FDA mandates bar codes on drugs used in hospitals

Ruling will require an estimated $7B hospital tech upgrade

The Food and Drug Administration, after a year of deliberation (see story), issued a final ruling yesterday that requires pharmaceutical companies to apply bar codes to thousands of prescription and over-the-counter drugs dispensed in hospitals. The agency believes the move will save lives by reducing medical errors but estimated that it would hit the nation's 6,000-plus hospitals with a $7 billion technology bill.

"Bar codes can help doctors, nurses and hospitals make sure that they give their patients the right drugs at the appropriate dosage," Tommy Thompson, secretary of Health and Human Services, said in a statement. "By giving health care providers a way to check medications and dosages quickly, we create an opportunity to reduce the risks of medication errors that can seriously harm patients."

The rule goes into effect for all existing drugs two years after publication in the Federal Register, which takes 60 days. The rule will apply to all new drugs in 60 days.

The FDA said the bar-code rule is designed to support and encourage widespread adoption of advanced information systems that, in some hospitals, have reduced medication error rates by as much as 85%. In these hospitals, each patient is provided with a bar-coded identification bracelet. A nurse scans the patient's bar code and the drug's bar code. The information system then compares the patient's prescription information with the drug data to verify that the patient is receiving the right drug and right dosage, and at the right time.

The FDA said a study conducted at a Department of Veterans Affairs Medical Center using a drug bar-code scanning system showed that 5.7 million doses of medication were administered to patients with no medication errors.

"We're encouraging widespread use of technologies that can help health care providers avoid hundreds of thousands of medication errors," said FDA Commissioner Mark B. McClellan.

Last week, the FDA said it believed that radio frequency identification technology was the best way to track prescription drugs at the case and pallet level to prevent counterfeiting (see story). . The agency said it expected widespread use of RFID technology by the pharmaceutical industry by 2007. The FDA said it believed bar codes are the "established and proven technology" with no impediments to their use in hospitals.

However, the FDA has concerns that RFID tags and readers could cause electromagnetic interference with medical devices used in hospitals and believes this needs to be investigated. Hospitals also don't need the track-and-trace capabilities for the entire supply chain that are built into RFID to ensure that the right drug is given to the right patient. But the FDA said it would consider revising its ruling to accommodate new technologies, such as RFID, in the future.

Hospitals backed the ruling. Nancy Foster, senior associate director for policy at the American Hospital Association in Washington, said in a statement, "We applaud the FDA for publishing this final rule on bar coding. Hospitals share the belief that bar coding is an effective technology that can be used to reduce medication errors, and the FDA's rule will standardize the use of bar codes on drugs and biologics so that bar-code scanning equipment can be used more broadly and consistently to help protect patients from missteps in their care."

Although the FDA ruling doesn't require hospitals to install bar-code scanning systems, it believes the ruling will spur the use of the technology in hospitals. Kenneth Kleinberg, senior director of the global health care division at Symbol Technologies Inc. in Holtsville, N.Y., said the ruling resolves the "chicken and egg" problem, which has stalled widescale use of bar-coding technology to identify drugs in hospitals.

Kleinberg said pharmaceutical manufacturers were reluctant to apply bar codes because hospital didn't have the readers to use the bar codes. Meanwhile, hospitals didn't install the readers because the drugs weren't labeled. Kleinberg said the ruling would spur a huge investment in wireless LAN infrastructure in all U.S. hospitals to support bar code readers. He estimated that only 10% of U.S. hospitals have installed enterprisewide WLAN systems, and another 35% have installed WLANs on some of their patient floors.

Kleinberg estimated that the average large hospital would have to install hundreds of WLAN access points to pick up the signals from the portable bar-code readers. He said a hospital would have to spend $200,000 to install WLAN hardware to support reading of bar-coded drugs.

If the FDA decides to mandate or allow use of RFID tags, Kleinberg said the industry will be ready with dual bar code/RFID readers. Barry Heib, an analyst at Gartner Inc. in Stamford, Conn., said he expects that eventually RFID will be the technology of choice throughout the pharmaceutical supply chain, but for not for a number of years. He expects hospitals to use bar-code technology over the next four years and switch to RFID once that technology matures.

Gary Jump, CIO at Our Lady of the Lake Hospital in Baton Rouge, La., said that while he hasn't read the entire document, he views the FDA ruling as a "tremendous opportunity" to use technology to eliminate medical errors. But, he added, it will provide savings to hospitals only if the ruling required manufacturers to apply bar codes to single-unit doses.

John Hummel, CIO at Sutter Health in Sacramento, said the ruling does require bar-code labels on single-unit doses, which would save him the cost of buying drugs in bulk and then repackaging them in single dose, bar-coded plastic bags. Sutter currently repackages 13 million doses a year. Hummel estimated that the ruling would save him $2 million a year in repackaging costs.

Sutter is in the midst of a massive hardware upgrade to support drug bar-code reading, including the purchase of 6,000 mobile cart-mounted computers that will be used by nurses in 26 hospitals to manage the drug-tracking process. Hummel said hospitals that install WLANs to support the bar-code ruling can also use that infrastructure to support other technologies, such as wireless voice-over-IP phones, which Sutter is testing.

The bottom line of the bar-code ruling, Hummel said, is a reduction in medical errors, which in turn will help save patients' lives. The FDA estimated that this in turn would reduce the high cost of litigation from such errors, which average just under $700,000 per settlement.

Copyright © 2004 IDG Communications, Inc.

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