaccines in the rule (see 68 FR
12500 at 12505 and 12529). We explained that we were sensitive to
possible adverse impacts on vaccine production and availability.
(Comment 12) Most comments, including comments submitted by
individual vaccine manufacturers and a pharmaceutical industry trade
association, said vaccines should be subject to a bar code requirement.
Some
[[Page 9127]]
comments also stated that we should require lot number and expiration
date information to be encoded for vaccines, too, because such
information is needed for accurate medical records.
In contrast, several comments suggested that we consider carefully
the impact of bar coding on vaccines. Although these comments did not
recommend exempting vaccines from the rule, neither did they appear to
fully support bar codes on vaccines. For example, one comment said that
bar codes on vaccines will have minimal impact because most vaccines
are administered in physicians' offices, and bar code scanners will not
be readily available at those offices. Several comments, submitted by
health professional societies or organizations, urged ``caution,''
stating that a bar code requirement could disrupt vaccine supplies and
create a burden that exceeded the benefits of bar-coded vaccines.
Another comment suggested that we create a separate regulatory process
for vaccines and that we ``engage'' the vaccine industry to address
data encoding issues.
(Response) Vaccines are subject to the final rule's bar code
requirements by virtue of being prescription drugs. The comments did
not show that the costs of bar coding vaccines exceeded the benefits,
and we note that vaccine manufacturers themselves did not indicate that
a bar code requirement would adversely affect vaccine production or
supplies.
We decline, however, to require inclusion of lot number and
expiration date information in a vaccine's bar code. As we stated in
the preamble to the March 2003 proposal, the costs associated with
encoding lot number and expiration date information appear to exceed
the benefits (see 68 FR 12500 at 12507-12508). The comments did not
provide evidence that would alter the cost-benefit analysis regarding
lot number and expiration date information, so the final rule does not
require such information in the bar code. Nevertheless, as we stated in
the preamble to the March 2003 proposal, we will not object if firms
voluntarily encode lot number and expiration date information (see 68
FR 12500 at 12508).
We also decline to establish a separate regulatory process for
vaccines. We presented our concerns regarding bar codes and vaccines in
a notice of a public meeting (see 67 FR 41360, June 18, 2002) and in
the preamble to the March 2003 proposal (see 68 FR 12500 at 12504 and
12505). This rulemaking process, therefore, has given vaccine
manufacturers and other interested parties ample notice and opportunity
to participate on bar coding matters, so there is no public health need
to create a separate regulatory process for vaccine bar codes.
4. What Other Types of Drugs Should Be Subject to a Bar Code
Requirement?
a. Comments seeking to cover more drug products. (Comment 13) Many
comments stated that we should require bar codes on all human drugs.
Health care professionals and hospitals submitted most of these
comments, but the comments frequently gave no rationale for covering
all human drugs or argued that failure to require bar codes on all
human drugs would force hospitals to repack drugs and apply bar codes
themselves, thereby increasing the risk that hospitals might apply the
wrong bar code.
(Response) We decline to require bar codes on all human drugs. By
focusing on prescription drugs and certain OTC drug products, the rule
covers those drugs that are most likely to be involved in medication
errors. We also note that the rule should reduce the need for hospitals
to put bar codes on drugs.
If we required bar codes on all human drugs, then some drugs (such
as samples) would have bar codes even though they are used outside the
hospital setting and in situations where the patient is unlikely to
have access to, or be willing to buy, scanning or reading equipment to
read the bar code. Other drugs, such as certain toothpastes, mouth
rinses, and even homeopathic drugs (which are ``drugs'' under section
201(g) of the act (21 U.S.C. 321(g)) would also have to have bar codes
even though they are not associated with medication errors. Thus, bar
coding all human drugs is unnecessary and would not contribute
significantly to an overall improvement in patient safety.
(Comment 14) Two comments asked us to require bar codes on
investigational new drugs or asked if investigational new drugs are
subject to the rule.
(Response) Investigational new drugs have not been assigned NDC
numbers because the number of investigational new drugs is constantly
changing, and that constant change would exhaust the number of
available NDC numbers quickly.
In addition, bar codes on investigational new drugs also could
result in misleading information or compromise the clinical study. For
example, if the clinical trial involved placebo controls, and the
placebo used the same bar code as the investigational new drug, the bar
code could mislead the computerized database into believing that the
patient received an active ingredient rather than a placebo. If the
placebo used a different bar code compared to the investigational new
drug, the different bar code would reveal the difference between the
placebo and the investigational new drug and introduce bias into the
clinical study. Consequently, we decline to require bar codes on
investigational new drugs.
b. Comments seeking to exclude specific drug products. Although
nearly all comments supported the rule, many comments sought to exempt
or exclude particular products or classes of products from a bar code
requirement or asked us to create a provision allowing case-by-case
exemptions. In contrast, many comments, submitted mostly by hospitals
and individuals, opposed any exemptions or opposed exemptions for
specific products.
(Comment 15) Several comments asked us to exclude allergenic
extracts from the rule. The comments argued that allergenic extracts
encompass hundreds of different antigens, are sold directly to
physicians, physician group practices, and clinics (or are not commonly
used in hospitals) where bar code scanning equipment would not be used
or where physicians and patients would have no incentive to buy bar
code scanners, and that allergenic extracts do not always have NDC
numbers. Another comment said that allergenic extracts are unique and
tailored to each patient, so a manufacturer that had to comply with the
bar code requirement would have to obtain NDC numbers for each extract,
and this process would increase the likelihood of labeling errors. The
comment also stated that a bar code requirement for allergenic extracts
would be ``unduly burdensome'' and expensive; the comment estimated the
cost of putting bar codes on allergenic extracts to be more than
$120,000 for one firm alone.
(Response) We agree that allergenic extracts are used primarily in
physicians' offices and that physicians and patients are not likely to
buy or use bar code scanners. Consequently, we have excluded allergenic
extracts from the final rule.
Because we have decided to exempt allergenic extracts, we do not
find it necessary to address the comments' claims regarding burdens and
costs.
(Comment 16) Some comments asked us to exempt products that are
packaged together (``copackaged products''). One comment gave examples
of products sold with titration packages or sold with different
strengths or types in a package or carton that are used together. The
comment explained that each
[[Page 9128]]
component could have its own NDC number, and asked what NDC number
would be used for the copackaged product.
(Response) Even if two products are packaged together, and each
product has its own NDC number, the copackaged product would have its
own distinct NDC number. Thus, in the comment's example, the NDC number
in the bar code would reflect the copackaged product and be distinct
from the NDC numbers for the individual products, and so there is no
reason to exclude copackaged products from the rule.
(Comment 17) Many comments asked us to exclude medical gases from
the rule. The comments explained that compressed and liquid medical
gases should be exempt from the rule because:
[sbull] Gas cylinders are located at a central supply point away
from patients (so bar codes cannot be scanned easily);
[sbull] There is no easy way to affix a bar code at the quick-
connect patient usage area that would discriminate between gas
manufacturers;
[sbull] It is not technologically or financially feasible to have
bar codes or to expect paramedics (who may be administering a medical
gas) to use scanners;
[sbull] Cylinders and/or connectors are specific for gases;
[sbull] Cylinders are color-coded to reduce the potential for
error;
[sbull] Gases, unlike other drugs, have dosages that vary per
patient; and
[sbull] There are no known adverse events linked to medical gases.
Other comments asked us to exempt oxygen and medical gases for home
use, stating that patients are unlikely to have bar code scanners in
their homes, or that, for oxygen, the comment knew of no adverse
reactions between oxygen and other drugs.
(Response) We agree that medical gases should be exempt from the
bar code requirement. We do not, however, agree with all of the
comments' arguments for exempting medical gases.
We are exempting medical gases from the bar code requirement
because we conclude that bar codes on medical gases are not the best
way to address medication errors associated with such drug products. We
agree that, because medical gas cylinders are most frequently located
at a central supply point away from patients, bar codes would not be
scanned easily or in sufficiently close proximity to patients.
We also agree that there is no easy way to affix a bar code at the
quick-connect patient usage area that would differentiate among gas
manufacturers, and that the majority of medical gas cylinders are not
patient-specific, but, rather, are used to administer medical gas to
multiple patients. Because of these factors, which are unique to the
administration of medical gases, we believe that bar codes are not the
best way to address medication errors associated with medical gases.
We disagree with the arguments regarding the number of medical gas
medication errors and the existence of adequate safeguards against such
errors. The comments state that there have been very few medical gas
medication errors. Low numbers of medication errors, alone, cannot
justify an exemption. For example, if the type of medication error is
serious (such as an error that results in death), then it would be
difficult to justify an exemption on the grounds that a ``low'' number
of deaths occur. Moreover, we have no basis to establish a threshold or
baseline number of medication errors that would determine whether a
particular drug had to comply with the bar code requirement. Even if we
could establish such a threshold or baseline figure, that figure would
be subject to challenge because health care professionals are not
required to submit adverse event reports to us; in other words, the
adverse event reporting system can signal the possible existence of a
problem, but it cannot reliably predict the frequency with which such
problems may occur.
We also disagree with the comments' claim that current provisions
for the color-coding of high-pressure cylinders sufficiently protect
against medication errors. At this time, color-coding of high-pressure
cylinders is an industry recommendation rather than a requirement, so
we cannot assume that all affected parties will choose to follow the
recommendation. Additionally, injuries and deaths have resulted from
administering medical gas from incorrectly colored high-pressure
cylinders.
We also disagree with the comments' claim that medical gas
containers have ``unique connectors and valves'' that decrease the
potential for medication errors. Like color-coding, the use of unique
connectors and valves is an industry recommendation and not a
requirement. Our experience indicates that these connectors and valves
can be and have been compromised such that incorrect gas has been
administered, resulting in deaths and injuries.
Although we do not believe that bar codes are the best way to
reduce medication errors in the administration of medical gases, we
recognize the need for preventing such errors and have issued guidance
on the matter, including a ``Draft Guidance on the Current Good
Manufacturing Practice for Medical Gases'' (68 FR 24005, May 6, 2003),
as well as a ``Compressed Medical Gases Guideline'' (February 1989). We
intend to continue to evaluate medication errors associated with
medical gases, and, as necessary, we may propose a regulation to reduce
or prevent those errors.
(Comment 18) Two comments focused on contraceptives. One comment
asked us to exempt oral contraceptives. The comment stated that it will
be difficult to put bar codes on oral contraceptives because the
tablets are contained in individual blister cells. The comment noted
that oral contraceptives also have information regarding drug regimen
compliance and placebos built into the package. The comment added that
oral contraceptives are used outside the hospital setting.
The other comment asked us to exclude the Copper T intrauterine
contraceptive and other intrauterine devices that are regulated as
drugs. The comment asserted that these products are inserted into
patients by physicians, are used outside hospital settings, and present
no potential dosage error or administration error.
(Response) We decline to exclude oral contraceptives from the rule.
Although oral contraceptives are contained in individual blister cells,
those cells are usually placed in a single package with a single label,
so the bar code would go on the label rather than on each individual
blister cell. As for their use, we agree that oral contraceptives are
used outside hospital settings, but do not believe that they are never
used in hospitals.
As for the Copper T intrauterine contraceptive and other
intrauterine products, we agree that such products, when used as
specified, do not present medication error risks in the same manner as
other prescription drug products, and we have excluded them from the
rule. (These intrauterine contraceptive products are devices, but are
regulated as drugs.) We also note that some hospitals may have
additional procedures, such as requiring informed consent, before these
intrauterine products are inserted, and those procedures may further
reduce the risk of error.
(Comment 19) One comment asked us to exclude cosmetic-drug products
which the comment characterized as not being subject to dosage
limitations, such as anti-dandruff shampoo, deodorants, skin
protectants, soaps, and sanitizers.
(Response) We decline to amend the rule as requested by the
comment. Most products described by the comment would be OTC drug
products and
[[Page 9129]]
probably would not be dispensed under an order. As a result, such
products would not be subject to the bar code requirements. (It is also
possible that some products, such as soaps, would be considered to be
cosmetics rather than OTC drug products and would also be outside this
rule.) We reiterate that only OTC drug products that are commonly used
in hospitals and dispensed under an order are subject to the bar code
requirements.
(Comment 20) Several comments sought an exemption for diluents. (A
diluent is an agent, usually a liquid, that dilutes a substance (a
drug, in this case) or makes it less potent or less irritating.) One
comment claimed that diluents are not drugs, but acknowledged that some
diluents do have NDC numbers. Another comment would not put bar codes
on diluents that are packaged with another drug product because, the
comment asserted, misidentification could occur after the diluent has
been reconstituted with the other drug product. Another comment
declared that bar codes on diluents should be voluntary and driven by
the market rather than by regulation. Several other comments mentioned
diluents or drug/diluent kits in a list of small products that, in the
comments' view, warranted a waiver from the bar code requirement.
(Response) We decline to exclude diluents from the rule. Diluents
are drugs under section 201(g)(1)(D) of the act if they are intended to
be components of a drug. We are aware of medication errors involving
diluents, so bar codes on diluents might help reduce or eliminate such
errors. For example, bar codes on diluents could help prevent the
following types of medication errors involving diluents:
[sbull] Use of the incorrect or improper diluent. Certain drug
products are compatible with specific diluents, so using the incorrect
diluent can compromise patient safety, especially if the incorrect
diluent causes a precipitate to form that is not recognized when the
drug is administered. Some precipitates are not recognizable by the
human eye. An incorrect diluent can also be a problem if the patient
has a particular medical condition (e.g., a diabetic patient receiving
a diluent consisting of dextrose in water rather than normal saline). A
bar code could alert a health care professional to the presence of an
incorrect or improper diluent.
[sbull] Use of the incorrect amount of diluent. This can cause an
incorrect final concentration of a drug, resulting in either an
overdose or underdose of the prescribed drug. A bar code could verify
that a diluent's amount was correct.
[sbull] Use of a diluent alone. We have reports where diluents were
administered without the active ingredient. This error appears more
likely to occur when the diluent and drug are removed from their
package. In one case where a patient was supposed to receive an
antibiotic oral suspension which was supplied as a lyophilized powder
in a small bottle and milky white diluent in a larger bottle, the
patient received the diluent only and not the antibiotic itself. A bar
code could alert a health care professional that he or she is
administering a diluent only.
[sbull] Incorrectly packaged or labeled diluents. There have been
cases where a package was supposed to contain a diluent and active drug
ingredient, but the product was incorrectly packaged so that it
contained two vials of diluent. A bar code could alert a health care
professional that the package contains only diluents.
If, as one comment indicated, a diluent does not have an NDC
number, an NDC number should be obtained for that product. If a diluent
is packaged with another drug, then, as we stated in our response to
comment 16 of this document, the diluent, the drug, and the copackaged
product would each have its own distinct bar code. Thus, if the diluent
were separated from the drug in a copackaged product, the diluent would
still have its own distinct bar code, and that bar code could be
scanned.
(Comment 21) One comment asked that we exclude drug products that
are shipped directly to patients. The comment gave an example of
peritoneal dialysis solutions and said that an exclusion would be
appropriate because patients would not be inclined to buy and use bar
code scanners within their homes. The comment also claimed that the
product it shipped is not typically used in hospitals.
(Response) We agree, in part, with the comment. If a prescription
drug product is shipped directly from a manufacturer, repacker,
relabeler, or private label distributor to a patient, then we will not
require that product to be bar coded. We agree that patients will not
have or be inclined to buy scanners for use within their homes.
However, similiar to our response to comment 9 in section II.B.2 of
this document, if the same prescription drug product is marketed to
hospitals, then we will expect that drug to have a bar code. In other
words, to use the comment's example of a peritoneal dialysis solution,
a manufacturer could produce two different versions of the same
product; the version sold directly to patients would not have to have a
bar code, but the version that is intended for sale to hospitals will
be subject to the bar code requirement. By requiring the latter version
to be bar coded, we will help prevent or reduce medication errors in
the hospital.
(Comment 22) Several comments asked us to exclude nebules from the
rule. (A nebule is a vial or container that holds a drug, usually in
liquid form, before the drug is administered or dispensed in a device
called a nebulizer.) The comments explained that we have been reluctant
to approve nebules with a label due to concerns that labeling
components could leach into the nebule and contaminate the drug. One
comment added that, even if we were to approve a label on a nebule, it
was unclear how a manufacturer could print the bar code.
Another comment asked whether the rule should apply to
pharmaceuticals packaged with low-density polyethylene (LDPE) form fill
and seal containers. The comment explained that placing a bar code on
such products would present a drug stability issue. The comment said
that if the rule applied to these products, then drug manufacturers
would need additional time to comply with the rule because they would
need to conduct stability tests.
(Response) The comments are correct that printing a bar code on
such products could introduce volatile impurities into the drug
(because the ink from the bar code could leach into the drug). We have
provided guidance on LDPE container closure systems in ``Guidance for
Industry on Inhalation Drug Products Packaged in Semipermeable
Container Closure Systems'' (July 2002).
However, we also know that some products may be packaged with a
foil overwrap. Consequently, we are granting a limited exemption. We
will not require a bar code on LDPE form fill and seal containers that
are not packaged with an overwrap, due to the potential leaching and
contamination problem. (We do not need to mention nebules in this
limited exemption because nebules are LDPE form fill and seal
containers.) If the product is packaged with an overwrap, then we will
expect the bar code to be displayed on the overwrap. A bar code on the
foil overwrap (the secondary protective packaging) for individual or
multiple LDPE units will not be in direct contact with the drug
product, and the foil overwrap will prevent the ink and other
impurities from contaminating the drug.
[[Page 9130]]
(Comment 23) One comment asked us to exclude prescription dental
drugs from the rule. The comment claimed that prescription dental drugs
are not used in hospitals and are applied by dentists in their offices
or prescribed for home use, so bar codes would not be helpful.
(Response) We decline to exclude prescription dental drugs from the
rule. We believe that prescription dental drugs are used in hospitals,
so bar codes on prescription dental drugs would help prevent medication
errors.
(Comment 24) One comment said we should exempt radionuclear drugs
from the rule. The comment explained that the outside containers of
radiopharmaceuticals are lead ``pigs'' that encase syringes and vials
and are used to ship radioactive materials. The lead pigs are recycled,
so any bar codes on the pigs would have to be removable. However, the
comment claimed, a removable bar code on the lead pigs would require
new labeling or shrink wrapping equipment, thus leading to a
significant financial burden on nuclear pharmacies. The comment added
that radiopharmaceuticals have a low ``misadministration'' rate of 30-
40 reportable ``events'' annually compared against more than 14 million
nuclear medicine procedures in 2002. The comment also claimed that a
bar code would require nuclear pharmacies to amend their Nuclear
Regulatory Commission (NRC) Agreement State licenses because the
licensing authority would have to approve all labeling changes.
(Response) We agree that radiopharmaceuticals prepared at nuclear
pharmacies should be exempt from the bar code requirement. The comment
correctly stated that radiopharmaceuticals have a low misadministration
rate. According to NRC data, the number of reportable medical
misadministrations of radiopharmaceuticals has been in the range of 32
to 42 out of more than 14 million administrations per year for the last
5 years. The highest number of reportable misadministrations occurred
in 1998, when there were 42 reportable events; this represented the
highest total since the NRC began collecting data under the Government
Performance and Results Act of 1992.
Low medication error rates are not, however, sufficient to warrant
an exemption from the bar code requirement. Instead, our principal
reason for exempting radiopharmaceuticals is that NRC regulations
pertaining to the medical use of radiation byproducts render bar codes
unnecessary for patient safety. For example, NRC regulations require,
in many cases, that radiopharmaceuticals be administered under a
written directive that ensures verification of a patient's identity
before each administration (see 10 CFR 35.40(a) through (b), and
35.41(a) through (b)). We believe that NRC regulations pertaining to
the use of radiation byproducts provide sufficient safeguards in
preventing medication errors involving radiopharmaceuticals, and,
because of this alternative regulatory program for these products, the
benefits associated with a bar code would not justify the costs.
Because we have decided to exempt radiopharmaceuticals from the bar
code requirement, we do not need to address the comment's other claims
regarding labeling, packaging, and financial burdens.
(Comment 25) One comment, submitted by an OTC drug manufacturer,
asked us to exempt its OTC drug products due to their ``distinctive
form'' and ``clear labeling.'' The comment said that medication errors
for its products (such as ready-to-use enemas, suppositories, and
medicated topical creams) are ``exceedingly rare.''
(Response) We decline to exclude OTC drug products that purport to
have a ``distinctive form'' and ``clear labeling.'' A product's
``distinctive form'' and labeling do not preclude the possibility of
drug interactions, wrong drug, wrong dose, wrong route of
administration, or other types of medication errors.
We also decline to exclude OTC drug products, or even prescription
drug products, from the rule even if their potential for medication
errors is ``exceedingly rare'' (as the comment claimed). We have no
basis to establish a threshold or baseline medication error rate that
would determine whether a product should have a bar code, and even a
``low'' medication error rate could result in death or harm to
patients. Furthermore, if we linked the bar code to a drug's medication
error rate, the result could be that a drug might be bar coded at one
time if its medication error rate exceeded the threshold, but not bar
coded once the medication error rate fell below that threshold, and
this could create confusion. For example, assume that the rule based
the bar code requirement on a medication error rate of 5 percent. If
Drug X had a medication error rate of 5.2 percent in Year A, it would
be bar coded. If Drug X had a medication error rate of 4.9 percent in
Year B, then it would not be bar coded. However, in all likelihood, in
Year B, both bar coded and nonbar coded versions of Drug X would exist
in the marketplace. If Drug X's medication error rate was 5.1 percent
in Year C, the drug would, again, be subject to the bar code
requirement. In such circumstances, the bar code would lose its value
and reliability, insofar as medication errors are concerned, because
hospitals would confront a constantly changing environment of drugs
that have or lack bar codes, and hospitals would either not rely on
such codes or lose confidence in the bar code system.
(Comment 26) One comment asked whether pharmacy-compounded
prescription drugs would be subject to the bar code requirement.
(Response) As we noted in the response to comment 1 of this
document, under section 510(g) of the act, pharmacies:
which maintain establishments in conformance with any applicable
local laws regulating the practice of pharmacy and medicine and
which are regularly engaged in dispensing prescription drugs or
devices, upon prescriptions of such practitioners licensed to
administer such drugs or devices to patients under the care of such
practitioners in the course of their professional practice, and
which do not manufacture, prepare, propagate, compound, or process
drugs or devices for sale other than in the regular course of their
business of dispensing or selling drugs or devices at retail
do not have to register their establishments or list their products
with FDA. Thus, a pharmacy that compounds drugs in accordance with this
provision would probably fall outside Sec. 201.25(a) and compounded
drugs made by that pharmacy would not have to bear a bar code.
We also note that pharmacy-compounded drugs do not have NDC
numbers.
(Comment 27) Several comments focused on drugs in small vials or
containers. Comments from several drug manufacturers and a trade
association suggested that we exempt small vials and/or small
containers from the rule, and several of these comments mentioned 5
milliliter (mL) vials, suppositories, small ophthalmic containers,
prefilled syringes, and blister packs as examples of products that need
an exemption. The comments stated that some vials or containers would
be too small for a bar code. One comment suggested exempting vaccine
unit-of-use containers if a manufacturer demonstrated an inability to
apply a bar code due to space limitations.
In contrast, several comments strongly opposed exemptions for small
vials and ampules. These comments explained that many of these products
are high-
[[Page 9131]]
risk medications or that most injectable products come in small vials
or ampules. Other comments said that liquid medications are more often
linked to medication errors than solid dosage forms, so creating an
exemption for vials and ampules would undermine the rule's
effectiveness. Other comments opposed exemptions for small vials
because the absence of a bar code would force hospitals to apply bar
codes to the products themselves, and this would create the potential
for labeling errors by the hospital.
One comment, submitted by the UCC, stated that, ``No [UCC]
pharmaceutical member has presented the UCC with a healthcare product
too small for a [Reduced Space Symbology] symbol.'' However, the UCC
could not preclude the possibility that some small product could not be
bar coded, although it did note that one firm had put bar codes on
vials as small as 1 mL. The UCC comment also contained attachments
describing how several pharmaceutical manufacturers (Abbott
Laboratories, Baxter Healthcare Corp., Pfizer, Inc., and Aventis
Behring) had decided to put bar codes on injectable pharmaceuticals,
intravenous solutions, and other drug products.
(Response) We decline to exempt small vials or containers
(including suppositories, prefilled syringes, and other small products
for which comments sought exemptions). We agree that the risk of
medication errors for these products cannot be ignored, and we also
find the UCC's comments persuasive. If several pharmaceutical companies
have already shown their ability to place a bar code on a 1 mL vial, we
cannot justify a blanket exemption for comparatively larger products,
such as 5 mL vials, and prefilled syringes.
Furthermore, we note that Sec. 201.25(c) requires the bar code to
appear on the drug's label. For some products described by the
comments, the drug's label appears on an overwrap or packaging.
Alternatively, it may be possible to modify the drug's immediate
container to accommodate a label bearing a bar code.
c. Comments seeking a general exemption provision. (Comment 28) In
the preamble to the March 2003 proposal, we explained our reasons for
not including a general exemption provision (see 68 FR 12500 at 12511
through 12512). We noted that industry-conducted pilot studies had
placed reduced space symbology (RSS) bar codes on small vials and that
those studies suggested that almost all products are capable of bearing
a bar code. We also pointed out practical problems with an exemption
provision, such as potential arguments as to whether it was
``feasible'' to affix a bar code and the resources that would be needed
to deal with exemption requests (id.). Nevertheless, the preamble to
the March 2003 proposal invited comment on whether we needed to create
a waiver provision and how we could create a provision that would
minimize the potential for misuse (see 68 FR 12500 at 12529 (question
8)).
Most comments opposed a general exemption or waiver provision. The
comments said we would find ourselves expending resources to deal with
exemption requests and that exemptions would cause more harm than good.
Some comments opposed creating an exemption mechanism because they
would prefer to have manufacturers repack their products or develop
packaging that would support a bar code. Other comments noted that, if
we exempt various products from the rule, hospitals will be forced to
bar code those products themselves, and this could result in labeling
errors and require hospitals to rely on two different data systems (one
for bar codes with NDC numbers and another for drugs that the hospital
has bar coded itself).
A few comments suggested that we create an exemption provision that
would consider requests on a case-by-case basis or would be
``limited.'' The comments did not suggest how we might prevent misuse
of an exemption provision. Another comment asked that we define an
exemption review process.
(Response) Given the number of comments we received requesting an
exemption for a specific product or class of products, the fact that
the final rule contains certain categorical exemptions requested by
some comments, and our inability to predict every future product or
class of products for which an exemption might be justified, we felt it
would be prudent to add a general exemption provision to the rule.
Consequently, we have added a new Sec. 201.25(d) which states that we
may, on our own initiative or in response to a written request from a
manufacturer, repacker, relabeler, or private label distributor, exempt
a drug from the bar code requirement. The exemption request, under
Sec. 201.25(d)(1)(i), must document why compliance with the bar code
requirement would adversely affect the drug's safety, effectiveness,
purity, or potency or not be technologically feasible. The request must
also explain why the problem cannot be reasonably remedied by measures
such as package redesign or use of overwraps. Alternatively, under
Sec. 201.25(d)(1)(ii), the request must document why an alternative
regulatory program or method of product use renders the bar code
unnecessary for patient safety. For example, as explained earlier in
our response to comment 24 of this document, we exempted
radiopharmaceuticals from the bar code requirement because existing NRC
regulations on the medical use of radiation byproducts render the bar
code unnecessary for patient safety.
Section 201.25(d)(2) provides the address to which exemption
requests should be sent. For human drug products, the request should be
sent to the Office of New Drugs (HFD-020), Center for Drug Evaluation
and Research, Food and Drug Administration, 5600 Fishers Lane,
Rockville, MD 20857. For biological products, the request should be
sent to the Office of Compliance and Biologics Quality (HFM-600),
Center for Biologics Evaluation and Research, Food and Drug
Administration, 1401 Rockville Pike, Rockville, MD 20852.
We reiterate that we have created this general exemption provision
to allow us to efficiently and justly address products or classes of
products that we have not already considered. We emphasize that almost
all drug products are capable of bearing, and should in fact bear, a
bar code. We will not consider written requests that are based on other
reasons (such as financial reasons, a claimed low rate of medication
errors, or a claim that the product is somehow unique such that
medication errors do not occur or rarely occur). Similarly, we will not
entertain written requests seeking an exemption for a particular drug,
class of drugs, or group of products when we have already refused to
grant an exemption for the same drug, class of drugs, or group of
products in this final rule. The general exemption provision is
intended to be used in rare cases.
If we refuse to grant an exemption in response to a written
request, our decision can be reviewed under our existing regulation at
21 CFR 10.75, ``Internal agency review of decisions.''
5. Should Medical Devices Be Excluded From the Rule?
The preamble to the March 2003 proposal explained that we did not
intend to issue any bar code requirement for medical devices at this
time (see 68 FR 12500 at 12506). The preamble to the March 2003
proposal stated that devices present different issues compared to human
drug and biological products and that we would continue to study
whether to develop a proposed rule to require bar codes on
[[Page 9132]]
medical devices to prevent or reduce medication errors (id.).
(Comment 29) Two comments said we should reject the device
industry's request for further study and require bar codes on devices.
The comments said that implantable devices are made to detailed
specifications and sometimes fail, so one could presume that a device
manufacturer would recall defective devices. The comments added that
bar codes on devices would help create patient records that could be
easily searched so that hospitals could determine an appropriate course
of action if a patient received an implantable device that was
recalled.
Other comments argued that we should examine the benefits of bar
code labeling on devices or that bar codes would be helpful on certain
devices. For example, one comment said that patient safety would be
further enhanced by applying bar codes to devices such as blood bags,
filters, and apheresis kits.
Conversely, one comment agreed with our decision to omit devices
from the rule. The comment said that devices present ``unique'' issues,
such as product diversity, evolving coding technology, and unique
product identification needs that are often negotiated between
customers and device manufacturers. The comment recommended that we
allow for voluntary use of Universal Product Numbers (UPNs) on devices
in either the European Article Number/Uniform Code Council (EAN/UCC) or
Health Industry Business Communications Council (HIBCC) standard. The
comment explained that the UPN system is established and provides
greater consistency with global identification trends compared to the
NDC number.
(Response) We decline to include devices in the final rule. Unlike
drugs, medical devices do not have a standardized, unique identifying
system comparable to the NDC number. (There is a National Health
Related Items Code (NHRIC) system for identifying and numbering
marketed medical device packages, but participation in the NHRIC system
is voluntary, and the database may contain out-of-date information due
to industry acquisitions and mergers.) The absence of a standard,
numerical identification system comparable to the NDC number is one of
several issues that complicate efforts to put bar codes on medical
devices for purposes of preventing or reducing medication errors.
We also note that permanently implantable devices are subject to
our device tracking requirements at part 821 (21 CFR part 821), and
those requirements can be quite detailed. For example, under Sec.
821.25(a)(2)(iii), a device manufacturer must have a method of tracking
each device that it distributes that enables the manufacturer to give
FDA, within 10 working days of a request from FDA, information
regarding the name, address, telephone number, and social security
number (if available) of the patient receiving the device.
As for voluntary use of UPNs on medical devices and the use of
EAN.UCC or HIBCC standards, we recognize that some devices already bear
a bar code for reasons relating to purchasing or inventory control, and
we have not objected to their use nor to the bar code standards used.
C. What Must the Bar Code Contain? (Sec. 201.25(c)(1))
1. Should We Require the Bar Code to Contain the NDC Number?
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 or section 351
of the PHS Act.
(Comment 30) Two comments claimed that their products, allergenic
extracts, do not have NDC numbers. The comments stated, as part of a
request to have allergenic extracts excluded from the rule, that FDA
has allowed generic groupings for allergens under one NDC number. The
comments added that they market nearly 200 to 300 allergens in four
different package configurations each, so, if allergenic extracts had
to carry bar codes, the firms would need from 800 to 1,200 new NDC
numbers respectively, and this would have ``enormous'' implications for
the firms and FDA.
(Response) As we stated in our response to comment 15 in section
II.B.4.b of this document, we have excluded allergenic extracts from
the rule. As a result, issues regarding NDC numbers for allergenic
extracts are moot.
(Comment 31) Several comments focused on the NDC number itself. One
comment said that the NDC number contains the necessary information for
bar code purposes. However, several comments argued that OTC drug
products should be allowed to use the Universal Product Code (UPC)
number either instead of or in addition to the NDC number. Some
comments said that OTC drug manufacturers would incur thousands of
dollars of ``unnecessary extra `new item' costs'' because different NDC
numbers would be necessary for new, minor formulation changes to their
drugs and create logistical complications for retailers (because
retailers use the UPC codes). Two comments said that requiring OTC drug
bar codes to contain the NDC number would increase the demand on NDC
numbers, increase FDA's workload, or exhaust the number of available
NDC numbers. One comment said it should be feasible for a database to
handle both NDC and UPC numbers, whereas another comment said that
allowing OTC drug products to continue using UPC numbers would make
more NDC numbers available for other drug products and thus benefit the
NDC number system.
Another comment supported the use of the NDC number with four extra
digits. The comment said this 15-digit number, called ``NDC Plus
Four,'' would identify individual doses and vital information about the
drug, including, among other things, the drug's lot number, expiration
date, and recall status.
Another comment asked us to change the NDC number so that it
contained a drug's expiration date.
(Response) We decline to amend the rule as suggested by the
comments. The UPC code does not necessarily identify a unique drug
product. For example, if an OTC drug manufacturer made and sold a
particular drug product, that drug product would have a UPC code, and
it would also have a unique NDC number. If the OTC drug manufacturer
reformulated the product (such as changing an ingredient), the
manufacturer could use the same UPC code for the reformulated product,
but the reformulated drug would have a different, unique NDC number.
This could be significant to a patient's health if, for example, the
reformulated product contained an ingredient that caused allergic
reactions or drug interactions. Thus, requiring the use of NDC numbers,
rather than UPC numbers, will help ensure that the drug is identified
correctly.
Additionally, as we stated in the preamble to the March 2003
proposal (see 68 FR 12500 at 12507), we intend, through a separate
rulemaking, to change the NDC number so that it becomes a unique
identifying number for listed drugs. If we were to allow the use of
other coding systems, such as UPC numbers that did not contain the
drug's NDC number or an NDC number with additional digits, persons who
wanted to decipher a drug's bar code would need to consult multiple
information sources, and this would increase the likelihood that some
information and databases might not be updated as frequently as others,
that
[[Page 9133]]
some information might be unavailable, or that the information would be
presented in different or incompatible ways. Although we understand the
OTC drug industry's reservations about changing UPC codes to include
NDC numbers because of a possible cost impact, Sec. 201.25(b) only
requires bar codes on OTC drug products that are dispensed under an
order and are commonly used in hospitals. Furthermore, as we stated in
our response to comment 9 of this document, we will allow OTC drug
manufacturers to create bar coded and nonbar coded versions of the same
OTC drug product; the bar coded versions, which would be intended for
hospital sale and use, would carry the NDC number in the bar code. The
versions intended for retail sale could continue to use the UPC code.
We also decline to revise the NDC number to include expiration
dates or to add more digits to the NDC number. Revising the NDC number
is outside the scope of this rule. Furthermore, expiration dates vary
with each new batch or production run, so if we were to revise the NDC
number to include expiration dates, we would quickly exhaust the number
of available NDC numbers and be forced either to redefine the NDC
number or develop an alternative system relatively quickly, and other
databases that relied on the NDC number would also be forced to adapt
or develop new systems themselves. Restructuring the NDC number in this
manner would, therefore, be impractical and costly.
Similarly, adding more digits to the NDC number might be disruptive
for those databases that already use or rely upon the NDC number. Those
databases would either have to reconfigure themselves to handle 14-
digit numbers (assuming all preexisting NDC numbers were modified to
contain 14 digits) or reconfigure themselves to handle 10- and 14-digit
NDC numbers (assuming that preexisting NDC numbers remained the same,
but new drugs would receive a 14-digit number). Such reconfigurations
could be expensive for those who maintain the databases and those who
use them. A 14-digit number could also be either redundant or confusing
in comparison to the Global Trade Item Number (GTIN). As the preamble
to the March 2003 proposal mentioned, the GTIN is a 14-digit number
which, when used in a bar code on drug products, contains the NDC
number in conjunction with a code that identifies the product's packing
level (see 68 FR 12500 at 12506).
(Comment 32) Two comments asked us to ensure that different parties
use different NDC numbers. One comment said that the proposed rule
failed to explain how repackers will distinguish a repacked product
from the original manufacturer's package. The comment suggested that
manufacturers use certain digits to signal the presence of an original
manufacturer's package and that repackers use other digits to identify
repackaged products. The comment said we should require repackers to
have a manufacturer's identification number.
The other comment asked that we ensure that hospitals do not use
the manufacturer's NDC codes when repacking a drug.
(Response) As we stated in our response to comment 2 of this
document, if a repacker, relabeler, or private label distributor is
subject to the establishment registration requirement at section 510 of
the act, then that person is also subject to the bar code requirements
and must use its own NDC numbers on its products. In other words, a
manufacturer, repacker, relabeler, or private label distributor cannot
and should not use an NDC number that is not assigned to it. Use of
another establishment's NDC number in the bar code would cause the
product to be misbranded under section 502(a) of the act because the
drug's label would be misleading.
Hospitals, though, are exempt from the establishment registration
requirements. Consequently, hospitals themselves are not subject to the
bar code requirement, and we consider drug repacking and dispensing
operations inside hospitals to be within the practice of pharmacy.
(Comment 33) Several comments addressed possible changes to the NDC
number. The preamble to the proposed rule stated that we intended to
redefine the NDC number through a proposed rule on drug establishment
registration and listing (see 68 FR 12500 at 12506). Most comments
opposed any redefinition of the NDC number. One comment said that
redefining the NDC number would create confusion, possibly harm
patients (although the comment did not explain how such harm would
occur), and undermine the bar code rule. Other comments said that
redefining the NDC number would be costly and disruptive to various
databases that rely on or use NDC numbers. One comment said that we
should not make a final bar code rule effective until the drug industry
has had the opportunity to understand and comment on any changes to the
NDC number. A different comment said we should consult various
``stakeholders'' before we make changes to the NDC number. Another
comment said that we did not need to redefine the NDC number because
the GTIN would provide ``sufficient direction.''
(Response) As we stated in the preamble to the March 2003 proposal,
we intend to revise our drug establishment registration and listing
regulations to make the NDC number unique and more useful to
informational databases, whether those databases are created to prevent
medication errors, to obtain the latest information about a drug, or to
track drug use and distribution. We are still preparing the proposed
rule, and when we publish it in the Federal Register, we will invite
comment on our proposed NDC number changes. Until we revise our drug
establishment registration and listing regulations, the current
requirements at Sec. 207.35 continue to apply to the NDC number.
We also must point out that, even under a proposed drug
establishment registration and listing rule, assuming there is no
change in the product or packaging, we do not intend to replace
currently-used NDC numbers. For existing NDC numbers, we would consider
issuing a new number to an existing drug product only if there were two
drugs that had the same NDC number.
(Comment 34) One comment criticized the NDC number, stating that it
cannot tell whether the right dose is being administered because the
actual dose may be a partial dose or multiple doses of the drug
identified by the bar code. The comment said this reflected a
technological limitation with NDC numbers, so the comment suggested
that the computer systems used to document drug administration alert
users and require manual intervention by health care professionals to
verify doses.
(Response) The comment is correct that the NDC number may have
certain limitations when different dosages are administered from a
single package or when partial dosages are administered. For example,
assume that a drug's package contains 20 tablets. The drug's NDC number
will reflect the fact that the package contains 20 tablets. If the drug
administered to the patient consists only of one tablet, then scanning
the NDC number for the package alone will not show the correct dose
given to the patient. The NDC number's principal value, in this
scenario, is verifying that the correct drug in the correct dosage form
is being administered. As another example, some drug product labels do
not state pediatric dosages, so a physician might prescribe a partial
dose for a pediatric patient. In this scenario, the NDC
[[Page 9134]]
number's principal value is verifying that the correct drug, in the
correct dosage form, is being administered.
Regarding the comment's suggestions concerning computer systems, we
agree that it could be helpful if a computerized database alerted
health care professionals to check dosages given to patients. However,
we do not intend to create, maintain, or regulate the databases that
scanning equipment would consult to decode NDC numbers, so we advise
parties to consider this issue when they develop computer systems
associated with scanners to decode the NDC numbers.
2. Should the Bar Code Contain Lot Number and Expiration Date
Information?
The March 2003 proposal would not require the bar code to contain
the drug's lot number or expiration date. In the preamble to the March
2003 proposal, we explained that we were unable to show that the
benefits associated with encoding lot number and expiration date
information exceeded the costs, so we proposed to omit lot number and
expiration date information from the bar code (see 68 FR 12500 at
12507). However, we also said that we would not object if drug
manufacturers, repackers, relabelers, and private label distributors
decided to encode lot number and expiration date information
voluntarily (id. at 12508). We stated that industry representatives had
suggested that they might add such information if a demand existed for
it (id.), but we did not know whether hospitals and other health care
facilities would be willing to pay more for drugs that had lot number
and expiration date information encoded in the bar code. We invited
comment on the costs and benefits associated with putting lot number
and expiration date information in the bar code.
(Comment 35) Many comments urged us to require lot number and
expiration date information in the bar code, but did not provide
evidence to support their views. Instead, most comments declared that
lot number and expiration date information would make it easier to
identify recalled, contaminated, and expired drugs, would improve
entries into medical records, or would provide greater patient safety.
Other comments said we should phase-in a requirement to encode lot
number and expiration date information over an extended time period,
but did not discuss why a phased-in approach would alter the cost-
benefit problem that we identified in the preamble to the proposed
rule. Some comments would extend the rule's effective date to give
firms more time to encode such information. Another comment urged firms
to encode lot number and expiration date information, but only if the
costs were not passed on to hospitals.
Other comments advanced different arguments for requiring lot
number and expiration date information as part of a bar code. For
example, one comment stated that the American Society of Hospital
Pharmacists and others want lot number and expiration date information
encoded, and so we should defer to them. Several comments said
manufacturers should encode such information because they could do so
at less cost compared to hospitals.
Several comments advocating the inclusion of lot number and
expiration date information in a bar code argued that technology could
encode such information. For example, one comment claimed that the
information can be easily encoded using two-dimensional symbologies and
noted that some manufacturers plan to encode such information
voluntarily. Another comment noted that the GTIN, rather than the NDC
number alone, could be used to provide additional patient safety
information. Another comment declared that encoding lot number and
expiration date information could be inexpensive because, the comment
noted, firms already print the same information, in human-readable
form, on packages.
In contrast, other comments supported our decision to omit lot
number and expiration date information from the rule. Several comments
conceded that the information could help trace recalled drugs and help
with product inventory, but said that the information would not
significantly reduce medication errors and that the costs of encoding
the information would exceed the benefits. For example, one comment
estimated that encoding lot number and expiration date information
would cost $7,500 to $20,000 per manufacturer's line, excluding costs
to verify the information. Several comments expressed concerns about
the impact on production line speed. For example, one comment said that
the online printing equipment that would be needed for encoding lot
number and expiration date information is ``highly ineffective and
unreliable'' at production speeds above 120 units per minute and that
alternatives, such as preprinting labels, would present serious good
manufacturing practice (GMP) concerns in verifying that the right label
with the correct lot number and expiration date is used on the correct
product. Another comment said that online printing and verification
technology has not been demonstrated at production line speeds of 250
to 300 units per minute. A different comment listed various problems
associated with online printing of lot number and expiration date
information, such as adverse impacts on line speed and print quality,
the need to develop unique bar codes for each packaging run, and
limiting packaging options until printing and packaging technology
becomes capable of supporting online product speeds and adequate print
quality.
Another comment said we were correct to omit lot number and
expiration date information from the rule because it would make bar
coding more complex and perhaps discourage manufacturers from making
unit-dose packages. The comment, along with other comments opposed to
requiring lot numbers and expiration dates in a bar code, shared our
view that the market would determine whether manufacturers and others
encode lot number and expiration date information voluntarily.
One comment suggested that, if we decide to require lot number and
expiration date information to be encoded, the information should only
go on shipping cartons and not on individual packages because this
would reduce the manufacturer's costs.
The comments also disagreed on how to interpret our recall data.
The preamble to the proposed rule stated that we had examined the
number of recalled drugs from fiscal year 1997 through fiscal year 2002
and that, while there were 1,230 recalls during that time period, there
were few reports of adverse experiences associated with the
administration of a recalled drug (see 68 FR 12500 at 12507). One
comment said this data supported inclusion of lot number and expiration
date information in the bar code because Class I recalls represent a
reasonable probability that the use or exposure to the drug will cause
serious adverse health consequences or death, and 97 of the 1,230
recalls were Class I recalls. In contrast, a comment that opposed
inclusion of lot number and expiration date information in the bar code
said the data were not sufficient to show any public health problem
resulting from the administration of recalled or expired drugs.
(Response) The final rule does not require lot number or expiration
date information to be included in the bar code. As we stated in the
preamble to the March 2003 proposal, the data available to us do not
indicate the magnitude of the public health problem associated with
administering expired or recalled drugs, and we cannot
[[Page 9135]]
quantify the patient safety benefit associated with requiring lot
number and expiration date information in the bar code (see 68 FR 12500
at 12507). The potential burden of encoding lot number and expiration
date information appears to outweigh the potential benefit of encoding
such information.
We emphasize that we do not dispute whether encoded lot number and
expiration date information would be helpful in certain contexts that
are unrelated to medication errors. We also do not dispute that the
technology exists to encode such information or that certain firms have
expressed their intent to encode such information. Nevertheless, while
we recognize the strong desires expressed by some regarding lot number
and expiration date information, we must also recognize the potential
impact on manufacturers, repackers, relabelers, and private label
distributors if we required them to encode lot number and expiration
date information. The evidence before us indicates that the costs
associated with encoding lot number and expiration date information,
insofar as medication errors are concerned, exceed the benefits, so we
decline to require such information as part of the bar code.
We reiterate that we will not prevent or prohibit firms from
encoding lot number and expiration date information if they wish to do
so, and we note that some drug manufacturers are encoding or intend to
encode such information. We also remind hospitals and other potential
bar code users that lot number and expiration date information may be
encoded in two-dimensional or other technologies, so if they intend to
purchase drug products with lot number and expiration date information
encoded, they should consider carefully their scanning or reading
equipment purchases (see 68 FR 12500 at 12507).
(Comment 36) Several comments would require other information to be
encoded. For example, one comment said we should require the bar code
to contain information regarding the drug's concentration, amount, and
route of administration. The comment explained that information on the
drug's concentration and amount could prevent errors involving
concentration or overdose. It explained that information regarding the
drug's route of administration could be helpful because, the comment
claimed, some drugs are not to be administered intravenously or as
major nerve anesthetics. Another comment focused on clotting factor
products and wanted the bar code for these products to contain (among
other things) the drug's brand name and number of units in a vial. The
comment recognized that encoding the number of units in a vial might be
difficult, but said that persons with hemophilia and other bleeding
disorders often carry vials, but not package boxes that contained the
vials, with them. It added that the additional information would
provide better information about the product's efficacy, i.e., whether
the patient achieved the expected hemostatic response given the units
administered.
Several comments asked that we require the bar code to indicate the
drug's waste disposal status under the Resource Conservation and
Recovery Act (RCRA). The comments explained that medical personnel
might not know that a particular drug, when it becomes a waste product,
is regulated under RCRA. Some comments suggested that the drug's waste
disposal status could be identified by adding another digit to the NDC
number. One comment suggested that we coordinate with the Environmental
Protection Agency to capture a drug's hazardous waste disposal status.
(Response) We decline to revise the rule as suggested by the
comments. The NDC number, under a bar code system, is a link to
information held in a database. For example, assume that the bar code
contains the drug's NDC number. The scanner reading the bar code would
transmit the NDC number to a computerized database, and that database
could be designed to generate information regarding the drug's names,
dose, concentration, route of administration, waste disposal status,
etc. In other words, the information sought by the comments could be
built into a database and does not have to be encoded in the bar code
itself and does not require changes to the NDC number.
3. Can Information Be Omitted From the Label to Accommodate the Bar
Code?
(Comment 37) Several comments suggested that we allow firms to
exclude certain information from their labels so that they could affix
a bar code. Some comments sought relief from the labeling requirements
at Sec. 201.10(i) (21 CFR 201.10(i)); that provision requires drug
labels to contain the drug's proprietary name, established name (if one
exists), an identifying lot or control number, and the manufacturer's,
packer's, labeler's, or distributor's name. One comment suggested
amending Sec. 201.25(c), regarding the bar code's placement on a
label, to state that any drug complying with the bar code requirement
is exempt from Sec. 201.10(i)(1)(iii) and (i)(1)(iv) (provisions
regarding the identifying lot number or control number and
manufacturer's, packer's, labeler's, or distributor's name) if the
packaging size is such that the required information is not easily
readable.
One comment sought clarification regarding a label requirement
imposed by another Federal agency. The comment claimed that the
Consumer Product Safety Commission (CPSC) has a regulation that
requires drug products labeled for hospital use only to also bear a
statement regarding use in households without young children.
Several comments focused on small labels. One comment stated that
excluding ``some'' label information would help print high quality bar
codes; the comment identified the manufacturer's or distributor's name
and address as information that it would exclude from a label.
Similarly, another comment would remove the manufacturer's name from
the label because, the comment explained, the manufacturer's name is on
the outer package and is part of the NDC number. Another comment stated
that the only way to create room for a bar code on a small label would
be to reduce font size, but the resulting print would be difficult to
read.
(Response) We decline to amend the rule as suggested by the
comments. In most cases, the information that the comments would remove
from the label is required by Federal law, so we are unable to provide
the relief sought by the comments. For example, section 502(b)(1) of
the act considers a drug to be misbranded if it is in package form and
its label does not contain ``the name and place of business of the
manufacturer, packer, or distributor.'' Section 502(b) of the act does
not authorize any exemptions from this requirement, so we cannot delete
such information from the label simply to accommodate a bar code.
Similarly, section 502(e)(1)(A)(i) of the act considers a drug to be
misbranded if its label does not bear the drug's established name, so
we cannot allow firms to exclude the drug's established name from the
label. Additionally, section 351(a)(1)(B) of the PHS Act requires the
package of a biological product to be marked with the product's proper
name, the name, address, and applicable license number of the product's
manufacturer, and the product's expiration date.
Furthermore, because the rule does not require lot number and
expiration date information to be encoded, we decline to allow firms to
remove the human-readable lot number and expiration date information
from the label.
[[Page 9136]]
As for the comment seeking clarification of CPSC requirements, such
matters are outside the scope of this rule and outside FDA's
jurisdiction.
D. Does the Rule Require a Specific Type of Bar Code? (Sec.
201.25(c)(1))
1. Should the Rule Require Linear Bar Codes?
Proposed Sec. 201.25(c)(1) would require the bar code to be a
linear bar code that meets EAN/UCC standards. The preamble to the March
2003 proposal discussed, in some detail, how we decided to propose the
use of linear bar codes and described the tension between trying to
create a bar code requirement that would enable hospitals to buy
scanning equipment with the confidence that their purchased equipment
would not be rendered obsolete by new technology and trying to create a
bar code requirement that offered some room for technological
innovation (see 68 FR 12500 at 12508 through 12510). We also invited
comment on whether we should consider the use of another symbol,
standard, or technology, either with or in place of a linear bar code,
the acceptance of that other symbol, standard, or technology among
parties that would be subject to the rule, and the ability of hospitals
to read or use other symbols, standards, or technologies (id. at 12510
and 12529).
(Comment 38) Many comments addressed the subject of linear bar
codes. Several comments indicated the rule should require the use of
linear bar codes because of their widespread use and because hospitals
that are currently printing and scanning bar codes might be unable to
upgrade their technology to support nonlinear technologies. One comment
stated that our decision to require linear bar codes was ``brilliant''
and that our logic was ``impeccable.'' Another comment said that linear
bar codes could be used as an initial requirement and that technology
currently installed in most hospitals cannot be upgraded to support
nonlinear technologies. The comment added that if we required nonlinear
bar codes, hospitals could face significant costs, and those hospitals
that had already implemented linear bar code systems would be
penalized. Another comment said that many applications of currently-
used linear bar code systems are appropriate for suppliers and end
users. The comment, which was submitted by a supply company for two
large, not-for-profit hospital alliances, added that it shared our
concern that ``technologies/standards not be so advanced that hospitals
are then unable to read and scan the bar codes,'' and it urged us to
evaluate and promote new and emerging technologies ``only as they
become more readily available, and easily embraced by end users.''
Another comment said we should require the bar code to meet certain
``attributes;'' the comment explained that this would provide some
flexibility (although it did not explain what the attributes would be
or what that flexibility was) while still ensuring a minimum standard.
The comment added that the standard should be one that does not require
hospitals to spend significant amounts of money to replace scanning
equipment that would otherwise be acceptable for use. Two comments
submitted by drug manufacturers expressed a similar opinion, stating
that we should allow firms to use any linear bar code symbology so that
firms could pick the symbology that best fits their needs.
One comment agreed with our proposal to require linear bar codes,
but asked whether this included multidimensional codes. The comment
claimed that multidimensional codes are several thinly-stacked linear
codes. It added that, while older bar code scanners might not be able
to read multidimensional codes, we should not be concerned about older
scanners because most hospitals would not have scanners (and therefore
would not need upgrades) or that hospitals with older scanners could
upgrade those scanners.
Most comments, however, argued against the use of linear bar codes
or asked us to encompass other technologies or to eliminate any
reference to linear bar codes in the final rule. Many comments claimed
that the rule would discourage or inhibit technological innovation,
although they differed as to their preferred alternatives to a linear
bar code. For example, one comment said laws and regulations should
encourage technological innovation, but did not explain why our
particular rule had to do so. Comments opposed to a linear bar code
requirement generally advocated the following alternatives:
[sbull] Two-dimensional symbologies, on the grounds that such
symbologies can be used on small packages, require less space compared
to linear bar codes, can encode more data than a linear bar code
(although the comments usually did not explain why more data capacity
was needed), or can be placed on solid dosage forms themselves. Some
comments specifically mentioned DataMatrix as a recommended symbology,
whereas others referred to symbols or systems created or marketed by
the firm who submitted the comment or to symbols that would be marketed
in addition to the two-dimensional symbology. Other comments suggested
using two-dimensional symbologies in conjunction with linear bar codes,
with the two-dimensional symbology encoding lot number and expiration
date information.
[sbull] The EAN/UCC system generally, on the grounds that the EAN/
UCC system is widely used for drug products, has defined data
structures, is used internationally, and would be less expensive
compared to a regulatory approach that imposed no standard. However,
other comments opposed the EAN/UCC system, declaring it to be
``obsolete,'' or declaring that selecting the EAN/UCC would serve no
purpose, would violate unspecified Federal laws, or would create a
``monopoly'' for the UCC. (We discuss comments on the EAN/UCC standard
and HIBCC standards in more detail in comment 41 of this document.)
[sbull] Radio frequency identification chips. Some comments
advocated the use of these chips and claimed that such chips could be
an alternative to or used with the bar code and can be ``highly
effective'' at identifying individuals and animals in a cost-effective
manner. One comment noted that we had mentioned the comparatively high
costs associated with radio frequency identification chips, but said we
should not reject the chips on cost grounds alone. It said the
pharmaceutical industry and health care providers should have the
flexibility to choose identification techniques that are the most
suited to a product or clinical setting. The comment added that if we
required the use of a particular technology, we would create a conflict
with our GMP principles because our GMP regulations do not require use
of a particular piece of equipment, and we would be creating a
disincentive for industry to develop more cost-effective identification
systems.
[sbull] No standard or symbology at all. These comments advocated
the use of ``open'' or ``machine-readable'' requirements so that market
forces would decide which technologies would be used. One comment added
that the use of nonlinear codes would make linear bar codes
technologically obsolete by the time the final rule became effective.
Another comment said we should require ``automatic identification''
instead of bar codes. Another comment suggested that manufacturers,
repackers, and relabelers be allowed to customize symbols to meet
customer needs, although the comment did agree that the NDC number
should be present.
[[Page 9137]]
Comments were also divided on scanner technology. Most comments
that addressed scanner technology declared scanner technology to be a
``non-issue'' because, they claimed, scanners can automatically
discriminate between linear bar codes and can be reprogrammed or
updated to read specific codes and even complex codes. One comment
stated that the adoption rate of two-dimensional image readers is
increasing and that such readers are becoming popular and less
expensive. Others declared that high-resolution scanners can read both
one- and two-dimensional symbologies and predicted that scanner
manufacturers and suppliers would become very attentive to customer
needs, so that scanner prices would fall. One comment said we should
not be concerned about hospital costs at all or not consider such costs
as limiting the industry's technological options; the comment argued
that our consumer safety mandate precludes financial considerations,
and claimed that the OTC drug industry ``rises to the financial
challenges presented by government regulations.'' The comment noted
that the rule does not require hospitals to buy scanners, so the
comment said, ``it seems irrational to tailor these requirements based
upon what hospitals may or may not do to ensure the safety of their
patients.''
In contrast, two comments indicated that technological limitations
do exist. One comment agreed that scanners can read different
symbologies, but said that printing technology, particularly with
respect to variable information (such as lot number and expiration
date), does not exist for high-speed, online printing. Another comment
said that technology currently installed in most hospitals cannot be
upgraded to support nonlinear symbologies; the comment said that if we
required nonlinear bar codes, hospitals could incur significant costs,
and those who had adopted bar code systems earlier would be
``penalized.''
(Response) The comments reflect the same array of differing
opinions that we encountered at the public meeting and described in the
preamble to the March 2003 proposal (see 68 FR 12500 at 12508 and
12509). As we noted in the preamble to the March 2003 proposal, there
are two principal, yet contradictory, themes. One theme advocates a
specific technology or standard to promote uniformity and to create the
conditions under which hospitals could invest confidently in their bar
code scanning equipment. The other theme advocates innovation so that
newer and perhaps better technologies might be adopted easily. Each
theme has its advantages, disadvantages, and assumptions. For example,
linear bar codes have the advantage of being a proven, established
technology that is easily recognized and easily used. They may also be
less expensive than newer, emerging technologies, and are capable of
encoding the NDC number. However, linear bar codes have several
disadvantages, too, as they offer limited opportunity for innovation
and may take up more label space than newer technologies. They also may
encode less data compared to other technologies. Thus, if we were to
require more data to be encoded on the packaging or labeling for any
other reason (such as to allow tracking and tracing of drug products
through the drug distribution system), a linear bar code might prove
too limiting.
In contrast, a position that advocates innovation, with or without
identifying a particular technology, has the potential advantages of
encoding more data in a smaller space and perhaps accommodating new
technologies as they arise without any additional rulemaking. The
disadvantages, however, would include the possibilities that new,
emerging technologies may be unproven, not widely accepted, or present
unknown risks. For example, current radio frequency identification
chips may have less reliable read rates than a linear bar code, and we
do not know whether the equipment needed to detect such chips will
present EMI issues for other medical devices in the hospital
environment. As another example, failure to prescribe a specific
technology might deter hospitals and other potential users from buying
scanning or reading equipment because there would be no assurance that
drug manufacturers would use the same or compatible technologies. As
yet another example, requiring ``automatic identification'' of the NDC
number could lead some manufacturers to develop their own, exclusive
identifiers, and individuals might not recognize those identifiers,
particularly if those identifiers are very small, not widely used, or
placed under the product's label. Thus, if we were to revise the rule
to promote innovation, with or without identifying a particular
technology, hospitals and other potential users might be reluctant to
purchase scanning or reading equipment, and the rule's benefits would
not be fully realized.
After reviewing the comments, we have decided to retain the linear
bar code requirement, but will consider revising the rule to
accommodate newer technologies as they become more mature and
established. Our decision to retain the linear bar code requirement
rests largely on the following considerations:
[sbull] Linear bar codes are an established and proven technology.
They are widely used in many sectors, and we are unaware of any
significant problems associated with linear bar codes and their
scanners. In contrast, new technologies, such as the radio frequency
identification chip, are still being developed or refined, and we do
not know, at this time, whether or when those new technologies have or
will have widespread acceptance or become standardized, or whether the
equipment used to detect or read those new technologies will present
any safety or regulatory issues. For example, we do not know whether
the equipment needed to detect radio frequency identification chips
will present EMI or EMC issues for other devices that are used inside
hospitals.
[sbull] Linear bar codes are easily recognized and easily used or
applied. Most individuals can identify a linear bar code quickly and
can scan it without much training. For example, various grocery store
chains have installed ``self-scan'' stations where consumers scan the
bar codes on their purchases themselves; the consumers are able to do
this with little or no training. In contrast, two-dimensional
symbologies come in different shapes and sizes, and they can be smaller
than linear bar codes. As a result, individuals might not recognize
two-dimensional symbologies as quickly and might not even recognize
them as encoding data. If the rule allowed any ``automatic
identification'' technology, then the risk that individuals might not
recognize the technology or lack the proper equipment to read that
technology would increase.
[sbull] Although most comments opposed the proposed linear bar code
requirement, they failed to agree on alternative technologies. For
example, some comments supported two-dimensional codes, particularly
DataMatrix, but others supported radio frequency identification chips.
Some comments endorsed products that a specific company had created,
while others suggested that we simply require ``automatic
identification'' technology. We believe that if the rule is to result
in any significant benefits, it must specify a technology so that
hospitals and other interested parties can purchase the correct
scanning or reading equipment. We do not agree with the comment that
claimed it would be ``irrational to tailor these requirements based
upon what hospitals may or may
[[Page 9138]]
not do.'' The rule's expected benefits are realized only if hospitals
accept and use bar code technology. Therefore, we consider it prudent
to consider what hospitals may or may not do when prescribing a
regulation that is intended to benefit hospitals and their patients.
We also disagree that the rule prevents or otherwise hinders
innovation. Automatic identification technologies are useful in other
contexts, such as retail environments, and are used on many different
consumer goods. In other words, the fact that the final rule requires
the use of linear bar codes does not mean that all progress on other
automatic identification technologies must stop, nor does it mean that
innovative automatic identification technologies cannot be used on
other products.
We recognize that other technologies may be able to encode more
data in less space compared to linear bar codes. These arguments do not
address the fact that this rule only requires firms to encode one piece
of datum (the NDC number). A linear bar code is capable of encoding the
10-digit NDC number. Furthermore, such arguments do not address the
principles of regulation that we must observe pursuant to Executive
Order 12866; under section 1(b)(5), we are to design our regulations
``in the most cost-effective manner to achieve the regulatory
objective'' and to consider ``incentives for innovation, consistency,
predictability, the costs of enforcement and compliance * * *
flexibility, distributive impacts, and equity.'' Applying that
principle to this rule, we believe that a linear bar code is the most
``cost-effective'' device for encoding the NDC number particularly
when, as the comments suggest, the alternative would be to specify no
technology at all or encompass technologies whose data encoding
capacities far exceed the information required. A linear bar code
requirement offers consistency, predictability, and lower costs of
enforcement and compliance compared to technologies whose acceptance
and reliability may be uncertain, or compared to a requirement that
offered no criteria upon which hospitals could rely.
We realize that, in October 2003, we issued a report entitled ``FDA
Counterfeit Drug Task Force Interim Report'' (see Food and Drug
Administration Press Release, ``FDA Anti-Counterfeiting Task Force
Interim Report Focuses on High-Tech Weapons and Other New Promising
Measures,'' dated October 2, 2003). This report discussed, among other
things, anti-counterfeiting technologies, including ``track and trace
technologies.'' The final rule does not affect the development or
adoption of such ``track and trace technologies.'' Moreover, the final
rule's underlying purpose (prevention of medication errors) is distinct
from the purposes underlying anti-counterfeiting efforts (preventing
the introduction of counterfeit drugs, facilitating identification of
counterfeit drugs, minimizing consumer risk and exposure to counterfeit
drugs, and avoidance of unnecessary costs on the prescription drug
system). For example, in the medication error prevention context, the
goal is to ensure that the right drug, in the right dose and right
route of administration, is given to the right patient at the right
time, so requiring a bar code on a unit-dose product is both necessary
and appropriate, but information regarding the drug's origin (i.e.,
place of manufacture) is not essential. In contrast, for track and
trace purposes, the goal is to ensure that individual products can be
followed through the drug distribution system from the point of
manufacture, but this goal does not necessarily extend down to the
unit-dose package level.
Nevertheless, we reiterate that we will consider revising the rule
to accommodate new technologies. As we explain in more detail in
section II.I of this document, we expect compliance with the bar code
requirement within 2 years after the final rule's effective date. At
that time, we will begin examining other automatic identification
technologies to determine whether we should amend the rule to allow the
use of such technologies. We intend to conduct our examination in a
public and transparent manner, with opportunity for public
participation and comment. This could be done, for example, through a
public meeting, a document inviting comment, an advance notice of
proposed rulemaking, or other public forum. We will decide on the
appropriate public forum at a future time.
Regarding the EAN/UCC system, the final rule allows the use of
either EAN/UCC or HIBCC standards. We discuss the reasons behind this
change at comment 41 of this document.
As for the comment concerning multidimensional codes, we note that
there is disagreement whether certain symbologies are two-dimensional
or simply a series of thin, one-dimensional codes stacked upon each
other. Therefore, we cannot say, as a general matter, whether
multidimensional codes are ``linear bar codes'' within this final rule
because we cannot be sure that all parties share the same
interpretation as to what constitutes a multidimensional code.
Nevertheless, if a firm believes that a particular type of thin, one-
dimensional codes that are stacked upon each other is still a ``linear
bar code'' and intends to use that stacked code, that stacked code must
be capable of being read clearly by scanning or reading equipment in
the same manner as conventional linear bar codes to fall within Sec.
201.25(c).
Finally, regarding one comment's claim that a linear bar code
requirement would create a conflict with our GMP principles and will
create a disincentive for industry development of other identification
systems, we disagree. The linear bar code is not a manufacturing
process; it is instead the visual representation of information. To use
an analogy, we require labels to use the English language except where
the article is to be distributed solely in the Commonwealth of Puerto
Rico or in a U.S. Territory where the predominant language is not
English (see 21 CFR 201.15(c)(1)). The English word is the visual
representation of the information. If we had to accept any language on
product labels (using the comment's GMP theory), then those using the
product might not understand the information if they did not know the
language used on the label. Furthermore, as we stated earlier in this
response, the linear bar code requirement does not prevent anyone from
developing innovative automatic identification technologies for any
other industry for any other reason, and we will consider whether to
accept other automatic identification technologies as they become more
mature and accepted.
(Comment 39) One comment claimed it would be ``legally
indefensible'' for hospitals to not choose two-dimensional systems if
firms encoded lot number and expiration date information; the same
comment also declared that some hospitals have their suppliers use two-
dimensional codes so requiring linear bar codes would ``force'' those
hospitals to ``abandon'' their systems because their suppliers would
have to convert to linear bar codes.
(Response) We disagree with the comment. The only required piece of
encoded data is the NDC number; hospitals are free to decide which
scanning systems are best for them and are also free to decide whether
to take advantage of any voluntarily-encoded lot number and expiration
date information. We reiterate that we were unable to demonstrate that
the benefits of encoding lot number and expiration date information
would exceed the costs (see 68 FR 12500 at 12528 and 12529). Therefore,
we disagree that it would be ``legally indefensible'' for hospitals to
choose linear bar code scanners that are
[[Page 9139]]
perfectly capable of reading the NDC number contained in a linear bar
code.
We also disagree that the final rule ``forces'' hospitals to
abandon systems that they may have adopted before this rulemaking. If a
two-dimensional scanning system is capable of reading both one- and
two-dimensional symbologies, then the system should still be able to
read the NDC number contained in the one-dimensional, linear bar code.
We acknowledge, however, that if a hospital had insisted that its
suppliers use only two-dimensional codes, the final rule's linear bar
code requirement means that those suppliers must use a linear bar code
to encode the NDC number. If the supplier wishes, it can encode lot
number and expiration date information voluntarily using any symbology
or automatic identification technology, so if the hospital insisted
that the supplier use two-dimensional symbologies to encode lot number
and expiration date information, the hospital's two-dimensional
scanning system would still be useful.
(Comment 40) One comment asked whether ``linear bar code'' meant to
include a specific symbology called ``RSS-14 stacked.'' The comment
explained that RSS-14 stacked ``is essentially the same thing as RSS-
14, except that it is printed in two rows in order to make it narrower
at the expense of height.'' The comment said that a scanner can easily
decode an RSS-14 stacked symbol, but added that, ``I hope you get input
from Scanner manufacturers on this point.''
(Response) The comment is correct that RSS-14 stacked is a variant
of the RSS-14 linear bar code and that it consists of two rows of two
segments each. A ``separator pattern'' is printed between the two rows
to eliminate cross-row scanning errors.
We believe that RSS-14 stacked symbology can be read by linear bar
code scanners, although the scanners would have to be programmed to
read RSS-14 codes and, depending on the scanner, may require more time
to read a stacked code. Thus, we would consider RSS-14 stacked to be a
linear bar code within the rule.
(Comment 41) Some comments questioned or criticized the proposed
rule's reference to UCC standards. One comment said that ``standards''
refers to the data structure and not to symbologies. The comment asked
if we meant that the linear bar code had to be one used by the UCC and
that the NDC number had to be in a UCC data format.
One comment, submitted by a medical device trade association,
supported use of either the EAN.UCC or HIBCC standards. The comment
explained that most medical device manufacturers who are voluntarily
labeling their products use the UPN system, and the EAN.UCC and HIBCC
standards comprise the UPN system. HIBCC also recommended that the
final rule not rely solely on EAN.UCC standards; it acknowledged that
EAN.UCC standards are ``by far the most prevalent in pharmaceutical
labeling,'' but suggested that alphanumeric coding (which HIBCC
standards use) ``allows for literally-encoded information that is
inherently safer'' (than numeric coding alone).
HIBCC, as well as another comment, also stated that requiring
EAN.UCC standards would create a monopolistic environment that might
inhibit the development and implementation of technologies outside the
EAN.UCC's purview. The other comment claimed that the UCC is not a
standards body, has proprietary interests, provides sponsored bar codes
to members as part of a variable annual fee, and that the linear bar
codes that would be used on hospital patient identification bands are
not EAN.UCC codes, so that there would be no benefit in selecting
EAN.UCC standards. The comment protested that the EAN.UCC standard
requirement would compel manufacturers to join the UCC even though
adequate bar codes are available in the public domain, and declared
that the rule would violate unnamed Federal laws by referring to
EAN.UCC standards.
Another comment advocated use of both EAN.UCC and HIBCC standards.
It suggested that this would encourage the adoption of automatic
identification technologies as they develop, although the comment also
recommended that linear bar codes be the initial technological
requirement so that hospitals that have bar code systems are not
disadvantaged.
(Response) Proposed Sec. 201.25(c)(1)'s reference to UCC.EAN
``standards'' was intended to mean that the linear bar code had to be
one that the UCC recognized and the data standard had to be in a
UCC.EAN format (see 68 FR 12500 at 12509).
However, after considering the comments, we will interpret Sec.
201.25(c)(1) as meaning that the linear bar code can be in any format,
and the final rule gives firms the option of using EAN.UCC or HIBCC
data standards. (We have revised the rule to refer to ``EAN.UCC''
standards, rather than ``UCC/EAN'' standards, in order to use the
commonly-recognized abbreviation.) In other words, the manner in which
the NDC number is encoded may be in an EAN.UCC or HIBCC format, and the
manner in which the NDC number is visually presented must be a linear
bar code. We have decided to give firms the option of using HIBCC data
formats because HIBCC is a widely-recognized, nonprofit standards
development organization whose standards, like EAN.UCC standards, are
accredited by ANSI, and, as the comments suggested, allowing the use of
either EAN.UCC or HIBCC standards may encourage further development and
adoption of other automatic identification technologies. We also cannot
preclude the possibility that some firms may prefer using alphanumeric
code formats, which HIBCC uses, although we do not express any opinion
as to whether alphanumeric codes are ``safer'' than numeric ones.
Allowing the use of HIBCC standards will also prevent the creation
of the ``monopolistic'' environment that some comments feared. Although
one comment claimed that the UCC is not a standards organization and
implied that the UCC will benefit financially if we require bar codes
to use EAN.UCC standards, our information is that the UCC is a not-for-
profit standards organization.
We strongly recommend that manufacturers, repackers, relabelers,
and private label distributors who are subject to the bar code
requirement carefully consider their linear bar code symbology and
standard choices. (The EAN.UCC or HIBCC standard may also determine the
type of linear bar code symbology that is used.) The bar code's ability
to affect medication error rates depends largely on the ability of
hospitals to scan and interpret the data in the bar code. So, for
example, choosing a commonly-used linear bar code symbology in a
standard that scanners can easily read will have a greater impact on
patient safety compared to a unique bar code symbology that few (if
any) scanners are programmed to read.
2. Should the Rule Impose Any Conditions on 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 require the bar code to remain intact
under normal conditions of use. The preamble to the March 2003 proposal
explained that some manufacturers had placed bar codes at locations
where the bar codes are destroyed, damaged, or otherwise rendered
useless (see 68 FR 12500 at 12510), so the proposal was intended to
help ensure that the bar codes could be read correctly.
[[Page 9140]]
(Comment 42) One comment asked whether our reference to ``blank
space'' referred to ``quiet zones'' in a bar code. A ``quiet zone'' in
a bar code usually refers to a blank space that appears before the
first bar and after the last bar.
(Response) Section 201.25(c)(1)(i)'s reference to ``blank space''
means that the linear bar code must be surrounded, on all four sides,
by an area where no print occurs. This is slightly different from the
``quiet zone'' in a bar code because Sec. 201.25(c)(1)(i)'s ``blank
space'' would include areas that are above and below the bars.
We note, however, that we have previously indicated that we would
not object if firms voluntarily encoded lot number and expiration date
information (see 68 FR 12500 at 12508) and that such voluntarily-
encoded information might appear in another machine-readable format
with the linear bar code. For example, a firm might decide to use a
composite code, where the NDC number is encoded in a linear bar code
and the lot number and expiration date information is encoded in a two-
dimensional code, with the two-dimensional component placed immediately
above the linear bar code. If a firm elects to encode lot number and
expiration date information voluntarily, and the voluntarily-encoded
information is immediately adjacent to the required linear bar code, we
will interpret the ``blank space'' requirement as applying to the
entire composite code. In other words, we would not interpret the
``blank space'' requirement as preventing firms from using composite
codes.
(Comment 43) One comment disagreed with proposed Sec.
201.25(c)(1)(ii) insofar as it would require the bar code to remain
intact under normal conditions of use. The comment said manufacturers
should be allowed to print bar codes across perforations on blister
packs as long as this did not affect the ability of the bar code to be
scanned correctly. The comment said that printing the bar code across
perforations would leave more space on the drug's label for other
required information.
In contrast, another comment, submitted by a hospital, stated that
the hospital's use of manufacturers' bar codes suggests that those
codes sometimes fail to maintain their integrity. The comment said that
linear lines become jagged, the markings degrade on the medium on which
they are placed, or the bar code is placed in such a manner that it
becomes unusable at the unit-dose level. The comment added that ``it
has been our experience that the bar code does not always agree with
the written description of the product,'' and it said that we should
continue to require the bar code to remain intact under normal
conditions of use, particularly with respect to unit-dose packages.
(Response) Section 201.25(c)(1)(ii) requires the bar code to remain
intact under normal conditions of use. Our fundamental goal is to
reduce or prevent medication errors, and that goal is best served when
the bar code remains intact under normal conditions of use. As we
stated in the preamble to the March 2003 proposal, partial or
incomplete bar codes can provide misleading information or not be read
at all by scanners (see 68 FR 12500 at 12510); these potential problems
are avoided if the bar code remains intact under normal conditions of
use.
We realize that label space can be limited due to other information
that our statutes or regulations require to be on a drug's label, but
there may be alternatives to printing the bar code across perforations.
For example, the final rule does not require the bar code to appear on
the same surface as other label information. Likewise, the final rule
does not prevent a manufacturer, repacker, relabeler, or private label
distributor from revising its packaging to accommodate more label
information. Thus, there may be other approaches that would ensure that
the bar code remains intact under normal conditions of use.
E. Where Does the Bar Code Go? (Sec. 201.25(c)(2))
Proposed Sec. 201.25(c)(2) would have the bar code appear on the
drug's label as defined by section 201(k) of the act. The preamble to
the March 2003 proposal explained that 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 proposing to require 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 (see 68 FR 12500 at 12511).
(Comment 44) One comment asked that we require the bar code to ``be
oriented on the label in such a way as to promote visual reading of the
drug, strength, etc. while scanning the bar code.'' The comment
explained that positioning the bar code in any other way would make
users dependent on the scanning process instead of reading the drug's
label. The comment said the only exception to its suggested placement
restriction should be when the label does not support the bar code
format, ``with the burden on the manufacturer to justify the decision
not to orient the label contents in this fashion.''
(Response) We decline to revise the rule as suggested by the
comment. By not specifying how or where the bar code must appear, the
rule gives firms considerable flexibility in designing their labels to
include the bar code and any other information required by law or FDA
regulations.
Although we recognize the comment's concern about relying too much
on technology, we disagree with the comment's assumption that users
will become dependent on the bar code and will stop reading drug
labels. The human-readable information on a drug's label goes far
beyond the drug's NDC number. For example, under Sec. 201.100(d)(1), a
drug's labeling, whether or not it is on or within a package from which
the drug is to be dispensed, must contain adequate information for the
drug's use, including any relevant warnings, hazards,
contraindications, side effects, and precautions; the drug's NDC number
will not provide such information. As another example, section
502(b)(1) of the act declares a drug to be misbranded if its label does
not contain the name and place of business of the manufacturer, packer,
or distributor, while section 502(e)(1)(A) declares a product to be
misbranded if its label does not contain the drug's established name,
quantity or proportion of each active ingredient. In short, the bar
code, and the NDC number contained in the bar code, act more as a link
between the drug, the patient, and the patient's drug regimen and do
not act as a surrogate for the drug's label.
(Comment 45) One comment focused on products that are individually
packaged in a tray or pouch and are considered sterile within the tray
or pouch. The comment said we should allow the bar code to be placed on
the tray or pouch because the drug is supposed to remain sterile and
not be removed from the tray or pouch until the time the drug is
administered.
(Response) We decline to revise the rule as suggested by the
comment. By requiring the bar code to appear on the
[[Page 9141]]
product's ``label,'' Sec. 201.25(c)(2) should result in a bar code on
the immediate container label and the outer wrapper label. We are aware
that, despite labeling instructions to the contrary, individuals might
remove the outer wrapper and administer the drug product at a later
time. Therefore, a bar code on the immediate container label may help
prevent product mixups and medication errors that may occur when the
drug product is removed from the outer wrapper and not used
immediately.
As for the comment's drug sterility concern, we are not aware of
any reason why including a bar code on the immediate container label as
well as on the outer wrapper would adversely impact drug product
sterility.
(Comment 46) Some comments focused on drug packaging. Some comments
asked us to require bar codes on every unit-of-use package so that
hospitals do not need to repack drugs. Several comments said we should
require single dose packaging to make bar coding easier and accurate
dosages more feasible. A different comment said that we should require
manufacturers to have unit-dose packaging before they can market a
drug. Other comments expressed concern that a bar code requirement
might lead manufacturers to stop unit-dose or unit-of-use packaging or
insisted that manufacturers use such packaging. Another comment asked
us to require bar codes on ``all packaging'' as soon as possible, but a
different comment agreed that we should require bar codes on unit-dose
packages.
(Response) Regarding unit-of-use packages, the rule does require
bar codes on such packages because Sec. 201.25(c)(2) states that the
bar code must appear on the drug's label. Section 201(k) of the act
defines ``label,'' in part, as ``a display of written, printed, or
graphic matter upon the immediate container of any article.'' Thus,
because a unit-of-use package would be the immediate container for a
drug, the unit-of-use package must bear a label and, under Sec.
201.25(c)(2), have a bar code.
We decline to require manufacturers to use unit-dose or unit-of-use
packaging. We recognize that concerns may exist over the rule's impact
on such packaging, and we even raised the issue ourselves in our public
meeting (see 67 FR 41360 at 41361). However, as we noted in the
preamble to the March 2003 proposal, our industry contacts suggest that
the costs associated with a bar code requirement ``would not be great
enough to significantly impact the market'' and that ``the expected
reduction in hospital over-packaging could increase market demand for
unit-dose products despite the cost difference'' (see 68 FR 12500 at
12526). In other words, our industry contacts suggest that unit-of-use
or unit-dose packaging decisions depend more on market demand than on
bar code costs.
We also decline to require bar codes on ``all packaging.'' The
preamble to the March 2003 proposal explained that requiring every
package to bear a bar code would result in too many packages being bar
coded regardless of the potential impact--or absence of impact--on
medication errors. For example, we explained that requiring bar codes
on every package would mean that a shipping container would have a bar
code, yet no hospital would dispense a drug directly from a shipping
container to a patient (see 68 FR 12500 at 12511). We maintain that
requiring bar codes on all packages would not be helpful insofar as
medication errors are concerned.
(Comment 47) One comment said that medicated creams and ointments
can now be reduced from multidose tubes to single dose units and that
some drugs have specific dosage requirements that further support the
use of single dose packaging to mitigate dosing errors. The comment
asked what is being done to convert packaging of semi-solids into ``the
needed single dose units.''
(Response) Issues regarding the production of unit-dose packaging,
regardless of whether the drug is a liquid, cream, or solid, are
outside the scope of this rule.
(Comment 48) One comment discussed how bar codes can be imprinted
on pills. It described a system that uses images of the drug on
medication schedules, prints bar codes on the drugs themselves, and
uses two-dimensional bar codes with a ``human recognizable icon or
symbol'' that identifies the ``general type of pill.''
Another comment said we should consider technologies that allow
one- or two-dimensional bar codes to be printed on color film coated
tablets and other solid oral dosage forms. It added that covert marking
systems could also be used to address drug counterfeiting concerns, and
printing codes on the drugs themselves could reduce unit-dose packaging
requirements.
(Response) We decline to allow the bar codes to be printed on
tablets and other solid oral dosage forms. As we stated in our response
to comment 3 in section II.B.1 of this document, 21 CFR part 206
requires imprinting on solid oral dosage forms. The imprint was
designed to help identify solid oral dosage forms, particularly in
emergency situations, and to help consumers and health care
professionals identify drugs (see 58 FR 47948; 21 CFR part 206). If we
allowed the bar code to be imprinted directly on a pill, the bar code
might interfere with that drug's imprint and could force health care
professionals and hospitals to consult two different databases (one on
drug imprint codes and another on bar codes) to determine which drug
they had before them.
Imprinting a bar code on a drug may also raise drug stability
issues or affect a drug's dissolution rate. Imprinting bar codes on
tablets has other practical limitations; for example, the same
imprinting approach cannot be used for drugs that are in liquid,
gaseous, or semi-solid form.
As for covert marking systems and counterfeiting concerns, such
matters are outside the scope of this rule.
F. Must Blood and Blood Components Bear ``Machine-Readable''
Information? (Sec. 606.121(c)(13))
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
proposed rule would amend Sec. 606.121(c)(13) to require the use of
``machine-readable information'' in a format approved by the Director
of the Center for Biologics Evaluation and Research (CBER) (the CBER
Director). The CBER Director would 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 PHS Act are subject to
the machine-readable information requirement;
[sbull] State that blood and blood components intended for
transfusion are subject to the machine-readable information
requirement;
[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;
[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
[[Page 9142]]
machine-readable information can be read correctly, and remain intact
under normal conditions of use; and
[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. As the preamble to the proposed
rule explained, unlike the situation for other drugs, there is already
substantial use of bar codes, notably ABC Codabar and ISBT 128, for
blood and blood components (see 68 FR 12500 at 12512).
The preamble to the proposed rule invited comment on whether we
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 (id.). We also invited
comment on whether a ``machine-readable information'' approach was
feasible or whether we should require the use of EAN.UCC standards for
blood and blood components.
(Comment 49) Many comments urged us to require the use of ISBT 128
rather than ``machine-readable information.'' The comments referred to
ISBT 128's international acceptance, ``negligible'' licensing and
registration costs, superiority to Codabar, and acceptance by FDA,
community blood centers, hospital blood banks, and other parties. Some
comments pointed out that ISBT 128 is a data standard rather than a
specific bar code; thus, to these comments, requiring ISBT 128 would
cover newer machine-readable technologies, including two-dimensional
symbols and radio frequency identification chips. One comment said that
a failure to require ISBT 128 would hinder software development because
software could use the identifiers and check digits in ISBT 128.
Other comments opposed requiring the use of ISBT 128 or suggested a
different standard. One comment said that requiring ISBT 128 would
force FDA to engage in new rulemaking if we decided that a new
technology should be adopted. The comment did state, however, that if a
single standard must be developed, it would support ISBT 128. Another
comment, submitted by the UCC, said that EAN.UCC standards are used in
commercial packages for shipping and receiving blood products; the
comment said that if the blood products community requested it, the UCC
would support creating bar code guidelines for blood products based on
the EAN.UCC system. The comment added that Japan uses the EAN.UCC
system for its blood components. Similarly, another comment said that
the bar codes for blood components should be the same as those used on
prescription and OTC drug products because pharmacies distribute blood
components and nurses administer them.
(Response) The final rule retains the ``machine-readable
information'' language with a clarification that the format, and not
the actual information, must be approved by the CBER Director. This
will enable Sec. 606.121(c)(13) to accommodate changes in machine-
readable technologies. For example, FDA recognized the use of Codabar
(a specific bar code symbology) in 1985, and, in 2000, accepted the use
of ISBT 128, version 1.2.0. More importantly, unlike the situation for
other prescription drugs, there is already substantial consensus on the
use of machine-readable symbols on blood and blood component labels. If
we were to amend the rule to require the use of ISBT 128, we would
ensure a uniform bar coding standard for blood and blood components and
be consistent with the existing international standard, but we would
also have to engage in new rulemaking if the international consensus
standard changed to adopt a new symbology, standard, or technology. We
believe that relying on an international consensus standard and
requiring ``machine-readable'' information in a format approved by the
CBER Director allows us to maintain uniformity in the symbologies or
technologies used and accommodate new technologies in the future. We
will announce, through guidance documents, our thinking and
recommendations about acceptable technologies. In deciding whether a
particular technology is acceptable for blood and blood component
container labels, we will review the technology to ensure that the
minimum requirements are met regarding the accuracy of the required
labeling information, spacing, and conditions of use. We anticipate
that the blood industry will standardize encoded machine-readable
information and reading equipment, using our guidances to minimize, to
the greatest extent possible, the need for ``country-specific''
software and the high cost associated with software development and
maintenance.
We also decline to require the use of EAN.UCC standards on blood
and blood component container labels. The blood industry currently uses
a machine-readable code that does not meet EAN.UCC standards. If an
EAN.UCC standard were implemented, it would require an overhaul of the
United States blood industry and the international blood industry
(because the resulting standard would depart from ISBT 128). We believe
such an impact to be unnecessary given our understanding that bar code
scanners can be programmed to recognize different symbologies.
Additionally, on our own initiative, we have revised Sec.
606.121(c)(13)(i) to replace the word ``repackage'' with ''repack.''
``Repack'' is the preferred term to describe the act of putting a
product into a different container.
(Comment 50) One comment said that the type of bar code was not as
important as the underlying information contained in the code. The
comment wanted to be able to track lot or donation numbers, the
manufacturer's license number, country code, information about the
blood group, product type, any modifications or special information,
and dosage.
(Response) Section 606.121(c)(13)(iii) requires the machine-
readable information for blood and blood components to contain, at a
minimum,
[sbull] A unique facility identifier;
[sbull] lot number relating to the donor;
[sbull] product code; and
[sbull] ABO and Rh of the donor.
Thus, some information sought by the comment would already be
required. Other pieces of information are also covered under ISBT 128.
For example, ISBT 128 contains a ``donation identification number;''
this number can identify the country/collection facility, the year the
donation was made, and a serial number associated with the donation.
ISBT 128 also has an optional ``special testing'' field to convey the
results of special or additional testing.
Although the comment also mentioned ``dosage'' information, dosage
is not normally an issue for blood and blood components, so we decline
to require dosage information as part of the machine-readable
information for blood and blood components.
(Comment 51) The preamble to the proposed rule asked how the rule
might affect hospitals where patients receive blood or blood
components, particularly with respect to a hospital's decision to
purchase a machine reader for blood and blood component codes and the
linear bar codes on drugs and certain OTC drug products (see 68 FR
12500 at 12529).
We received several different opinions on this subject. One comment
said that if hospitals had to change their blood and blood component
coding systems to use EAN.UCC standards, it
[[Page 9143]]
would take ``years'' to develop data structures, change transfusion
software, and implement the changes, and this would be a setback for
industry standardization. In contrast, another comment, submitted by
the UCC, said there would be little or no effect on hospitals because
scanners can read multiple codes, and so use of the EAN.UCC system on
all products would simplify software development and maintenance. It
added that we should examine the cost of maintaining two standards
(EAN.UCC and ISBT 128) within the global marketplace and any potential
disruption if ISBT 128 were abandoned in favor of the EAN.UCC system.
Three comments said that ISBT 128 could be easily compatible with
any bar code system. The comments said that software systems developed
for blood centers and many hospital blood banks are already ``ISBT 128
ready.''
(Response) As we stated in our response to comment 49 in section
II. F of this document, we decline to require the use of EAN.UCC
standards on blood and blood component container labels. We agree with
those comments stating that bar code scanners can be programmed to
recognize ISBT 128 in addition to other symbologies, and requiring the
blood industry to convert to EAN.UCC standards would affect efforts to
adopt uniform standards within the United States and the international
blood industry.
(Comment 52) One comment asked if ``blood component`` included
intravenous immune globulin (IGIV) and albumin. The comment felt that
ISBT 128 and the data that would be encoded for blood components are
inappropriate for IGIV and albumin. The comment added that IGIV and
albumin are distributed by pharmacies and administered by nurses, so
they should be treated like other drugs.
(Response) IGIV and albumin are therapeutic products that would be
subject to the bar code requirement for drug products through Sec.
610.67. In other words, IGIV and albumin are not subject to the bar
code requirements for blood and blood components, but they are subject
to the bar code requirements for drug products.
(Comment 53) One comment asked us to clarify whether source plasma
used to manufacture plasma-derived therapies is subject to a bar code
requirement. The comment said that Source Plasma, when not intended for
use as a final dosage product, should not be subject to the bar code
requirement.
(Response) Source Plasma is not subject to the bar code
requirements. As stated in Sec. 606.121(a), the container label
requirements for blood and blood components are not applicable to
Source Plasma. The machine-readable requirements apply only to blood
and blood components intended for transfusion (see Sec.
606.121(c)(13)). Because Source Plasma is intended as source material
for further manufacturing use (see Sec. 640.60 (21 CFR 640.60)) and is
not intended for transfusion, Source Plasma does not fall within the
bar code requirement.
(Comment 54) Two comments suggested that we require bar codes on
certain medical devices such as blood bags, filters, and apheresis
kits.
(Response) We decline to adopt the comments' suggestion. As we
stated in our response to comment 29 above, medical devices present
different regulatory issues and challenges compared to drugs, and,
unlike drugs, medical devices do not have a unique, reliable
identifying number. Consequently, we continue to omit medical devices
from the final rule.
G. Must Biological Products Have a Bar Code? (Sec. 610.67)
The proposed rule would require biological products (other than
devices, blood, and blood components intended for transfusion) to
comply with the bar code requirements at Sec. 201.25.
We received no comments that were specific to Sec. 610.67.
However, on our own initiative, we have revised Sec. 610.67 to clarify
that the bar code requirement at Sec. 201.25 does not apply to devices
that are regulated by CBER (such as devices that are the subject to the
biologics licensing application (BLA), premarket approval (PMA)
application, or 510(k) requirements), or to blood and blood components
intended for transfusion. As we explained in section II.B.5 of this
document, devices are exempt from the bar code requirements, whereas
blood and blood components intended for transfusion are subject to the
``machine-readable'' information requirements at Sec. 606.121(c)(13).
H. What Other Comments Did We Receive?
Many comments were not directed at any particular provision but
instead asked procedural questions (such as how bar code information
should be reported to us), asked us to create more documents
(particularly with respect to bar code quality), or discussed whether
we should keep these regulations in effect after bar coding, for
medication error purposes, became widespread. We discuss these comments
in this section.
1. Comments Seeking More Action by FDA
(Comment 55) The preamble to the proposed rule stated that firms
whose drug products are already approved or marketed could notify us
about the addition of a bar code to their product labels through an
annual report (see 68 FR 12500 at 12512).
One comment disagreed, stating that we should apply standard
reporting requirements for such label changes. It said that annual
reports are not sufficient to provide the maximum benefit to those
using the bar codes. It suggested that certain third-party databases
might be able to create new data fields that provide information on
drugs and drug packaging on a ``very frequent'' basis.
(Response) The comment misunderstood our position. When we referred
to the annual report, we meant that firms whose drug products have
already been approved would simply notify us that they had added a bar
code to their package labels; that notification to FDA could occur on
an annual basis. Annual reports are commonly used to report minor label
changes to us.
As for transferring information regarding NDC numbers to databases
(which bar code scanners and hospital computers might consult in order
to decipher the bar code), we routinely make such information
available. Moreover, as we stated in the preamble to the proposed rule,
we are collaborating 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 (see 68
FR 12500 at 12511). This collaboration contemplates daily updates of
information and, as a result, constant updates of new NDC numbers.
In short, we intend to make NDC number information available to
databases constantly. We do not intend to release NDC number
information only once per year.
(Comment 56) Several comments asked us to draft additional
documents. For example, one comment said we should issue a guidance
document to instruct hospitals and others to use the same bar coding
methods and principles that manufacturers use if hospitals and other
entities decide to bar code or to repack drugs. Another comment
suggested that we should issue a guidance document advising firms on
how to encode lot number and expiration date information if they choose
to do so voluntarily.
(Response) We decline to create the guidance documents that the
comments
[[Page 9144]]
sought. In general, hospitals are exempt from the bar code
requirements, and so we believe that our resources are better spent
developing regulatory materials, when appropriate, for regulated
entities. Additionally, we lack sufficient expertise to advise
interested parties on bar coding methods and equipment, but we believe
there are sufficient documents and standards issued by third parties
such that, at this time, we do not need to generate such documents or
standards ourselves.
(Comment 57) One comment asked us to provide expedited review of
pre-market submissions for blood establishment computer software. The
comment said that software users must validate software upgrades before
such improvements are applied to patient care, but said that validation
would require extensive time.
(Response) We decline, in this rulemaking, to provide for expedited
review of premarket submissions for blood establishment computer
software. The current rulemaking is aimed at describing the bar coding
requirements for drugs and similar ``machine-readable'' information
requirements for blood and blood components. In the absence of any
submissions, it would be both premature and beyond the scope of the
current effort to address requests for expedited PMA reviews for blood
establishment software. However, in this regard, we have made available
a ``Reviewer Guidance for a Premarket Notification Submission for Blood
Establishment Computer Software'' on January 13, 1997, and comments on
FDA guidance may be submitted at any time to the contact listed in that
guidance.
(Comment 58) One comment asked us to create an expedited submission
category for packaging changes that would be needed to comply with a
bar code requirement. The comment predicted that many firms would
submit supplemental applications to us so that we might approve
packaging changes, and the comment predicted that a large number of
supplemental applications would prevent us from approving packaging
changes quickly.
(Response) We decline to adopt the comment's suggestion. We
interpret the comment as suggesting that we may need to expedite review
of supplemental applications regarding packaging changes and that the
comment's use of the word, ``expedited,'' means that we should take
such supplemental applications out of the normal review process and
review them first, regardless of the order in which they arrived
relative to other types of applications.
We do not believe that expedited review will be necessary for
several reasons. First, most packaging changes that would be done to
accommodate a bar code should not require prior FDA approval. Packaging
changes can be reported to us in various ways, through a supplement of
changes being effected (see 21 CFR 314.70(c)), a supplement of changes
being effected in 30 days (see Sec. 314.70(g)(2)), and an annual
report (see Sec. 314.70(g)(3)); none of these supplements or reports
require prior FDA approval.
Second, for drugs that have already received FDA approval by the
time of the final rule's effective date, we are giving such drugs 2
years to comply with the bar code requirement. If a firm believes that
its packaging change is of a type that needs prior FDA approval, this
2-year period should give the firm and FDA sufficient time to prepare
and review the supplement.
If a firm still believes that it needs expedited review of a
packaging change, we would consider such requests under our existing
regulations and procedures (see Sec. 314.70(b); Center for Drug
Evaluation and Research, ``Requests for Expedited Review of Supplements
to Approved ANDA's and AADA's,'' Manual of Policies and Procedures
(MAPP) 5240.1 (dated November 1, 1995)); Center for Drug Evaluation and
Research, ``Requests for Expedited Review of NDA Chemistry
Supplements,'' MAPP 5310.3 (dated June 11, 1999)). Under Sec.
314.70(b), applicants may ask for expedited review of a supplement if a
delay in making the change would impose an ``extraordinary hardship''
on the applicant, and we consider expedited review requests on a case-
by-case basis and undertake such expedited reviews if adequate review
resources are available.
For packaging changes involving a biological product, see 21 CFR
601.12 and 314.70.
2. Comments Relating to Bar Code Problems or Quality
(Comment 59) One comment asked how people might report bar coding
and scanning errors.
(Response) As we stated in the preamble to the proposed rule (see
68 FR 12500 at 12510), the bar code would be part of the drug's label,
so errors in applying the bar code to the label should be handled like
any other packaging or labeling operation problem under GMPs (see 21
CFR 211.122, 211.125, 211.130, 211.180, and 211.184)).
If an individual encounters a problem scanning the bar code, and
the problem is due to the bar code's quality, then such scanning
problems can be reported to FDA through the Drug Quality Reporting
System. The Drug Quality Reporting System encourages health care
professionals to voluntarily report observed or suspected defects or
quality problems with marketed drug products. The agency receives
reports through the MedWatch Program.
For biological products, manufacturers can report scanning problems
as biological product deviations under existing reporting procedures
(see 21 CFR 600.14 and 606.171).
(Comment 60) Some comments asked us to audit or monitor bar code
quality. One comment said we should require the bar code to maintain a
passing grade of C or better to ensure its quality.
(Response) As we noted in the preamble to the proposed rule,
various bar code standards exist, as do standard procedures for bar
code verification (see 68 FR 12500 at 12510-12511). Given these
standards and other documents, as well as the comparatively greater
expertise of standards organizations such as the American Society for
Testing and Materials and the International Organization for
Standardization, we do not intend to audit or monitor bar code quality
aggressively. We also believe that our GMP requirements and the Drug
Quality Reporting System provide additional safeguards to ensure bar
code quality.
3. Comments Regarding FDA's Future Involvement With Bar Codes
(Comment 61) Two comments discussed our future involvement with a
bar code requirement. One comment said that if the rule referred to
EAN.UCC standards, without specifying the use of linear bar codes, we
would not need an ``exit strategy'' to allow for future technologies
and innovation.
In contrast, another comment said that the proposed rule had gained
the pharmaceutical industry's attention and that there is
``considerable momentum'' towards putting bar codes on drugs. The
comment said this voluntary effort would continue even if we did not
issue a final rule and said that the market would decide which
automatic identifiers meet health care needs so that we no longer had
to be involved. The comment said our continued involvement in this area
would not be ``efficient;'' it said we could monitor progress towards
the use of automatic identifiers, but should not manage it. It also
suggested that we include a ``sunset'' date in the final rule because
it claimed the rule created ``enormous uncertainty'' for hospitals
because the rule permitted inclusion of other
[[Page 9145]]
information in other formats. Thus, if a ``sunset`` date existed,
manufacturers would be able to use any one- or two-dimensional code
after that date, and this would give all parties ``a fair opportunity
to invest in the technology that will meet the future needs of their
institutions.''
(Response) As we stated earlier in our response to comment 38 in
section II.D.1 of this document, we intend to revisit technological
issues in the future, but we believe that linear bar codes, as an
initial requirement, will help prevent or reduce medication errors.
We agree, in part, with the comment that suggested that market
forces could reduce the need for continued FDA involvement. We note
that, for blood and blood components, interested parties have been able
to agree on domestic and international standards for encoding certain
information. For example, ABC Codabar is a bar coding system that the
health care industry adopted for blood and blood components and is
still commonly used in the United States. ISBT 128 is the product of a
consensus conference held by the International Council for Commonality
in Blood Bank Automation and is now preferred over ABC Codabar. The use
and acceptance of ABC Codabar and ISBT 128 demonstrates that interested
parties can agree on specific data standards and formats and, more
importantly, use those standards and formats.
Unfortunately, as the comments to the July 26, 2002, public meeting
and the proposed rule demonstrate, consensus is either absent or, at
best, is still developing when it comes to bar codes or automatic
identifiers for drugs. We continue to encourage manufacturers,
repackers, relabelers, private label distributors, hospitals, scanning
or reading equipment manufacturers, and other interested parties to
explore avenues for greater cooperation and consensus. We believe that
all parties may benefit by reducing medication errors through the use
of bar codes or other automatic identification technologies. For
example, manufacturers and hospitals may see fewer medication errors
and, as a result, reduced liability. Patient safety would be enhanced
as patients would experience fewer medication errors. Scanning or
reading equipment manufacturers would benefit by knowing how to develop
or program their equipment more effectively and efficiently (based on
the bar codes or identifiers used by manufacturers and accepted by
hospitals). Parties could also agree to encode information that we do
not require as part of the bar code, such as lot number and expiration
date information, and could agree on the automatic identifier(s) for
encoding that information and the equipment for reading or interpreting
the encoded information. If parties could develop consensus mechanisms
that enjoy widespread or unanimous support among those who would apply,
use, and develop automatic identification technologies, then we could
possibly reduce our involvement.
We disagree, however, with the comment's claim that the rule
creates ``enormous uncertainty'' for hospitals. The linear bar code
establishes a minimum, technological ``floor'' that hospitals will be
able to rely upon when deciding on equipment purchases. Although the
comment is correct that we will not object if firms encode lot number
and expiration date information voluntarily, we reiterate that the
inclusion of such information is voluntary, and so we will not dictate
how such voluntarily-provided information is presented. Moreover,
creating a ``sunset'' date as the comment suggested could increase the
possibility that hospitals will not invest in equipment until the
sunset date is reached. Hospitals might decide to defer their
investments because, when the sunset date arrives, drug manufacturers
could decide to switch to two-dimensional symbologies, thereby making
one-dimensional scanners either obsolete or in need of upgrades. So,
under a ``sunset'' scenario, hospitals could decide to wait until after
the sunset date to see whether manufacturers, repackers, relabelers,
and private label distributors agree on a particular technology, and
this would reduce the rule's benefits.
(Comment 62) One comment said we should review the bar code
requirements on a regular basis to determine whether they are
preventing or reducing medication errors.
(Response) We intend to monitor medication error reports and
published literature to assess the rule's impact on medication error
rates. As more drugs are bar coded and as more hospitals become capable
of scanning and interpreting those bar codes, we will be interested to
hear from hospitals about their experiences using bar coded drugs and
the impact on medication errors.
4. Miscellaneous Comments
(Comment 63) One comment said that scanning devices must be
ergonomically designed and the labels must be small enough to fit on
drug products. The comment added that scanners must be able to read
labels that are on curved surfaces.
(Response) Issues concerning scanner design and capability are
outside the scope of this rule. Given the abundance and variety of
scanners (i.e., whether the scanner is ``tethered'' to another device
or ``wireless'' or whether the scanner is ``heavy duty'' to withstand
impact in case it is dropped), we believe that hospitals should be free
to choose the scanners or reading equipment that is best suited to
their needs.
Similarly, issues concerning label size are outside the scope of
this rule.
However, with respect to reading bar codes on drug labels, the bar
code's ``readability'' would be subject to GMPs, and, under 21 CFR
211.122, any labeling material (which would include the product label)
that does not meet appropriate written specifications ``shall be
rejected to prevent their use in operations for which they are
unsuitable.''
(Comment 64) One comment said that the rule could advance other
public health objectives or issues, such as product traceability,
authentication, counterfeiting, and terrorism. It said we should not
ignore such issues during the rulemaking process.
(Response) We know that various public health initiatives might
benefit from technological solutions. However, consideration of other
public health initiatives should occur in a different forum where all
interested parties have the opportunity to consider the initiative or
issue and explore options (see, e.g., 68 FR 52773, September 5, 2003)
(announcing a public meeting on FDA's efforts to combat counterfeit
drugs)). It would be inappropriate for this final rule to invoke other
reasons for a bar code requirement when the administrative record has
focused almost exclusively on the need to prevent or reduce medication
errors.
(Comment 65) One comment said that the rule could have a negative
impact on hospital pharmacies if the bar code technology does not
recognize generic drug products. The comment also stated that, if a
pharmacy stocks one brand, and then stocks a different brand the next
week, drugs from both brands might still be located in automated
dispensing machines; in such a scenario, the comment asked how bar
coding would work.
(Response) The comment may have misunderstood the rule. Regarding
generic drug products, the final rule requires the bar code to contain
the drug's NDC number. Generic drug products have their own NDC numbers
that are distinct from those used by other manufacturers. Thus, there
should be no technological barrier to using the
[[Page 9146]]
bar code to identify generic drug products.
As for automated dispensing machines, this rule is neither intended
nor designed to assist in inventory control matters. Thus, a hospital
pharmacy that mixes drugs from different sources in its automated
dispensing machines (and presumably removes those drugs from their
packages and accompanying labels) may not be able to use bar code
technology to differentiate between different drugs inside the
automated dispensing machine.
(Comment 66) One comment said we should address the subject of
prescribers' handwriting because misread or illegible handwriting may
lead to medication errors. It added that we should address drug names
that sound alike and copies of ``NCR paper'' that are difficult to
read. The comment did not explain what it meant by NCR paper or why
copies of such paper are difficult to read.
(Response) Issues regarding handwriting and paper quality are
outside the scope of this rule and may also be outside our
jurisdiction.
(Comment 67) One comment said we should do ``whatever it takes'' to
decrease medication errors and increase the productivity of nursing
staff. Another comment said that nurses need a trustworthy, correct,
and speedy system that reduces workload and is more efficient than
manual systems. It urged that nursing staff be involved and adequately
trained in bar coding processes.
(Response) The final rule should help detect potential medication
errors before they can result in harm to patients and, as a result,
decrease medication errors. However, insofar as nursing staff
productivity is concerned, we believe that there may be an initial
small productivity loss due to the use of new technology (see 68 FR
12500 at 12527), but that, overall, the rule's benefits greatly exceed
productivity loss.
As for involving nursing staff in bar code systems development and
training, such matters are outside the scope of this rule and may also
be outside our jurisdiction.
(Comment 68) One comment said that the pharmaceutical industry
could support the necessary hardware and software to maintain databases
on drug sample use and to alert pharmaceutical manufacturers when drug
inventories are low. The comment suggested other data uses and database
possibilities, such as making data available for physicians and the
pharmaceutical industry (but protecting patients' identities) and
having FDA control or regulate large databases on drug use and drug
safety.
(Response) Issues concerning the creation, financing, and
maintenance of databases are outside the scope of this rule. Aside from
our MedWatch program, we have no plans to control or regulate large
databases on drug use and drug safety.
(Comment 69) One comment said we should cover ``non-standard''
items at minimal cost to the pharmacy. The comment listed ointments,
lipids, crash cart supplies, and total parenteral nutrition as examples
of ``non-standard'' items, but it did not explain why such products
needed bar codes.
(Response) We decline to revise the rule as suggested by the
comment. Requiring bar codes on prescription drugs, OTC drugs that are
commonly used in hospitals and dispensed pursuant to an order, blood,
and blood components will cover the majority of products that could
present a risk of medication error. Thus, to the extent that any of the
comment's ``non-standard'' items are prescription drugs or OTC drugs
that are commonly used in hospitals and dispensed pursuant to an order,
they would be subject to the bar code requirement unless otherwise
exempted.
As for a product's cost to pharmacies, we do not regulate the costs
that firms may charge to pharmacies. Thus, product cost issues are
beyond the scope of this rule, although we consider the rule's economic
impacts in section VII of this document.
(Comment 70) One comment asked for our guidance regarding scanners
on certain intravenous infusion pump systems. The comment said that two
manufacturers have infusion pump systems that are equipped with
scanners, but the scanners only read bar codes used by the same
manufacturer. The comment said that this practice forces hospitals to
buy drugs from the same manufacturer who made the infusion pump system
and creates a financial hardship on hospitals. The comment acknowledged
that hospitals can relabel drugs themselves, but said that hospital
relabeling would eliminate the rule's benefits.
(Response) Issues concerning scanner capabilities in existing
infusion pump systems are outside the scope of this rule. However, as
we stated in our response to comment 41, the bar code's ability to
affect medication error rates depends largely on the ability of
hospitals to scan and interpret the data in the bar code. So, for
example, choosing a commonly-used linear bar code symbology in a
standard that scanners can easily read will have a greater impact on
patient safety compared to a unique bar code symbology that few (if
any) scanners are programmed to read.
I. How Will We Implement the Rule?
The preamble to the proposed rule suggested that we would give
affected parties 3 years to comply with the bar code requirement for
human prescription drugs and OTC drugs commonly used in hospitals and
dispensed pursuant to an order (see 68 FR 12500 at 12512). It suggested
a similar implementation period for blood and blood components (see 68
FR 12500 at 12514). The preamble to the proposed rule also invited
comment on whether the implementation period should be shortened (see
68 FR 12500 at 12529, question 9).
(Comment 71) Many comments said that a 3-year implementation period
is sufficient or acceptable, although some expressed a desire to have
the final rule effective at the earliest possible date. One comment
agreed that a 3-year implementation period is sufficient, but cautioned
that packaging issues could complicate implementation.
In contrast, many other comments advocated a shorter implementation
period. These comments recommended different implementation periods,
such as:
[sbull] 2004 or December 31, 2004. Several comments sought
implementation by 2004 because they believed that manufacturers,
repackers, relabelers, and private label distributors could comply
earlier or because, in one case, the entity submitting the comment
explained that its contracts with drug suppliers require bar codes at
the unit-of-use package level by 2004.
[sbull] 2 years. One comment noted that some drug manufacturers are
already placing bar codes on their products, so the comment felt the
industry could meet a 2-year implementation period. Another comment,
from a drug manufacturer, endorsed a 2-year implementation period
because the rule only required the NDC number to be encoded in the bar
code. A different comment said that manufacturers should obtain FDA
approval of label changes (due to the bar code) within 2 years, but
added that the implementation period could be reduced to 18 months if
manufacturers supported such a reduction.
[sbull] a tiered implementation strategy whereby drugs that we
approve after the final rule's effective date must comply with a bar
code requirement at an earlier time. Five comments suggested a 2-month
period for drugs approved after the final rule's effective date, and
some
[[Page 9147]]
comments suggested that drugs approved before the final rule's
effective date should have no more than 3 years to comply.
One comment requested that we shorten the implementation period
without specifying a different implementation period.
One comment declared that shortening the implementation period
would be useless because hospitals would not be ready to use bar codes
and because manufacturers have not analyzed possible changes to the NDC
number.
One comment asked whether products that are already on the market
without a bar code can remain on the market through their expiration
date.
Only one comment advocated a longer implementation period. The
comment said the implementation period should be 5 years if we refuse
to create a general exemptions provision. The comment stated that the
additional time would allow for further development of new technologies
to address space limitations on small products.
(Response) We have decided to amend the implementation scheme as
follows. First, for drugs that are approved on or after the effective
date of this rule, we would expect compliance within 60 days after the
drug's approval date. Early implementation of a bar code requirement
for newly-approved drugs is appropriate because such drugs will not
present the same label redesign issues as previously-approved drugs.
Additionally, early implementation of a bar code requirement for
newly-approved drugs will create an incentive for all parties to
develop and use bar codes, and this should have a beneficial impact on
patient safety.
Second, for drugs approved before the effective date of this rule,
we would expect compliance within 2 years after that date. We agree
with the comments that companies have already demonstrated their
ability to put bar codes on their drug products quickly and agree that
requiring only the NDC number in the bar code should facilitate
implementation. A 2-year implementation period will also enable firms
to exhaust existing stock. If a drug has an expiration date that
exceeds 2 years, and the drug was not subject to the bar code
requirement at the time it was marketed, we will allow that drug to
remain on the market without a bar code.
However, we recognize that we cannot preclude the possibility that
some drug products may be difficult to bar code, either because of
their containers, size, or other complications. Therefore, if a
manufacturer, repacker, relabeler, or private label distributor can
demonstrate to us that, for technological reasons, it cannot comply
within 2 years after the final rule's effective date, it should contact
us. If we agree that the firm cannot comply within 2 years, we may give
the firm an additional year to comply with the rule. We will not
entertain any requests for additional time based on non-technological
considerations; for example, if a firm is unable to decide on which
linear bar code symbologies to use, that indecision would not justify
an additional year to comply with the rule. As another example, if a
firm decided to encode more information (other than the NDC number)
voluntarily, but was experiencing difficulties encoding that additional
information, we would not agree to an additional year to comply with
the rule.
Firms who believe that technological reasons prevent them from
complying within 2 years of the rule's effective date should contact
the center responsible for their particular product. For human drug
products, the contact office is the Office of New Drugs Compliance
(HFD-020), Center for Drug Evaluation and Research, Food and Drug
Administration, 5600 Fishers Lane, Rockville, MD 20857.
For biological products, including blood and blood components, the
contact office is the Office of Compliance and Biologics Quality (HFM-
600), Center for Biologics Evaluation and Research, Food and Drug
Administration, 1401 Rockville Pike, Rockville, MD 20852.
As for those comments that would defer implementation until any
regulatory changes to the NDC number occur or would seek a 5-year
implementation period if we refuse to create a general exemption
provision, we decline to adopt their suggestions. Because we have not
yet issued a drug establishment registration and listing proposal
(which would include provisions regarding possible regulatory changes
to the NDC number), we cannot predict how the NDC number will change or
whether it will change at all. We can predict that the NDC numbers for
drugs approved after the final rule's effective date should be unique
(because we have devoted more attention to NDC numbers recently to
ensure that they are unique), will remain unchanged even if we revise
the NDC number system, and will be capable of being encoded in bar
codes.
Additionally, we decline to extend the implementation period to 5
years to allow for possible technological developments for small
products. As we noted in our response to comment 27, firms have placed
linear bar codes on products as small as 1 mL vials, and the UCC itself
stated that no pharmaceutical member to the UCC had presented a case of
a product that was too small to bear an RSS bar code. Thus, existing
bar code symbologies may be satisfactory for small packages. We also
remind parties that there may be other options, such as changing
packaging, to accommodate the bar code.
(Comment 72) One comment focused on blood and blood components. The
comment said the implementation period should be 1 year. The comment
explained that ISBT 128 has been approved by CBER and the American
Association of Blood Banks (AABB) since 2000 and that a 1988 AABB
implementation task force had recommended an 18-month implementation
plan.
(Response) For uniformity among products we believe that a 2-year
implementation period is appropriate for human drug products,
biological products, and blood and blood components. Blood banks are,
of course, free to implement the requirements of the rule on a shorter
time schedule.
(Comment 73) One comment asked if we could offer any incentives to
manufacturers to get them to comply quickly with a bar code
requirement.
(Response) We have given manufacturers, repackers, relabelers, and
private label distributors considerable flexibility in selecting their
own linear bar code symbologies, their data standards (i.e., EAN.UCC or
HIBCC), and the bar code's placement on the label. We have even
simplified, to the maximum extent we can, the manner in which
manufacturers, repackers, relabelers, and private label distributors
would report their bar code label changes to us (i.e., through annual
reports rather than supplements that require our approval). These
efforts should minimize the regulatory burden on manufacturers (and
others who are subject to the bar code requirements) and make it easier
for them to comply with the rule at the earliest opportunity.
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)) of the
act (21 U.S.C. 321(n), 321(p), 351, 352, 353, 355, and 371(a)), and
sections 351 and 361 of the PHS Act (21 U.S.C. 262 and 264).
A bar coding requirement for drugs, including biological products,
would permit the efficient enforcement of the
[[Page 9148]]
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's
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 of the drugs (prescription drugs and the subset of covered OTC
drugs) covered by this final rule may be used in the hospital setting,
such use in hospitals can be considered the ``conditions of use as are
customary or usual.'' 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 of a drug product 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 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. Thus,
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.
Section 505(b)(1)(D) of the act requires an NDA 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
351(a)(2)(B)(i)(II) of the PHS 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 the preamble, 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
repacking. A bar coding requirement therefore helps prevent
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
the act to appear on the label or labeling is not prominently placed
thereon with such conspicuousness (as compared with 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 licensed biological products, including blood, are also
prescription drug products, the sections of the act discussed elsewhere
in the legal authority section provide ample legal authority for
issuance of this regulation. However, there is also additional legal
authority for the rule's requirements as to biological products
regulated under the PHS Act. Section 351(a) of the PHS Act provides for
the approval, as well as the suspension and revocation, of biologics
license applications. The bar code requirement for biological drugs,
and the machine-readable information requirement for blood and blood
components, are designed to ensure the continued safe and effective use
of licensed biological products. Thus, we may refuse to approve
biologics license applications (BLAs), or may revoke already approved
licenses, for biological products or blood and blood components that do
not have such codes or information.
Additionally, section 361 of the PHS Act authorizes regulations
necessary to prevent the introduction, transmission, or spread of
communicable diseases. With specific regard to blood and blood
components, the requirement for machine-readable information will aid
in the control 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
[[Page 9149]]
regulatory action. Our enforcement actions under the act include, but
are not limited to, seizure, injunction, and prosecution, and violation
may result in withdrawal of approval of a product's marketing
application.
IV. Environmental Impact
We have determined under 21 CFR 25.30(h) and (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
A. What Is the Estimated Information Collection Burden?
This final 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 below 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.
Title: Bar Code Label Requirement for Human Drug and Biological
Products
Description: We are issuing a new rule that would require human
drug product and biological product labels to have bar codes. The rule
requires bar codes on most human prescription drug products and on OTC
drug products that are dispensed pursuant to an order and commonly used
in health care facilities. The rule also requires 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 health care facilities, the bar code would contain
the NDC number for the product. For blood and blood components, the
rule specifies the minimum contents of the machine-readable information
in a format approved by the CBER Director as blood centers have
generally agreed upon the information to be encoded on the label. The
rule will 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 bar code information for drugs subject to an NDA or ANDA
will be reported through an annual report, this rule affects the
reporting burden associated with 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 components 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
component 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 0910-0338. 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).
Parties may also seek an exemption from the bar code requirement
under certain, limited circumstances. Section 201.25(d) requires
submission of a written request for an exemption and describes the
contents of such requests.
Description of Respondents: Manufacturers, repackers, relabelers,
and private label distributors of prescription drug products, including
biological products, or OTC drugs that are dispensed pursuant to an
order and commonly used in hospitals.
We estimate the burden of this collection of information as
follows:
Table 1.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
Annual
21 CFR Section No. of Respondents Frequency of Total Annual Hours per Total Hours
Responses Responses Response
----------------------------------------------------------------------------------------------------------------
201.25 and 1,447 31.1 45,000 24 hours 1,080,000
610.67
----------------
Sec. 40 1 40 24 hours 960
201.25(d)
----------------
314.81(b)(2)(ii 1,447 5.9 8,576 10.5 minutes 1,497
i)
----------------
601.12(f)(3) 211 1 211 1 minute 3.5
----------------
606.121(c)(13) 981 42,507.7 41.7 million 1 minute 695,000
----------------
Total 1,777,550.5
----------------------------------------------------------------------------------------------------------------
\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 whose label changes would be
reported in an annual report pursuant to Sec. 314.81 or 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 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
[[Page 9150]]
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 manufacturers of transfusable
blood and blood components. 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 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 AABB 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 3 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 one minute to apply a machine-readable code manually; if a
blood collection facility uses an on-demand printer, the time would
range between 15-30 seconds. For purposes of this estimate, we adopt
the larger time estimate of one minute per machine-readable information
for blood, thus resulting in an annual reporting burden of 695,000
hours ((41.7 million reports x 1 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.
[sbull] For exemption requests under Sec. 201.25(d), we believe
that few products would warrant an exemption from the bar code
requirement. Consequently, based on our experience with other exemption
provisions, we estimate that there may be 40 exemption requests per
year and that each exemption request will require 24 hours to complete.
This should result in an annual reporting burden of 960 hours (40
requests per year x 24 hours per request = 960 hours).
B. What Comments Did We Receive on Our Estimates?
Several comments disagreed with our estimates, and one comment even
disagreed that the rule would have practical utility insofar as its
products were concerned.
(Comment 74) Specifically, two comments from allergenic extract
firms disagreed with our claim that reporting label changes would take
only 1 minute. One comment claimed that the estimate would be 400 hours
for its firm, based on 15 minutes per label report and 30 product
labels per report. It declared the burden to be ``onerous and
unnecessary.'' The comment declared that the rule would not enhance our
oversight of the allergenic extract industry and would not reduce
medication errors because allergenic extracts are administered in
physician's offices and clinics where ``mistakes do not normally
occur.'' The second comment stated that its firm would have to submit
label changes for 1,200 labels and 1,200 packages at 10 minutes per
report, for a total burden of over 400 hours, and declared this would
be an ``unnecessary hardship'' on a small firm.
(Response) The final rule exempts allergenic extracts from the bar
code requirement, so the comments' claims are moot. However, we
reiterate that we expect that the addition of a bar code to a label
would necessitate only a simple statement in the annual report, which
is already a required document (see 68 FR 12516; 21 CFR 314.81). This
statement would simply declare that the bar code has been added to the
label. So, for example, if the statement in the annual report was, ``We
added a bar code to the label pursuant to 21 CFR 201.25,'' it is
difficult to see why such a statement requires 10 or 15 minutes to
prepare or insert into an annual report, and even more difficult to see
why such a statement results in a 400-hour burden for a firm. The
comments did not explain how it arrived at its estimate of 10 and 15
minutes per report, so, because we have no basis to evaluate the
accuracy of the comments' larger time estimates, we decline to adopt
them.
(Comment 75) One comment from a medical gas firm said that we
underestimated the number of firms subject to the rule. The comment
said that there are over 3,000 medical gas sites alone.
(Response) Our estimate was based on the number of firms that have
registered with FDA, and one should remember that the final rule
applies to manufacturers, repackers, relabelers, and private label
distributors who are subject to the drug establishment registration
requirements (see Sec. 201.25(a)). We do not know whether the
comment's claim of over 3,000 medical gas ``sites'' includes firms that
are not subject to our drug establishment registration requirements,
but if a firm is not subject to the drug establishment registration
requirement, then it would not be subject to the bar code requirement.
Yet, even if we were to accept the comment's estimate of 3,000
medical gas establishments and assumed that all were subject to the
drug establishment registration requirements, we do not need to change
our Paperwork Reduction Act estimates because the final rule exempts
medical gases from the bar code requirement.
The information collection provisions in this final rule have been
approved byOMB. (OMB control number: 0910-0537; expiration date 2/28/
07).
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid OMB control number.
VI. Federalism
We have analyzed this final 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
[[Page 9151]]
levels of government. Accordingly, we have concluded that the rule does
not contain policies that have federalism implications as defined in
the Executive order and, consequently, a federalism summary impact
statement is not required.
VII. Analysis of Impacts
A. Introduction
We have examined the 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 regulation is consistent with the principles set forth in
Executive Order 12866 and the three statutes. We have identified the
regulation as an economically significant regulatory action, as defined
in Executive Order 12866. We believe the regulation is unlikely to have
a significant impact on a substantial number of small entities. The
expected impact of this regulation 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 regulation to be major under the
Congressional Review Act.
We estimate that the rule provides net benefits to society of $3.4
billion to $3.6 billion annually, depending on whether a discount rate
of 3 percent or 7 percent is used. This estimate relies on work by the
Eastern Research Group, Inc. (ERG), which we contracted to collect
data, interview industry experts, and analyze the costs and benefits of
the rule. The detailed analysis and references in support of the
impacts summarized in Table 2 is included in the docket as Reference 46
and is available on FDA's Web site. In section VII.O below, we present
our analysis of the substantial uncertainty in the estimates presented
in Table 2.
Table 2.--Estimated Impacts of the Final Rule in Millions of Dollars Annualized Over 20 Years
----------------------------------------------------------------------------------------------------------------
Anticipated Net Benefits Potential
Discount Rate Regulatory Hospital Societal (benefits minus Hospital
Costs Costs* Benefits** costs) Efficiencies***
----------------------------------------------------------------------------------------------------------------
7 Percent $8 $660 $5,200 $4,500 $380 to $600
-------------------------
3 Percent $7 $600 $4,900 $4,300 $360 to $570
----------------------------------------------------------------------------------------------------------------
Note: These estimates may not sum because of rounding.
*Costs due to voluntary accelerated purchase and utilization of bar coding systems
**Benefits to public health due to avoidance of adverse drug events
***Potential additional benefits from efficiencies in reports, records, inventory, and other hospital
activities.
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
hospitals. These investment expenditures are necessary to achieve the
societal benefits expected from the 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 the societal benefits would occur after hospitals
purchase and install the necessary equipment to take advantage of bar
codes. The net benefit of the rule is the societal benefit minus the
induced expenditures minus the regulatory costs. The net benefits of
the rule, which are $3.6 billion and $3.4 billion per year if
annualized at 7 percent and at 3 percent, are $38 billion and $51
billion in present value terms, if calculated at 7 percent and 3
percent discount rates respectively. These estimates, however, account
for neither expected potential hospital efficiencies, nor income
transfers following fewer awards for medical malpractice.
While efficiency gains in hospital recordkeeping and reporting
procedures produce societal benefits, we are extremely uncertain that
hospitals would make the additional investments to achieve them. This
final rule focuses on the use of bar code technology only in hospital
pharmacies and patient care wards. Such systems could provide the
opportunity and incentive for hospitals to expand bar code technology
into other areas of operation, such as billing or supply ordering. The
installation of bedside systems may make such an expansion more likely,
but we believe it would not be a direct effect of this final rule. In
addition, the estimated efficiency gains are extremely uncertain.
However, we have noted the potential of these additional gains, but
have not claimed them as direct benefits of this final rule.
We also note that reductions in income transfers from the potential
reduction in medical malpractice awards and reductions in medical
liability insurance that may occur with reductions in adverse drug
events are not considered societal benefits because they do not
represent resource or opportunity savings. These effects are discussed
later in this section, but do not contribute to the estimated net
benefits shown in Table 3.
B. Objective of the Rule
The objective of the rule is to enable the health care sector to
utilize technological solutions to reduce preventable adverse drug
events (ADEs)\1\ and acute hemolytic
[[Page 9152]]
transfusion reactions (AHTRs) associated with medication errors\2\ and
transfusion errors in hospitals.\3\
---------------------------------------------------------------------------
\1\ 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). The definition used
for the analysis in the proposed rule included AHTRs, which are
shown separately for the final rule's analysis.
\2\ 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).
\3\ 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).
We have excluded psychiatric, alcohol and chemical dependency,
rehabilitation, and other specialty hospitals. We have included
general medical and surgical hospitals in which the average stay is
less than 30 days.
---------------------------------------------------------------------------
C. Estimate of Preventable Adverse Drug Events and Acute Hemolytic
Transfusion Reactions
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 our efforts to estimate the current number of
preventable ADEs and AHTRs.
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. We then projected preventable
ADEs for the entire evaluation period based on expected future
increases in hospital admissions.
We used a similar methodology to estimate preventable AHTRs.
ERG identified four comparable published studies that reported
rates of ADEs per hospital admissions (Refs. 2 to 5). 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 non-obstetric hospital admissions during
2000 \4\. 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 373,000 (30 percent) of these ADEs were
preventable. Based on published reports (Refs. 2 and 6), we also
estimated that 1,048,000 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 preventable ADEs would total 478,000 within 20 years.
---------------------------------------------------------------------------
\4\ Obstetric admissions are rarely associated with ADEs. The
referenced articles have eliminated these admissions in their
analyses. Reasons for the low probability of ADEs include the
relatively healthy state of most admissions as well as the low
number of medications.
\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 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 resulted in permanent disability. We used these
estimates in our analysis.
AHTRs resulting from erroneous blood transfusions have been
extensively studied and widely reported. Based on data provided by the
National Blood Data Resource Center (NBDRC), ERG estimated that United
States hospitals currently transfuse approximately 15.7 million units
of whole blood and red blood cells to 5.2 million patients per year.
According to recent studies (Ref. 27) the frequency of erroneous ABO-
incompatible transfusion errors is approximately 1 per 38,000, or 414
errors per year. Another study (Ref. 7) has estimated that two-thirds
of all incompatible transfusions were the result of preventable errors.
Using this figure, the current number of annual preventable erroneous
blood transfusions that result in AHTRs is 276. In addition, the
literature reports that potential blood transfusions that could have
resulted in adverse outcomes but did not account have a frequency five
times actual errors (Ref. 8). Thus, we have estimated 276 preventable
and 1,380 potential AHTRs occur in hospitals each year. The NBDRC has
estimated an annual growth rate of transfusions of 6 percent.
Discussions with hospital personnel believe this may be an
overestimate, so we have used a 3 percent annual growth in transfusions
to forecast preventable AHTRs over time. Therefore, within 20 years we
expect 498 preventable and 2,492 potential AHTRs in the absence of this
regulation.
D. The Final Rule
With certain exceptions, we are requiring linear bar codes on
almost all prescription drug and biological products (including
vaccines) and all over-the-counter (OTC) drug products commonly used in
hospitals and dispensed pursuant to an order. We are also requiring the
use of machine-readable information on all human blood and blood
components intended for transfusion. For drug products, this
information will include National Drug Code (NDC) number identifying
the dosage, strength, nature, and form of each administered product and
be portrayed in a linear bar code\6\ and include product-specific and
package-specific NDC numbers. We will 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 be effective within 2 years. For blood
and blood components, the machine-readable information will include
information identifying the facility, the lot number relating to the
donor, a product code, blood type, and Rh.
---------------------------------------------------------------------------
\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 issuing this rule 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
[[Page 9153]]
reduce the number of ADEs and AHTRs 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 final rule will increase costs to the manufacturers, repackers,
relabelers, and private label distributors of the affected products by
requiring changes in manufacturing, packaging, and labeling processes.
It will also increase costs to some hospitals by requiring a change in
some bar code readers associated with these products. The final rule
will 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 final rule will enable hospitals to take advantage of the coded
information that would permit hospitals to reduce ADEs, while achieving
other operational cost efficiencies. The final rule will 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 or identifying drugs subject to
recalls).
E. Description of Affected Sectors
1. Current Machine-Readable Technologies
Prior to developing the 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. 9), 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. Health care 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 Business Communication 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 HIBCC codes have been effectively used in the medical
device industry, they have not won wide acceptance within
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
symbologies). 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 required by this 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
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 non-water
soluble inks produce a shine that reflects to the scanner and affects
how the bar code is read. Laser printers are subject to toner 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 hospital 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
A large majority of exterior pharmaceutical packages already
include the NDC number in a bar code, according to discussions with
staff at two large Veteran Health Administration Comprehensive Mail
Order Pharmacies. The final rule, however, by requiring this bar coded
information on the drug's label, may result in a bar code on both
exterior and interior packaging. In addition, some prescription and OTC
drug products are already 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 in blister packs
rarely have bar coded information. 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 about 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 about 3,513 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 482 packaging
lines. Overall, we estimate that 3,995 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
[[Page 9154]]
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 4,976 affected packaging lines in 2,428 separate
establishments.
The number of separate trade and generic named affected products is
about 17,000, an increase greater than 500 percent since 1990. Each of
these named products may be marketed in varying strengths or dosage
forms. Using data from the current NDC number list, we have estimated
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 as many as 10 percent of OTC
packages (9,800 packages) are commonly used in hospital settings and
would be subject to the bar code rule. For example, OTC analgesics that
may be dispensed to a patient pursuant to an order would be subject to
the final rule, but shampoos or toothpastes that may be provided would
not. The Consumer Healthcare Products Association (CHPA) estimated that
as many as 10 percent of their member's 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 products are routinely dispensed. However, discussions with OTC
manufacturers and hospital pharmacists have indicated larger potential
coverage. Hospital pharmacists periodically order wide arrays of
products from catalogs. While some categories of OTC products are
unlikely to be affected by the regulation, ERG has estimated that as
many as 75 percent of OTC shelf-keeping units (SKUs) could potentially
be used in hospitals and subject to the requirement of this regulation.
For purposes of this analysis, because we do not know the specific SKUs
that will be ``commonly used in hospitals,'' we have assumed that 75
percent of all OTC drug products (73,500 SKUs) would be required to
provide bar coded information. Overall, 153,500 separate unit-of-sale
packages are expected to be subject to the final rule.
OTC drug manufacturers frequently redesign labels. Based on
discussions with manufacturers, 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. We examined selected NDA files and
found that changes to prescription drug product labels occur, on
average, more than once per year. While marketing of prescription drug
products may not be as sensitive to labeling graphics and package
design as OTC products, there are many other reasons why manufacturers
change their product labels. For this analysis, we have nevertheless
assumed that the final rule will result in significant involuntary
relabeling by the industry.
3. Retail Outlets
Retail pharmacies currently have the capability to read linear
standardized bar codes at their in-house scanners. 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 current stock of scanners in retail outlets may require
upgrades or replacement if the bar code rule were to mandate reduced
space symbology (RSS). These upgrades would not be a direct requirement
of 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 adopting such a standard would not require
scanner replacements or upgrades. The final rule covers only those OTC
drug products commonly used in hospitals and dispensed pursuant to an
order. 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. The regulation
is not expected to impact this sector, but, in developing this rule, we
have considered alternatives that would affect retail outlets.
4. Hospitals
The final rule does not require hospitals to introduce the new
automated technologies, but the development of consistent bar codes on
drugs and consistent machine-readable information on blood and blood
components will 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 would
probably need bar codes using the RSS symbology. In order to properly
scan these products, hospitals that currently have installed bar code
readers would have to upgrade or replace some scanners. According data
from the National Center for Health Statistics (NCHS), there are 5,040
hospitals in the United States (NAICS 622) with a total of about
850,000 beds that will be likely to use bar code technology. Estimates
of personnel in these hospitals include 48,500 pharmacists, 44,500
pharmacy assistants, and almost 1.2 million nurses. Overall, a nurse is
responsible for 3 beds per shift. An average hospital includes 170 beds
and employs about 10 pharmacists, 9 pharmacy assistants, and 237
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 1
percent of all hospitals have installed bedside, point-of-care systems
that use bar coded information. An additional 3 percent of hospitals
use some form of computerized system in the medication process, but not
all use bar codes. Overall, an estimated 2 percent of all hospitals
(101 hospitals) currently use bar codes in everyday operations. Even in
the absence of the regulation, we expect the remaining 4,939 hospitals
to gradually implement computerized tracking systems. Discussions with
industry consultants and the American Hospital Association (AHA),
however, suggest that without standardization, hospitals would need an
estimated 20 years to adopt and use systems with bar code readers and
to use 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, industry
experts felt that 20 years was not an unreasonable expectation. We
examined the impact of alternative future acceptance rates as a
sensitivity analysis.
We requested comments on the potential uses of bar code information
on drug products at a public meeting held on July 26, 2002. Comments
from that public meeting 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.
[[Page 9155]]
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 and AHTR
avoidance. While some of these returns to hospitals (such as reduced
liability awards and malpractice liability insurance premiums) may be
partly transfers, we believe such additional efficiencies are likely.
5. Nursing Homes and Long-Term Care Facilities
We analyzed the potential impact of bar code technology for the
prevention of preventable ADEs in nursing homes and other long-term
care facilities (NAICS 623110). According to the American Health Care
Association (AHCA), there are 16,456 nursing homes in the United
States, 11 percent of which are hospital-based. These facilities
account for about 1.8 million beds with an occupancy rate of over 85
percent. The AHCA estimates there are 561.7 million patient-days in
nursing homes each year, with 1.5 million annual admissions. Most
nursing homes are serviced by long-term care (LTC) pharmacies. There
are approximately 3,000 of these pharmacies, including those that only
service nursing homes.
6. FDA Oversight and Responsibilities
We would be affected in three 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.
We would also develop and maintain a process of reviewing and
granting exemptions to these regulatory requirements for specific
products. Although we estimate that we will receive approximately 40
annual exemption requests, we cannot accurately predict the resources
required to process these exemption requests.
The third area in which our activities would be impacted by the
final rule would be our use of compliance resources. The final rule
requires affected products to have bar coded information (or machine-
readable information in the case of blood and blood components).
Although the exact impact on our compliance resources is not
quantified, we recognize that the creation of new regulatory
requirements will need additional resources to ensure compliance.
F. Regulatory Costs of the Final Rule
1. Introduction
We estimated costs for a 20-year evaluation period to reflect the
time that hospitals would 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 to the affected sectors over the entire
evaluation period using both 7 percent and 3 percent annual discount
rates. We assume that costs and expenditures accrue at the beginning of
each year. The detailed calculations and references that support the
following analysis are available as Reference 1.
2. Costs to Manufacturers and Packagers of Affected Products
The pharmaceutical industry would face compliance costs from this
regulation, because we would require manufacturers, repackers,
relabelers, and private label distributors to include NDC numbers in
bar code format, using linear bar code symbology for all unit of dosing
products. The final rule requires this information within 2 years of
the implementation date. The final rule also affects the production
processes of the pharmaceutical and biological product industries.
Although manufacturers appear to initiate labeling changes fairly often
for internal purposes, the final rule could lead to 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
$28.1 million over the first 2 years of the evaluation period. Among
the major components of these investment costs are $17.4 million
resulting from modifications of unit-dose interior packaging to include
a unique NDC number in a linear bar code format for every product.
Exterior packaging modifications that include NDC information would
cost $6.1 million over the 2-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 $4.7 million over the 11th and 12th
evaluation years for this replacement and upgrade. In addition, the
packaging production process would result in additional annual
operating and maintenance costs reaching $0.4 million by the second
evaluation year. In total, we estimate that the costs incurred by the
prescription drug manufacturers, repackers, and relabelers to comply
with the final rule over the 20-year period would be $3.2 million per
year if annualized using a 7 percent annual discount rate, and $2.5
million if annualized using a 3 percent discount rate.
b. Over-the-Counter drugs. The OTC drug industry has estimated that
fewer than 10 percent of their products are commonly used in hospitals
(CHPA, 2002). However, suppliers and hospitals have asserted that as
many as 75 percent of OTC SKUs would at least occasionally be ordered
for hospitals. For this analysis, we assume that 75 percent of all OTC
drug products could be required by the rule to include bar coded NDC
numbers. It is likely the industry would either assign internal
production processes that could allow labeling differentiation for
these products, or repackers and relabelers would provide the required
labeling. We believe that the packaging changes required to install bar
coding equipment are so large they 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 $19.9 million over
2 years, with additional capital investments of $1.5 million during the
11th and 12th evaluation years. The estimated annual operating costs to
provide bar codes to the affected proportion of the OTC drug market are
expected to reach $0.3 million by the second year. Overall, the
estimated annualized costs to the OTC drug industry, using a 7 percent
annual discount rate over the 20-year evaluation period, are $2.2
million. With a 3 percent annual discount rate, the annualized costs to
OTC manufacturing firms are $1.6 million.
c. Blood and blood components intended for transfusion.
Manufacturers of blood and blood components intended for transfusion
could also be minimally affected by the rule, but we could not identify
a manufacturer of blood and blood components intended for transfusion
that does not currently apply bar coded information that includes
information required by this final rule. The final rule does not
specify a particular bar code standard
[[Page 9156]]
for this market segment. Therefore, we do not believe this final rule
will pose any incremental costs to this industry.
d. Total cost to manufactures, repackers, relabelers, and private
label distributors. The annualized costs to manufacturers, repackers,
relabelers, and private label distributors of prescription products,
OTC products, and human blood and blood components are $5.4 million
using a 7 percent discount rate. Using a 3 percent discount rate, the
annualized costs to manufacturers, repackers, relabelers, and private
label distributors are $4.1 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 proposed linear standard bar codes. However, if we issued an
alternative regulation requiring specific 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 will not be affected
by the rule.
4. Costs to Hospitals
The final rule requires NDC numbers in linear bar codes on the
labels of the affected products. However, because we expect that
manufacturers, repackers, relabelers, and private label distributors
may find it necessary to use RSS symbology on small unit-dose packages
or vials and bottles, hospital scanners and readers must have the
ability to capture this information in RSS format. As a result, in
order for hospitals with currently installed bar code reading systems
to maintain current operating practice, some scanners must be replaced
with scanners that are RSS-capable. Replacement of these scanners is
necessary to maintain current operations.
These costs are somewhat mitigated for the approximately 2 percent
of all hospitals (101 hospitals) that currently utilize 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 repackage and apply bar codes to
about 95percent of dispensed medications. These 101 hospitals would
avoid some of these expenditures (because 25 percent of all medications
will have useable bar codes) under the rule.
The final rule would result in the premature replacement of
scanners used in hospital pharmacies and treatment wards. ERG has
estimated that the annualized, incremental costs to hospitals of
accelerating scanner replacement or upgrades to read RSS symbology is
$0.8 million (at a 7 percent discount rate) or $0.6 million (at a 3
percent discount rate).
According to literature reports, it costs as much as $0.03 per
unit-dose to apply a bar code in hospital pharmacies. Currently, 25
percent of dispensed medication must have bar codes applied by in-house
pharmacy in unit-of-use packages. Avoidance of this activity under the
final rule will reduce costs by about $0.2 million per year.
Overall, we estimate the average annualized costs of the final rule
less the cost savings to hospitals to be $0.6 million using a 7 percent
annual discount rate and $0.4 million using a 3 percent annual discount
rate.
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
153,500 of these packaging units to require bar coded NDC numbers
because we estimate that 75 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 890,000 new NDC codes over 20 years, or
44,500 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 database containing all NDC numbers. This
implies an annual resource requirement of 22,250 hours, or
approximately 10 full-time equivalents (FTEs). These direct resources
require supervision, administration, and support. To account for these
indirect resources, we multiplied direct resources by 2, resulting in
20 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 $2.4 million.
Although additional regulatory requirements, such as developing and
operating a exemption waiver process or requiring readable bar code
information on product labels, would increase our administrative and
compliance burdens, we have not quantified these impacts.
6. Total Regulatory Costs
The total direct annualized regulatory costs of the final
regulation over the 20-year period amounts to $8.4 million using a 7
percent annual discount rate and $6.9 million using a 3 percent
discount rate. These costs differ from the costs estimated for the
proposed rule because of our analyses of the proportion of affected OTC
drug products, the human blood and blood component industry, hospital
responses to bar codes, and a 2-year implementation period. Table 3
shows future projections for the increased investments and operating
and maintenance costs expected from the regulation.
Table 3.--Regulatory Costs by Year in Millions
------------------------------------------------------------------------
Operating and
Evaluation Year Investment During Year Maintenance Cost
------------------------------------------------------------------------
1 $32.6 $2.6
----------------------
2 $24.0 $2.9
----------------------
3 0 $2.9
----------------------
4 0 $2.9
----------------------
[[Page 9157]]
5 0 $2.9
----------------------
6 0 $2.9
----------------------
7 0 $2.9
----------------------
8 0 $2.9
----------------------
9 0 $2.9
----------------------
10 0 $2.9
----------------------
11 $3.2 $2.9
----------------------
12 $3.0 $2.9
----------------------
13 0 $2.9
----------------------
14 0 $2.9
----------------------
15 0 $2.9
----------------------
16 0 $2.9
----------------------
17 0 $2.9
----------------------
18 0 $2.9
----------------------
19 0 $2.9
----------------------
20 0 $2.9
------------------------------------------------------------------------
[[Page 9158]]
G. Other Anticipated Expenditures
We anticipate that the final rule will affect facilities defined as
hospitals and included in the NCHS report on Health 2002.\9\ The final
rule would impact hospitals (NAICS 622) by encouraging them to
accelerate the efficient use of bar code reading technology in bedside
point of care settings. The expected increased investment would lead to
a significant reduction in the number of ADEs and AHTRs among hospital
patients. We assume that hospital investments in this technology occur
at the beginning of each year.
---------------------------------------------------------------------------
\9\ We have tried to quantify impacts on nursing and residential
care facilities (NAICS 623) in response to comments on the proposed
rule, but the relatively high costs of installing integrated bar
code scanning systems and the relatively low rate of reported ADEs
make it unlikely that the rule will affect this sector.
---------------------------------------------------------------------------
Hospitals have long considered the application of bar code reading
technology for their facilities. According to the American Hospital
Association (AHA), almost half of United States hospitals have explored
the possibility of independently installing this technology. A few
(about 4 percent of all United States 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 applicable only 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, introduces potential
errors, 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 and AHTRs.
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 the installation of scanners, readers, software,
initial training etc. is $448,000.\10\ In addition, although there is
considerable uncertainty, hospital industry executives and consultants
contacted by ERG agree that negative productivity effects are likely
after installation of a bar code reading system. These contacts noted
that using scanners could result in reductions in patient ward
productivity because current scanners and administration procedures
would have to be revised to accommodate the technology. Difficulties
could arise, for example, when multiple doses of medication are
required at the same time for different patients; or 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. While some consultants believed that bar code systems
would ultimately be resource neutral, the most detailed analysis of the
VA system (Ref. 10) estimated a 10 percent loss of nursing productivity
after implementing a bar code system. Our analysis assumes that
hospital ward productivity levels would fall by 3 percent annually over
the evaluation period. We examine the effects of alternative
assumptions in section VII.O below. The annual opportunity costs of
these productivity losses, together with the operation and maintenance
expenses, amount to $556,000 per year for the average sized hospital.
(Operating costs are slightly higher if installed systems are unable to
take advantage of required bar codes on labels). Some of these expected
productivity losses would be mitigated by efficiency gains in other
hospital procedures as discussed later.
---------------------------------------------------------------------------
\10\ Per hospital expenditures and benefits are based on an
average sized hospital based on bed capacity. The average United
States hospital has 170 beds (NCHS, 2002).
---------------------------------------------------------------------------
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 even in the absence of
this regulation, hospitals would likely install bar code readable
technology within 20 years. Therefore, we believe that while only about
101 hospitals currently use bar codes in everyday operations, the
remaining 4,939 hospitals would ultimately invest in this technology.
These experts have also predicted, however, 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 be swayed to make these investments much
earlier. Thus, we believe that the regulation would effectively prompt
facilities to accelerate these investments.
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 is 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 5 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 regulation. We
acknowledge that precise estimates of the rate of acceleration of
technology acceptance are uncertain. However, industry experts
indicated that doubling the rate of technology acceptance was not an
unreasonable assumption. Alternative rates of acceptance were compared
and discussed as a sensitivity analysis.
ERG used a probit pattern of adopting bar code reading technology.
That is, the percentage of hospitals adopting the technology is modeled
as a standard normal cumulative distribution with 0 percent adoption in
year 0 and 100 percent adoption in year 20. The standard deviation of
the distribution is chosen to ensure at least 1 adoption during the
first year. This function has been used to describe rates of technology
acceptance for other new products. In the hospital sector, for example,
a study of medical technology infusion noted that complete unit dose
systems, complete IV (intravenous) admixture systems, and computerized
prescribed order entry (CPOE) systems have been accepted in this manner
(Ref. 11). Consequently, for 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 $7.0 billion (7 percent) or $9.0 billion (3 percent). The
estimated annualized cost is $657.2 million (7 percent) or $602.9
million (3 percent). As discussed in
[[Page 9159]]
section VII.F.4, the regulation would reduce hospital operating costs
because pharmacies would not apply in-house bar codes. In baseline,
hospitals installing bar code systems would incur these expenses.
Therefore, we expect that by the 17th year, annual operating costs for
this industry will be lower than those that would occur in the absence
of the regulation. Table 4 shows the annual incremental expenditures
for adopting hospitals expected under the final regulation.
Table 4.--Expected Incremental Hospital Expenditures by Year in Millions
------------------------------------------------------------------------
Incremental
Cost to
Evaluation Year Hospitals
Adopting
Bar Codes
------------------------------------------------------------------------
1 $0.8
------------------------------------------------------------
2 $13.5
------------------------------------------------------------
3 $102.8
------------------------------------------------------------
4 $426.8
------------------------------------------------------------
5 $1,039.3
------------------------------------------------------------
6 $1,624.0
------------------------------------------------------------
7 $1,852.3
------------------------------------------------------------
8 $1,751.9
------------------------------------------------------------
9 $1,478.0
------------------------------------------------------------
10 $1,129.6
------------------------------------------------------------
11 $772.4
------------------------------------------------------------
12 $466.6
------------------------------------------------------------
13 $243.0
------------------------------------------------------------
14 $104.9
------------------------------------------------------------
15 $32.6
------------------------------------------------------------
16 $0.5
------------------------------------------------------------
17 ($11.6)
------------------------------------------------------------
18 ($17.0)
------------------------------------------------------------
19 ($17.5)
------------------------------------------------------------
20 ($17.7)
------------------------------------------------------------------------
( ) indicates cost reduction from baseline to account for decreased in-
house packaging.
H. Reduction in Preventable Adverse Drug Events and Preventable Acute
Hemolytic Transfusion Reactions
The benefits of the rule are focused on the reductions in ADEs and
AHTRs that would follow the earlier use of bar code reading technology
and bar coded drug products. We have not quantified all the other
institutional benefits of computerized systems and medical informatics,
but have estimated a potential range of efficiency gains. Any ADEs
avoided during a year are analyzed as if they occur at the end of the
year.
ERG determined that under current conditions, about 1.25 million
ADEs occur each year in the United States, of which 373,000 are
preventable. As discussed above, the regulation 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 (Refs. 12 to
15 and 28). 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 the 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 x 0.5), which would currently prevent about 84,300
ADEs per year (373,000 x 0.226). This equals a reduction of 16.7
preventable ADEs per year for an average hospital. Section VII.O below
addresses the effect of alternative assumptions. Given projected
increases in hospital admissions, within 20 years, we expect 543,000
preventable ADEs in the absence of this regulation. This analysis
suggests that this regulation would prevent 123,000 ADEs, or 24.5 per
hospital during the 20th evaluation year. We believe the assumption
that bar code readers could intercept one-half of dispensing and
administration errors is reasonable and conservative, but specifically
tested this assumption as a sensitivity analysis.
Errors occur during any of the numerous steps in the production and
delivery of blood and blood components. Several studies (Refs. 8, 16,
and 27) have estimated that approximately 55 percent of transfusion
errors occur in patient areas and originate from phlebotomy errors or
incorrect patient identification. The machine readable information
required on human blood products will be readable by installed systems.
We expect bedside bar code systems to intercept 75 percent of these
errors based on published case studies of interception rates that vary
between 50 and 100 percent. Therefore, installation of bar code systems
in hospitals is expected to prevent 114 AHTRs (276 x 0.55 x 0.75), or
0.023 per hospital. During the 20th evaluation year, bar code systems
are expected to prevent 206 AHTRs (0.041 per hospital).
We estimate that the final rule, by stimulating earlier hospital
investment in bar code scanning systems, will reduce ADEs and AHTRs. To
project the aggregate number of ADEs and AHTRs avoided due to the final
rule, ERG calculated the number of ADEs and AHTRs 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 2,469 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 during the 10th year would intercept an estimated 52,600 errors,
taking into account expected increases in admissions as well (21.3 ADEs
per hospital x 2,469 hospitals), that would otherwise have resulted in
ADEs during that year. In addition, there would be 75 fewer AHTRs
because of the increased use of bar code systems during that year. Over
the entire evaluation period, this methodology predicts that the
accelerated investment would avoid over 501,300 ADEs and 700 AHTRs.
I. Value of Avoided ADEs and AHTRs
1. Value of Avoided ADEs
Estimating benefits requires estimating the value of the avoided
ADEs and AHTRs. FDA and ERG estimated two values of avoided preventable
ADEs. First, ERG estimated the avoided direct hospital 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 (Refs. 3, 5
and 29). 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,
[[Page 9160]]
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
1 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 (1 minus
0.95) x 0.005, or 0.0003 QALYs. There is no consensus on the best means
of valuing QALYs or the best estimates of willingness-to-pay for QALYs.
One approach is to derive the value from studies that estimate the
willingness-to-pay to avoid a statistical mortality risk. For example,
values derived from occupational wage-premiums to accept measurable
work-place risk are about $2 million to $10 million per statistical
death avoided, with a typical estimate of about $5 million.
Apportioning this value over the remaining life expectancy of the
average workforce member and adjusting for future disability implies
(at 7 percent discount rate) a value per QALY of about $373,000. If
using a 3 percent discount rate, the adjusted value per QALY is
estimated at about $213,000. Thus, in the example above, the value of
the decrease in QALYs due to minor drug toxicity would be $102 (7
percent) or $64 (3 percent).
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] resulted 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 $183,500 with a 7 percent annual discount rate. A 3 percent
annual discount rate would indicate a weighted average preference value
of $181,600. The derived values are similar because the contribution of
avoided mortality. We note that these values are very sensitive to the
number of fatal preventable ADEs.
2. Value of Avoided AHTRs
As for ADEs, AHTRs caused by erroneous transfusions might lead to
additional laboratory tests, extended hospital stays, and other direct
costs. ERG judged that these direct additional hospital costs would be
equivalent to those for ADEs and estimated them to equal $2,257 per
AHTR.
To estimate the monetary value of a change in QALYs resulting from
erroneous transfusions, ERG examined the range of potential reactions
experienced by patients that receive ABO-incompatible blood. As
reported in two studies (Refs. 7 and 27), almost half (47 percent) of
patients suffer no ill effects, and 3 percent of patients may die due
to an underlying condition. Most of the remaining half of patients may
experience fever, chills, chest pain, nausea or other relatively mild
symptoms for short durations. However, an AHTR may occasionally lead to
acute renal failure or death. The weighted average preference value for
each avoided AHTR is $101,200 using either 7 percent or 3 percent
discount rate. As for ADEs, this estimate is dominated by the high
value placed on mortality avoidance.
J. Aggregate Benefit of Avoiding ADEs and AHTRs
FDA and ERG estimated the benefit of avoiding ADEs and AHTRs due to
the use of bar code reading systems by multiplying the value of each
avoided preventable ADE and AHTR by the expected number of ADEs and
AHTRs avoided. As stated earlier, an average hospital is expected to
have fewer preventable ADEs and fewer preventable AHTRs each year under
current conditions after installing bar code reading technology. Within
20 years, these systems are expected to avoid 24.5 ADEs and 0.041 AHTRs
per hospital because of increased admissions. The direct cost savings
by avoiding treatment ($2,257 per ADE or AHTR) and the weighted
preference values ($183,500 per ADE and $101,200 per AHTR) indicate a
societal value of $185,800 per average ADE avoided and $103,500 per
average AHTR avoided (using 7 percent discount rate), and a societal
benefit of about $3.48 million per facility during the first evaluation
year. We multiplied this derived value per hospital by the expected
difference in the number of hospitals with installed bar code
technology under the rule. For example, during the 10th evaluation
year, an estimated 2,469 additional hospitals would have installed bar
code reading systems due to the rule. We would expect the increased use
of these systems to result in 51,500 fewer ADEs and 71 fewer AHTRs than
in the absence of the regulation. The estimated PV of avoiding these
ADEs and AHTRs during the 10th year is $4.9 billion (7 percent) or $7.1
billion (3 percent). The PV of the societal benefits that would result
from reductions in ADEs and AHTRs over the entire 20-year evaluation
period is $54.8 billion (7 percent). The annualized societal benefit of
the reduced number of ADEs and AHTRs is $5.2 billion at 7 percent
annual discount rate. Table 5 illustrates the expected reduction in
ADEs and AHTRs for the entire evaluation period. The PV for AHTR
avoidance alone is $42.2 million and annualized at $4.0 million at 7
percent.
Table 5.--Expected Reduction in ADEs and AHTRs by Year with Bar Code Societal Benefits in Millions (7 percent)
----------------------------------------------------------------------------------------------------------------
Additional ADEs Additional AHTRS Monetized Benefit of
Evaluation Year Avoided Avoided Gain in QALYS Avoided ADEs/AHTRs
----------------------------------------------------------------------------------------------------------------
1 37 0 57.7 $6.8
-----------------------------
2 595 1 928.4 $110.6
-----------------------------
[[Page 9161]]
3 4,566 6 7,129.2 $849.2
-----------------------------
4 18,171 25 28,369.0 $3,378.8
-----------------------------
5 46,364 64 72,384.5 $8,621.1
-----------------------------
6 72,898 101 113,808.7 $13,554.8
-----------------------------
7 83,230 115 129,938.8 $15,476.0
-----------------------------
8 79,083 110 123,464.9 $14,704.9
-----------------------------
9 66,933 93 104,495.8 $12,445.7
-----------------------------
10 51,528 71 80,445.8 $9,581.3
-----------------------------
11 35,521 49 55,455.9 $6,604.9
-----------------------------
12 21,828 30 34,078.4 $4,058.8
-----------------------------
13 11,732 16 18,316.0 $2,181.5
-----------------------------
14 5,493 8 8,575.2 $1,021.3
-----------------------------
15 2,232 3 3,484.2 $414.9
-----------------------------
16 774 1 1,208.6 $143.9
-----------------------------
17 239 0 373.5 $44.4
-----------------------------
18 58 0 90.3 $10.7
-----------------------------
19 12 0 18.3 $2.2
-----------------------------
20 0 0 0 $0
-----------------------------
Total 501,294 693 782,623.2 $93,211.8
----------------------------------------------------------------------------------------------------------------
Using a 3 percent discount rate, the PV of avoided ADEs and AHTRs
totals $73.0 billion with an average annualized equivalent of $4.9
billion. The benefit attributable to avoided AHTRs alone has a PV of
$56.8 million and an annualized value of $3.8 million using 3 percent
annual discount rate.
K. Cost Effectiveness of Bar Coding
In order to estimate the value of each ADE or AHTR avoided, ERG
estimated the decrease in QALYs that would be expected from each event.
As discussed in section VII.I.1, each ADE or AHTR avoided represents a
weighted average of potential outcomes. The weighted average decrease
in QALYs for an ADE was 1.56 QALYs and 0.87 for each AHTR. These
estimates imply that each avoided ADE would contribute 1.56 QALYs to
the public. As shown in Table 5, over the entire course of the
evaluation period, the number of avoided ADEs and AHTRs account for
782,623.2 QALYs gained. The PV of these QALYs gained equals 460,508
using a 7 percent discount rate and 618,861 using a 3 percent discount
rate.
Table 6 shows the cost-effectiveness per QALY gained at various
discount rates. The costs used to estimate the effectiveness include
the direct regulatory costs as well as increased expenditures by
hospitals. Cost-effectiveness shows that the regulation will require
costs of between $9,000 and $15,000 for each additional QALY gained.
Table 6.--Cost Effectiveness per QALY Gained
------------------------------------------------------------------------
Cost-Effectiveness Cost-Effectiveness
at 7 percent at 3 percent
------------------------------------------------------------------------
Undiscounted QALYs $9,009 $11,595
-------------------------------
QALYs Discounted at 7 percent $15,311 N/A
-------------------------------
QALYs Discounted at 3 percent N/A $14,663
------------------------------------------------------------------------
Note: Present value of costs are divided by the gain in QALYs. For
example, the present value of costs using a 7 percent discount rate is
approximately $7.05 billion. This amount, when divided by
approximately 782,600 QALYs, results in $9,009 per QALY ($9,008.43,
rounded up to $9,009).
[[Page 9162]]
L. 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 non-hospital
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 397 hours of pharmacist
resources and 5,694 hours of nursing resources each year. The estimated
annual efficiency savings of avoiding these opportunity costs equals
$218,300 for an average hospital. 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. Discussions with several hospital administrators
indicate that integrated bar code systems could result in reduced
``hallway'' time and improved communication. For example, nurses will
spend less time walking between a patient and the nursing station to
resolve discrepancies, and a bar code system would require complete
consistency of medication orders between pharmacy and nursing staffs.
In addition, bar code technology may achieve efficiencies in other
laboratories as well. If so, the total estimated annual efficiency
gains to an average hospital would range from $272,900 to $436,600 from
use of bar code scanners in pharmacies and patient care wards. If such
gains were obtainable, the PV of these gains for the sector as a whole
would be between $4.0 billion and $6.4 billion with a 7 percent annual
discount rate. The PV of this potential gain would be between $5.3
billion and $8.5 billion if a 3 percent discount rate is used in the
calculation. The average annualized gains of these potential
efficiencies are between $376.3 million and $602.0 million (at 7
percent), or $359.0 million and $574.2 million (at 3 percent).
The final rule could also increase the use of medical informatics
in locations other than hospitals. Health care facilities such as
physician offices, nursing homes, long-term care facilities 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. However, ERG's analysis of the
adoption of bar code technology in nursing homes and long-term care
facilities does not indicate a rapid adoption at this time.
According to the AHCA, there are 16,456 nursing homes in the United
States. ERG estimates the initial investment for an average nursing
home to install a bar code system to be $221,400 and to have annual
operating, maintenance, and net efficiency costs of $67,000. Most costs
are for purchasing laptop computers for nursing wards as well as
training costs. The major study of preventable ADEs in nursing homes
(Ref. 17) has estimated that there are only 10,373 preventable ADEs per
year in nursing homes attributable to dispensing or administration, or
less than 0.67 preventable ADEs per facility. If the use of a bar code
system could intercept 50 percent of these ADEs, the benefit per
facility per year would equal 0.32 ADEs. There are strong indications
that these estimates of prevented ADEs are conservative because the
study is based on voluntary reporting.
Comparisons between the drug classes associated with ADEs in
nursing homes (Refs 17 and 18) and those in hospitals resulted in a
distribution of expected outcomes of ADEs different than those in
hospitals. For example, Bates (Ref. 2) found that 38 percent of all
preventable ADEs were associated with analgesics and antibiotics, while
in nursing homes, only 13 percent of all ADEs were associated with
these drug classes. Using the distribution of drug classes associated
with preventable ADEs in nursing homes, the weighted average value of a
prevented nursing home ADE was $43,200 (7 percent) and $63,700 (3
percent). These estimated values are based on very limited analyses
conducted to date in nursing homes.
Forecasted adoption rates for nursing homes resulted in PV of costs
of $3.8 billion and PV of benefits of only $0.5 billion (7 percent). At
3 percent the PV of costs to nursing homes was $4.9 billion while the
PV of ADE avoidance was only $0.6 billion. With profit margins so
slight in this industry, we do not believe the technology will be
rapidly adopted at this time in spite of the accessibility of bar coded
products. We emphasize the current scarcity of data on ADEs in nursing
homes. The definition of ``preventability'' used to analyze ADEs in
hospitals may not transfer to these settings, which may severely under
estimate the potential benefit. However, we cannot project impacts of
this rule for this industry at this time.
M. 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 (Ref. 19), 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 were for pregnancies with the remainder including surgical
claims, misdiagnosis, and medication errors. If these claims are
distributed equally by type (surgical, diagnosis, or medication errors)
and sector (inpatient or outpatient), we estimate that about 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 373,000). The
average jury award for damages from medication errors was $636,800 in
2000, although only 40 percent of cases were decided for plaintiffs.
Estimated average pre-trial settlements for malpractice claims in 2000
totaled $318,400. We do not have data on the proportion of settlements,
but have assumed 80 percent of claims are settled prior to trial. If
so, the average likely award per preventable ADE is $492. Current bar
code systems are expected to avoid 16.7 ADEs per year in an average
hospital. This implies an average reduction in annual legal awards of
$8,200 per hospital and $41.4 million for all hospitals. Fewer awards
would result in lower malpractice insurance premiums, which would
reduce other hospital expenditures. The General Accounting Office (Ref.
20) 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 about $4,228 to $11,435 per bed
(Ref. 21). Although only a weak relationship has been established
between negligent acts and the incidence of malpractice claims (Refs.
22 to 24), we attempted to estimate the potential size of any impact on
premiums. Rothchild et al (Ref. 25) estimated that only 6.3 percent of
all malpractice claims were the result of ADEs. Given the distribution
of ADEs in
[[Page 9163]]
the medication process, we expect a 50 percent reduction in ADEs caused
by distribution and administration errors to reduce premiums by 0.55
percent, or $49 per bed to the average hospital. The total expected
saving would be $8,330 per hospital and $42.0 million for all
hospitals. 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 (Ref. 26) 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 about $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.
N. Comparison of Costs, Expenditures, and Benefits
The increase of over 780,000 QALYs over the evaluation period as a
result of avoiding over 500,000 ADEs and AHTRs has a monetized present
value of $54.8 billion (discounting at 7 percent) and $73.0 billion
(discounting at 3 percent). This section compares the expected benefits
of the regulation to the costs and expected expenditures discussed
earlier.
The annualized costs of the final rule to the manufacturing,
packaging, and labeling sectors totals $5.4 million (7 percent) or $4.1
million (3 percent). Hospitals would be required to incur an annualized
cost of $0.6 million to continue current operating practices (7
percent) or $0.4 million (3 percent). FDA's resource costs to support
the regulation equal an estimated $2.4 million per year. Thus, we
estimate the annualized regulatory cost of the regulation to be $8.4
million (7 percent) and $6.9 million (3 percent). In addition, we
expect the 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 $660
million (7 percent) for the entire industry, or $600 million with a 3
percent discount rate. Table 7 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 for both discount rates. The estimated
reduction in hospital operating expenses results from the assumption
that hospitals could eliminate in-house labeling operations once
products have uniform bar code information.
Table 7.--Costs and Other Expected Expenditures of the Final Rule
----------------------------------------------------------------------------------------------------------------
Present Value Annual Operating Costs Annualized
Industry Sector of Costs at End of Period Costs
----------------------------------------------------------------------------------------------------------------
(in millions of dollars; 20-year evaluation period; 7-percent discount rate)
----------------------------------------------------------------------------------------------------------------
Prescription Drugs $33.6 $0.4 $3.2
--------------------------------------------------------
OTC Drugs $23.3 $0.3 $2.2
--------------------------------------------------------
Blood Products N/A N/A N/A
--------------------------------------------------------
Sub-Total Manufacturers $56.9 $0.7 $5.4
--------------------------------------------------------
Hospital Regulatory $6.4 (-$0.2)** $0.6
--------------------------------------------------------
Sub-Total Private Sector Regulatory Costs $62.3 $0.5 $6.0
--------------------------------------------------------
FDA Oversight $25.4 $2.4 $2.4
--------------------------------------------------------
TOTAL REGULATORY COSTS $87.7 $2.9 $8.4
--------------------------------------------------------
EXPECTED EXPENDITURES FROM HEALTH CARE SECTOR $6,961.6 (-$17.7)** $657.2
--------------------------------------------------------
(in millions of dollars; 20-year evaluation period; 3-percent discount rate)
----------------------------------------------------------------------------------------------------------------
Prescription Drugs $37.0 $0.4 $2.5
--------------------------------------------------------
OTC Drugs $23.8 $0.3 $1.6
--------------------------------------------------------
Blood Products N/A N/A N/A
--------------------------------------------------------
Sub-Total Manufacturers $60.8 $0.7 $4.1
--------------------------------------------------------
Hospital Regulatory $5.5 (-$0.2)** $0.4
--------------------------------------------------------
Sub-Total Private Sector Regulatory Costs $66.3 $0.5 $4.5
--------------------------------------------------------
FDA Oversight $35.7 $2.4 $2.4
--------------------------------------------------------
TOTAL REGULATORY COSTS $102.0 $2.9 $6.9
--------------------------------------------------------
[[Page 9164]]
EXPECTED EXPENDITURES FROM HEALTH CARE SECTOR $8,971.4 (-$17.7)** $602.9
----------------------------------------------------------------------------------------------------------------
*Less that $0.05 million
**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 $5.2 billion (7 percent) and $4.9 billion (3 percent).
This estimate includes the societal value of the avoided ADEs and AHTRs
as well as the reduced hospital stays expected due to the earlier use
of bar code reading technology. We estimate other indirect potential
benefits, such as efficient inventory control, patient tracking,
electronic generation of daily reconciliation and medication reports,
or other administrative gains, to contribute an annualized amount of
between $376.3 and $602.0 million in efficiency gains to hospitals (7
percent) and between $359.0 and $574.2 million (3 percent). The likely
distributional effects of revenue enhancement, other cost capture
measures, or reduced legal costs are not included in this comparison.
If all costs and expenditures are combined, the annualized outlays
total $665.6 million (7 percent) and $609.8 million (3 percent). The
expected annualized public safety benefit of over $5.2 billion (7
percent) and $4.9 billion (3 percent) far outweighs these outlays.
Thus, the annual net benefits for the entire evaluation period are
between $4.5 billion (7 percent) and $4.3 billion (3 percent). The
expected cost effectiveness varies between $9,000 and $15,300 for each
QALY gained, depending on the discount rate used. Moreover, this
calculation does not account for the potential efficiency gains as
described above.
O. Uncertainty and Sensitivity
We recognize that the expected impacts of the regulation are based
on a large number of uncertain assumptions. We attempted to account for
this uncertainty by examining the key assumptions in the analysis.
Table 8 summarizes the results of our analyses.
Table 8.--Summary of Uncertainty and Sensitivity Analyses
----------------------------------------------------------------------------------------------------------------
Base Case Alternative Effect on Annualized Net Total Annualized Net
Variable Assumption Assumption Benefits (7 percent) Benefit (millions)
----------------------------------------------------------------------------------------------------------------
Voluntary Share of 50 percent None -$2.1 million $4,498.00
Labeling Costs
-----------------------
50 percent 100 percent +$2.1 million $4,502.00
-----------------------
Impact of Regulation N/A N/A No Impact Expected $4,500.00
On Unit of Use
Package
-----------------------
Implementation Period 2 Years 1 Year -$0.1 million $4,500.00
-----------------------
2 Years 3 Years +$0.1 million $4,500.00
-----------------------
Mortality Probability 2.8 percent 1.0 percent -$2.6 billion $1,900.00
With ADE
-----------------------
2.8 percent 0.1 percent -$3.8 billion $700.00
-----------------------
Value of QALY/VSL $373,000/QALY $100,000/QALY -$3.2 billion $1,300.00
$5 million/VSL $2 million/VSL
-----------------------
Boundary Analysis N/A N/A Breakeven point requires N/A
gain of 103 years of
hospital use of bar
code technology as
compared to baseline
-----------------------
Hospital Rate of 20 year baseline 30 year baseline -$1.3 billion $3,200.00
Adoption of Bar Code 10 year with 20 year with
Systems regulation regulation
-----------------------
20 year baseline 20 year baseline -$2.9 billion $1,600.00
10 year with 15 year with
regulation regulation
-----------------------
Increase in 50 percent 20 percent -$3.1 billion $1,400.00
Interception Rate
Attributable to Bar
Codes
-----------------------
50 percent 80 percent +$3.1 billion $7,600.00
-----------------------
Loss of Nursing 3 percent 1 percent +$420 million $4,900.00
Productivity
-----------------------
[[Page 9165]]
3 percent 5 percent -$520 million $4,000.00
-----------------------
Small Hospital N/A N/A Annual net benefits of N/A
Adoption adoption of bar code
systems for hospitals
with 50 or fewer beds
estimated at $47,000
per hospital.
----------------------------------------------------------------------------------------------------------------
1. Voluntary Share of Labeling Costs
The costs attributable to the final 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 50 percent of the required labeling
costs would be attributable to the final rule, 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 regulatory 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 or
all re-labeling costs were attributable to the final rule. ERG found
that these scenarios altered the current estimate of $5.4 million in
annualized costs for manufacturers, repackers, relabelers, and private
label distributors (7 percent) to a range of from $3.3 million (if all
costs are considered voluntary) to $7.5 million (if no additional
labeling costs are considered voluntary). Using a 3 percent discount
rate, the annual labeling costs to manufacturers could vary from
between $2.6 million and $6.1 million.
2. Packaging Decisions
We are sensitive to industry packaging decisions and asked our
contractor to specifically assess the impact of the regulation 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 final rule will not have
a significant impact on product packaging choices.
3. Implementation Period
We were interested in the effects of shortening or lengthening the
implementation of the regulation. However, discussions with hospital
administrators indicated that the adoption rate of bar codes would not
be noticeably accelerated with shorter implementation period. They felt
that it was unlikely that investments would be made earlier. Therefore,
benefits would be unlikely to change whether the implementation period
was longer or shorter. The regulatory costs of compliance would
increase with shorter implementation periods. At a 7-percent annual
discount rate, the average annualized regulatory cost would increase
from $8.4 million with a 2-year implementation period to $8.5 million
with a one-year implementation period and decrease to $8.3 million with
a 3-year period.
If a 1-year implementation date persuaded one hospital to invest 1
year earlier, 16.7 ADEs could be avoided. The value of avoiding these
events is $3.1 million. In comparison, if a hospital invested in a bar
code reading system a year earlier than it otherwise would have, it
would have increased costs of about $620,000 based on amortization of
investment and one additional year of operating costs. The net benefit
($2.5 million), when amortized over 20 years, would result in average
annualized benefits of over $0.2 million. This is greater than the
average annualized cost of the shorter implementation period. However,
as noted earlier, discussions with hospital administrators and budget
planners have not indicated that a shorter implementation period would
have an effect on these investment decisions.
4. Value of Mortality Associated with ADEs
ERG estimated that 2.8 percent of preventable ADEs and 2 percent of
all AHTRs 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: 1 percent and 0.1
percent. These rates reduce the expected value of an avoided ADE from
$185,800 to $93,700 and $48,400, respectively, by changing the
probability distribution of the expected outcomes of ADEs. The impact
on the expected annualized benefits of ADE avoidance falls from $5.2
billion to $2.6 billion and $1.4 billion respectively. These estimated
benefits continue to exceed the costs.
5. Value per QALY
There is no precise measure of value for a quality-adjusted life-
year. We have used average 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 basis
for most of the wage premium data) was adjusted for expected future bed
and non-bed 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) implies societal willingness-to-pay for a
QALY. Cost-effectiveness studies have claimed that lower values, as low
as $100,000, may better represent QALYs. In addition, the VSL value is
based on research conducted in the early 1990's and relies on relative
risk and relative wages. Other estimates of VSL have ranged
[[Page 9166]]
from as low as $2 million to as high as $10 million.
We analyzed the societal benefit of the regulation using $100,000
as the QALY value and the low VSL estimate ($2 million) as the
representative of societal willingness to pay (WTP) to avoid the
probability of a fatality. The WTP to avoid an ADE decreased from
$185,800 to $71,600 using these parameters. Overall, the annualized
benefit of the proposed regulation fell from $5.2 billion to $2.0
billion.
6. Boundary Analysis
We analyzed the minimum number of hospital-years of bar code
adoption necessary for estimated benefits to exceed costs. The
regulatory costs of the regulation account for only 0.2 percent of the
net societal benefits. This implies that the regulation would need to
encourage early adoption of bar code technology by at least 0.2 percent
in order for benefits to exceed costs. In baseline, we expect 51,410
hospital-years of installed bar codes. (The 101 current user of bar
code systems will use it for all 20 years, the remaining 4,939
hospitals will have installed systems for an average of 10 years each.)
The regulation would have to encourage 103 additional hospital-years
(0.02 percent). This could occur by 103 hospitals investing 1 year
earlier than they would in baseline.
7. 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 rule. However, because we are not requiring
hospitals to make this investment, we examined the impact of different
diffusion rates. ERG examined 2 additional scenarios; one in which the
technology is accepted within 20 years with a rule as compared to 30
years without a rule as well as one in which technology is accepted
within 15 years as compared to 20 with the rule. Both cases decrease
costs and benefits. The first case reduced expected annualized net
benefits from $4.5 billion to $3.2 billion. Annualized hospital
expenditures declined from $657 million to $493 million and benefits
decreased from $5.2 billion to $3.7 billion. The second case reduced
annualized net benefits to $1.6 billion. Annualized hospital
expenditures declined from $657 million to $320 million and benefits
decreased from $5.2 billion to $1.9 billion. The public health benefits
of the rule would still exceed costs and expenditures with these slower
diffusion rates.
8. Hospital Intercept Rates with Machine-Readable Technology
Avoidance of patient ADEs depends 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 non-optimal 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 805,700
and 198,500. The monetized annualized value of these avoided ADEs would
vary from the current estimate of $5.2 billion to the lower and higher
values of $2.1 billion (with a 20 percent improvement in interception
rates) or $8.3 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.
9. 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 (see section VII.G). 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
$657.2 million to $238.4 million. However, if the productivity loss of
nursing resources were 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.
10. 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 1,218 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 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
about $69,200. 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 2.2 avoided ADEs per
year per facility. The estimated societal benefit of avoiding 2.2 ADEs
is $408,800. If these small hospitals adopt technology at the same
accelerated rate as all hospitals, the annualized benefit per hospital
is $116,900, 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 $4,965 (2.2 ADEs avoided x $2,257) and annualized costs of
$69,200. 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 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.
[[Page 9167]]
P. Small Business Analysis and Discussion of Alternatives
We believe the final rule is unlikely have a significant impact on
a substantial number of small entities. Despite this, in the proposed
rule, we prepared an initial Regulatory Flexibility Analysis (IRFA) and
invited comment from affected entities. In addition, the final rule 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 final rule directly affects manufacturers of pharmaceutical and
biological products (NAICS 325412 and NAICS 325414), packaging services
(NAICS 561910), and indirectly affect hospitals (NAICS 622). The
regulation does not affect blood and organ banks (NAICS 621991). We
accessed data on these industries from the 1997 Economic Censuses and
estimated revenues per establishment. Although other economic measures,
such as profitability, may provide preferable alternatives to revenues
as a basis for 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 pursuant to 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 label products with bar coded information. We
estimate the annual compliance costs for small entities in this
industry at $600 per entity. This is less that 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 costs 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 that has less than $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 currently
apply bar coded information to all blood products and would not be
affected by this regulation.
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 regulation. We anticipate that the rule would make
the investment in bar code technology more attractive to hospitals, but
the final rule does not require hospitals to make such investments.
Hospitals that have already installed bar code reading systems and
internally affix self-generated information might find it necessary 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 regulation is estimated at $3,300 per
facility, which is equal to 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.
2. Alternatives
We considered several alternatives to the regulation. Each is
discussed below.
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 rule.
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 the potential public health benefits of this
additional information and the estimated additional annualized cost of
this alternative was $59.1 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
rejected because the additional costs do not appear to be justified by
the expected benefits. At this time, most non-institutional 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 $0.7
million. The expected annualized regulatory costs of the regulation
therefore would increase from the current estimate of $8.4 million to
$9.1 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. We will consider exemptions on
[[Page 9168]]
a product basis, not on the size of the affected entity.
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 alternative would be much greater than the selected
alternative. Annualized costs to manufacturers would increase to $19.0
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 $27.6
million. Consequently, we rejected the alternative of identifying a
specific symbology.
3. Outreach
We conducted 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.
We also received over 190 comments on the proposed rule.
4. What Comments Did We Receive on Our Economic Analysis?
Several comments focused on the proposed rule's ``Analysis of
Impacts'' discussion. The analysis summarized the rule's costs and
benefits.
(Comment 76) The preamble to the proposed rule estimated that 4,229
packaging lines are used in 1,447 establishments (68 FR at 12519). One
comment disagreed with this estimate. The comment, submitted by a
medical gas firm, claimed that the rule would affect more than 1,000
members of the gases and welding distributors association and that 600
members package or distribute medical gases. The comment said there are
approximately 10 major manufacturers of medical gas products in the
United States, and many either own or control approximately 200
locations that repackage or distribute medical gas.
(Response) We agree that the proposed rule did not take this
industry into account. However, because the final rule exempts medical
gases from the bar code requirement, we do not need to adjust our
analysis.
(Comment 77) The preamble to the proposed rule estimated the
present value of the total costs to manufacturers, repackers,
relabelers, and private label distributors as $33.2 million and average
annualized costs of $3.2 million (68 FR 12520 through 12521).
Several comments claimed this estimate was too low. One comment
from a medical gas firm said implementing the rule would cost $5
million for one firm and that annual maintenance and material costs
cannot be accurately determined. The comment said that the cost to the
medical gas industry alone would be over $100 million.
Two comments from allergenic extract firms also claimed high costs.
One comment said that the firm would need to add 800 new NDC numbers
and create new labels for its products. The comment claimed that the
new labels would have to be printed by another company and it projected
those costs as being $37,000 for required equipment and artwork,
$39,000 for 640 hours of computer programming time to test and validate
the new label format, $17,000 for inventory control, purchasing, and
regulatory personnel time for internal control of each label and
package change (based on an estimate of more than 530 hours at $31 per
hour), $18,000 for changes in their standard operating procedure, and
``unknown, but substantial'' costs for locating a new vendor to prepare
the new labels. The comment said these costs would be three or four
times the firm's current $4,000 label costs and estimated its total
costs as approximately $120,000. Another firm estimated its total cost
as $166,500, excluding ``unknown, but substantial hidden costs required
due to the small nature of some of our final containers.''
Three comments from pharmaceutical companies and a trade
association also claimed the industry cost estimate was low. The
comments said that manufacturers would have to purchase new or upgraded
equipment to print high quality bar codes. One comment said that
manufacturers would have to upgrade existing packaging equipment or buy
new equipment, and those purchases would result in substantial
investments that would exceed FDA's initial cost estimates.
(Response) We agree that specific firms will experience higher
compliance costs than the average costs presented in the proposal and
discussed in Reference 1 in the docket. However, ERG interviewed many
companies, vendors, and industry consultants to arrive at their
estimates of the incremental compliance costs for the affected
industry. We agree that costs to medical gas and allergenic extract
manufacturers were not explicitly accounted for in the proposal and
that these industries are exempted from the final rule. We believe the
methodology described in Reference 1 results in reasonable incremental
costs of the final rule to industry. Our interviews with industry
consultants have noted that many pharmaceutical manufacturers either
currently use bar codes in their labels or are in the process of
voluntarily applying bar codes. The costs attributable to the final
rule are only those costs incurred in addition to voluntary costs. We
disagree that the cost estimates to manufacturers, repackers,
relabelers, and private label distributors do not reflect typical costs
to typical firms.
(Comment 78) The preamble to the proposed rule estimated the
regulatory costs to hospitals as being $6.1 million, with an average
annualized cost of $0.6 million (68 FR 12521). One comment disagreed
with this estimate, claiming that the rule would be very expensive for
small State mental hospitals because manufacturers will pass on their
costs to customers, and because wireless equipment (for reading the bar
codes) will be even more expensive. The comment added that increases in
package size will mean that automated drug dispensing machines will
have to be stocked more frequently or small hospitals will have to
carry more floor stock that is not controlled by such machines, which
will reduce patient safety.
(Response) We disagree that the final rule will be very expensive
for small hospitals. The final rule does not require small hospitals to
invest in bar code technology, and we recognize that any such decision
will be affected by individual circumstances. ERG did not find
definitive evidence that regulatory costs are automatically passed on
to customers, and we have analyzed these costs at the manufacturer
level. In addition, we found no indication that
[[Page 9169]]
package sizes would definitely change as a result of this regulation.
RSS symbology could be used so that no changes would occur in package
size. We examined the impact of bar code technology on small hospitals
as a sensitivity analysis.
(Comment 79) The preamble to the proposed rule mentioned that the
American Hospital Association had stated that bar codes would help
streamline payment, billing, and administrative systems and lead to
efficient management of assets and resources (68 FR 12520).
One comment said that most inpatient reimbursement involves a high
proportion of Medicare and Medicaid patients under a prospective
payment or per diem basis, so increased accuracy of charge does not
necessarily result in increased revenue. The comment said that costs
associated with implementing bar code scanning would not be offset by
increased reimbursement.
(Response) The comment may have misinterpreted the preamble to the
proposed rule. We did not claim that bar codes would increase hospital
revenue due to increased accuracy in billing. While we did present
results that indicated the possibility of increased cost capture rates
in the preamble, those distributive effects did not indicate
reimbursement. Instead, the preamble to the proposed rule focused on
cost savings in avoiding adverse drug events (68 FR at 12527), and we
recognized that the estimated direct annual hospital cost saving of
avoiding unnecessary treatment might not cover the costs of earlier
investments. We stated that a hospital's decision to acquire and use
bar code technology could be affected by the hospital's size. We only
noted that increased reimbursement might be an additional benefit of
the technology.
(Comment 80) The preamble to the proposed rule stated that the rule
would result in premature replacement of scanners currently used in
hospital pharmacies and treatment wards (68 FR at 12521). We estimated
that the present value of the incremental costs of accelerated scanner
replacement or upgrade to be approximately $13.7 million, with an
average annualized cost to hospitals of early replacement of $1.3
million.
One comment claimed that the ``half-life'' of scanners is less that
the proposed rule's 3-year implementation window. The comment claimed
``at least half of all scanners currently in use will have been retired
or replaced'' by the time we would require all drugs to have a bar
code. The comment said the remaining scanners would have some useful
life remaining and could be used for other purposes.
(Response) We agree with this comment. The estimate of expected
costs of replacing scanners in hospitals uses the expected useful life
of scanners and the costs of upgrading current scanners. ERG estimated
that scanners are replaced within 5 years. After the implementation
period, scanners that do not have the capability to read RSS symbology
that have not been replaced must be either replaced or upgraded. This
was explained in Reference 1.
(Comment 81) One comment from a pharmaceutical manufacturer said
that the health care system would not benefit if hospitals are forced
to pay more for bar-coded products before they have systems in place to
use those bar codes. The comment argued that hospitals should be able
to keep buying OTC drugs at the lowest cost (usually the largest
package size and without a bar code). The comment said this would let
hospitals keep their costs down while they invest in bar code
technology.
(Response) The comment misinterpreted the proposed rule. Neither
the proposed rule nor the final rule requires hospitals to purchase
only bar-coded OTC drugs. Hospitals will continue to be free to make
purchasing decisions based on criteria that are best for individual
facilities.
(Comment 82) One comment said that there was little analysis of the
implementation costs on those who would use the bar codes other than to
estimate that the speed of adoption will double. The comment said we
should evaluate the implementation costs.
(Response) We disagree with this comment. ERG and FDA have
conducted detailed analyses to estimate implementation costs to users.
These analyses are available in Reference 1, in the docket for the
proposed rule, and summarized in the Analysis of Impacts.
(Comment 83) The preamble to the proposed rule considered various
regulatory alternatives, including selection of a specific symbology
(68 FR 12529).
One comment supported requiring the use of DataMatrix, claiming
that DataMatrix has a minimal cost difference to implement when
compared with linear bar coding symbologies, and that such costs will
continue to decline. The comment claimed that 70 percent of packaging
lines are already DataMatrix capable, and this would allow
implementation at the lowest cost and in the shortest time.
(Response) Although the comment discussed DataMatrix in the context
of our economic analysis, the comment's focus is the use of DataMatrix
rather than a linear bar code. We discuss issues regarding linear bar
codes and other technologies, including DataMatrix, at comment 38, and
we refer to our response there to explain why the final rule continues
to require a linear bar code.
Q. Conclusion
We have examined the regulation and find that the expected benefits
outweigh the costs and that the regulation would improve public health.
Reference 1 provides a detailed analysis that includes references and
support for the assumptions and estimates of this section.
R. References
The following references have been placed on display in the
Division of Dockets Management (see ADDRESSES) and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
(FDA has verified the Web site address, but FDA is not responsible for
any subsequent changes to the Web sites after this document publishes
in the Federal Register.)
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29. 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 and 29, 1997.
30. Ernst, F. R. and A. J. Grizzle, ``Drug Related Morbidity and
Mortality: Updating the Cost-of-Illness Model,'' Journal of the
American Pharmaceutical Association, 41:192-199, March/April 2001.
31. Bates, D. W. et al., ``The Cost of Adverse Drug Events in
Hospitalized Patients,'' Journal of the American Medical
Association, 277:301-311, January 22 and 29, 1997.
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.
0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR parts
201, 606, and 610 are amended as follows:
PART 201--LABELING
0
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.
0
2. Section 201.25 is added to read as follows:
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 over-the-counter (OTC) drug product
that is regulated under the Federal Food, Drug, and Cosmetic Act or the
Public Health Service Act are subject to these bar code requirements
unless they are exempt from the registration and drug listing
requirements in section 510 of the Federal Food, Drug, and Cosmetic
Act.
(b) What drugs are subject to these bar code requirements? The
following drug products are subject to the bar code label requirements:
(1) Prescription drug products, however:
(i) The bar code requirement does not apply to the following
entities:
(A) Prescription drug samples;
(B) Allergenic extracts;
(C) Intrauterine contraceptive devices regulated as drugs;
(D) Medical gases;
(E) Radiopharmaceuticals; and
(F) Low-density polyethylene form fill and seal containers that are
not packaged with an overwrap.
(ii) The bar code requirement does not apply to prescription drugs
sold by a manufacturer, repacker, relabeler, or private label
distributor directly to patients, but versions of the same drug product
that are sold to or used in hospitals are subject to the bar code
requirements.
(2) Biological products; and
(3) OTC drug products that are dispensed pursuant to an order and
are commonly used in hospitals. For purposes of this section, an OTC
drug product is ``commonly used in hospitals'' if it is packaged for
hospital use, labeled for hospital use (or uses similar terms), or
marketed, promoted, or sold to hospitals.
(c) What does the bar code look like? Where does the bar code go?
(1) Each drug product described in paragraph (b) of 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
European Article Number/Uniform Code Council (EAN.UCC) or Health
Industry Business Communications Council (HIBCC) 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 Federal Food, Drug, and Cosmetic Act.
(d) Can a drug be exempted from the bar code requirement?
(1) On our own initiative, or in response to a written request from
a manufacturer, repacker, relabeler or private label distributor, we
may exempt a drug product from the bar code label requirements set
forth in this section. The exemption request must document why:
(i) compliance with the bar code requirement would adversely affect
the safety, effectiveness, purity or potency of the drug or not be
technologically feasible, and the concerns underlying the request could
not reasonably be addressed by measures such as package redesign or use
of overwraps; or
[[Page 9171]]
(ii) an alternative regulatory program or method of product use
renders the bar code unnecessary for patient safety.
(2) Requests for an exemption should be sent to the Office of New
Drugs (HFD-020), Center for Drug Evaluation and Research, Food and Drug
Administration, 5600 Fishers Lane, Rockville, MD 20857 (requests
involving a drug product) or to the Office of Compliance and Biologics
Quality (HFM-600), Center for Biologics Evaluation and Research, Food
and Drug Administration, 1401 Rockville Pike, Rockville, MD 20852
(requests involving a biological product).
PART 606--CURRENT GOOD MANUFACTURING PRACTICE FOR BLOOD AND BLOOD
COMPONENTS
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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.
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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 in a format
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, repack, 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
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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.
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6. Section 610.67 is added to read as follows:
Sec. 610.67 Bar code label requirements.
Biological products must comply with the bar code requirements at
Sec. 201.25 of this chapter. However, the bar code requirements do not
apply to devices regulated by the Center for Biologics Evaluation and
Research or to blood and blood components intended for transfusion. For
blood and blood components intended for transfusion, the requirements
at Sec. 606.121(c)(13) of this chapter apply instead.
Dated: January 6, 2004.
Mark B. McClellan,
Commissioner of Food and Drugs.
Dated: February 4, 2004.
Tommy G. Thompson,
Secretary of Health and Human Services.
[FR Doc. 04-4249 Filed 2-25-04; 8:45 am]
BILLING CODE 4160-01-S