03.01.2014 Views

The Case for Global Standards - GS1

The Case for Global Standards - GS1

The Case for Global Standards - GS1

SHOW MORE
SHOW LESS

Create successful ePaper yourself

Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.

Title<br />

<strong>The</strong> <strong>Case</strong><br />

<strong>for</strong> <strong>Global</strong> <strong>Standards</strong><br />

prepared <strong>for</strong> <strong>The</strong> <strong>GS1</strong> <strong>Global</strong> Healthcare Users Group<br />

(<strong>GS1</strong> HUG TM )<br />

by<br />

Laura Bix, PhD<br />

Robb Clarke, PhD<br />

Hugh Lockhart, PhD<br />

Diana Twede, PhD<br />

John Spink, MS, CPP<br />

Date September 10, 2007<br />

- 1 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Table of Contents<br />

Table of Contents..................................................................................................2<br />

Summary ..............................................................................................................3<br />

Introduction ...........................................................................................................4<br />

Scope and Objectives ...........................................................................................4<br />

Methods and Assumptions....................................................................................5<br />

Funding Disclosure............................................................................................5<br />

<strong>The</strong> Supply Chain, Healthcare Products and Economics......................................6<br />

Overview of the Drug Industry...........................................................................6<br />

Overview of the Device Industry........................................................................8<br />

Overview of the Biologics Industry ....................................................................9<br />

Issues of the Legitimate Healthcare Supply Chain..........................................11<br />

Illicit Activities and the Need <strong>for</strong> Standardization ................................................14<br />

Costs of Illicit Activities ....................................................................................19<br />

<strong>The</strong> Hospital Supply Chain and the Need <strong>for</strong> Standardization ............................25<br />

Overview of the Hospital Supply Chain ...........................................................26<br />

Medication Error..............................................................................................27<br />

Automatic Identification in the Healthcare Industry .............................................35<br />

Studies of the Costs and Benefits of Auto ID in the Healthcare Supply Chain 36<br />

Manufacturing and Distribution Cost Studies...............................................37<br />

Pharmacy, Hospital and Patient Studies......................................................41<br />

<strong>Standards</strong> and Technology Advancements.....................................................53<br />

Standardization ...............................................................................................55<br />

Interoperability.................................................................................................56<br />

Conclusions ........................................................................................................57<br />

Appendix A – Issues of Intellectual Property and Pricing in Russia ....................61<br />

Appendix B- Incidents of Counterfeit or Substandard Medication from around the<br />

Globe................................................................................................................64<br />

Appendix C- Types of Hospital Supply Chains ...................................................76<br />

Standard Supply Chain ...................................................................................76<br />

Stockless Inventory Systems...........................................................................76<br />

Vendor Managed Inventory .............................................................................76<br />

Consignment ...................................................................................................77<br />

Appendix D- Bar Codes and RFID......................................................................78<br />

Radio Frequency Identification (RFID) ............................................................78<br />

Bar Codes .......................................................................................................80<br />

Appendix E- Financial Benefits of Implementing Auto Identification into the<br />

Healthcare Supply Chain..................................................................................86<br />

Appendix F- Patient Safety Benefits of Implementing Automatic Identification into<br />

the Healthcare Supply Chain............................................................................90<br />

Bar Codes .......................................................................................................94<br />

Appendix G- US Electronic Pedigree and Bar Coding Requirements...............100<br />

Appendix H- Selected Presentations from <strong>GS1</strong> HUG Conference on Auto-ID in<br />

Berlin, Germany, January 30 –February 1, 2007 ...........................................109<br />

Contact .............................................................................................................126<br />

Acknowledgements...........................................................................................127<br />

References .......................................................................................................128<br />

- 2 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Summary<br />

This report outlines the rationale <strong>for</strong><br />

adopting global data standards in the<br />

healthcare industry.<br />

<strong>The</strong> humanitarian reasons include<br />

deaths and illness which result from<br />

medication errors and counterfeiting.<br />

<strong>The</strong>se are well documented,<br />

although it is not possible to<br />

accurately quantify the extent of<br />

these problems because countries<br />

and agencies collect and report data<br />

with different definitions, even <strong>for</strong><br />

common terms.<br />

<strong>Global</strong> standards <strong>for</strong> identification,<br />

especially when coupled with<br />

automatic identification technologies<br />

(auto-ID) provide a means <strong>for</strong><br />

tracking individual healthcare<br />

product (drugs, devices, biologics<br />

and blood products) to ensure safety<br />

and efficacy. For drugs, this<br />

identification will assure the right<br />

product in the right dose reaches the<br />

right patient at the right time through<br />

the right route (the “five patient<br />

rights”). For devices, the five patient<br />

rights become eight patient rights:<br />

the right patient, the right device, the<br />

right location, the right time, the right<br />

condition, the right procedure, the<br />

right anatomic site, and the right user<br />

(healthcare professional). A global<br />

standard will assist the healthcare<br />

system in ensuring these rights. It<br />

will also serve as an equally<br />

important means of tracing back<br />

through the history of the product<br />

item, to provide a pedigree that<br />

reveals the history of the product as<br />

it moves through the healthcare<br />

supply chain.<br />

<strong>The</strong> complex multi-echelon global<br />

healthcare supply chains that exist<br />

today favor the adoption of data<br />

standards <strong>for</strong> their economic benefits<br />

in automatic identification<br />

applications. When the identification<br />

data are standardized, as with any<br />

language, they provide rapid, clearly<br />

understood communication from any<br />

sector of the supply chain to all<br />

others. Automatic identification<br />

enables a higher degree of inventory<br />

visibility and order management<br />

efficiency. In an increasingly global<br />

supply chain, global standards are<br />

required.<br />

This report does not advocate <strong>for</strong> a<br />

specific technology to which the<br />

standard should apply, since supply<br />

chain partners should be free to<br />

adopt the technology that best suits<br />

their processes. Whether<br />

identification codes are read by<br />

humans or scanners of various kinds<br />

will be based on available<br />

technology and economic<br />

justification. Interoperability among<br />

the various technologies can be<br />

assisted by adopting a global<br />

standard language of identification.<br />

- 3 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Introduction<br />

It is a seemingly simple task: medical<br />

products must be delivered to a<br />

variety of customers in a pure and<br />

efficacious state so that they can be<br />

used to improve global health.<br />

However, the issue is far from<br />

simple.<br />

<strong>The</strong> complexities of the increasingly<br />

global system are vast. Supply<br />

chains that deliver healthcare<br />

products cross in and out of<br />

geographic and political borders,<br />

with products changing ownership a<br />

number of times. Significant<br />

inconsistencies in the amount of<br />

legislation, regulation and resources<br />

exist from country to country, and<br />

these inconsistencies further<br />

complicate an already complex<br />

distribution system.<br />

Illegal opportunists take advantage<br />

of patient desperation and a supply<br />

chain that lacks transparency in<br />

attempts to profit from the sale of<br />

substandard and/or counterfeit<br />

therapies, creating a situation where<br />

providers can unknowingly use<br />

impotent or harmful products and<br />

patients suffer ill effects. Wellmeaning<br />

healthcare providers and<br />

patients make a variety of mistakes<br />

which unnecessarily injure and kill<br />

people throughout the world.<br />

<strong>The</strong> distribution of healthcare<br />

products is far from simple, but<br />

concerned healthcare providers,<br />

insurers, hospitals, clinicians,<br />

standards<br />

organizations,<br />

governments and global citizens<br />

have come together to examine<br />

ways to alleviate the current<br />

problems associated with the<br />

medical supply chain. This<br />

document provides a brief overview<br />

of the complexities of the current<br />

situation, and makes<br />

recommendations regarding how<br />

global standards can play a role in<br />

ensuring that the healthcare supply<br />

chain is safe and efficient.<br />

Scope and Objectives<br />

This report summarizes the benefits<br />

and advantages of global standards<br />

<strong>for</strong> automatic identification <strong>for</strong> all<br />

stakeholders in the worldwide<br />

healthcare supply chain.<br />

Stakeholders include firms that are<br />

involved in manufacture, distribution,<br />

utilization and regulation of<br />

prescription drugs, OTC drugs and<br />

medical devices including hospitals,<br />

pharmacies, regulatory agencies,<br />

trade groups, insurers, certification<br />

bodies and patients. <strong>The</strong> primary<br />

focus is on automatic identification to<br />

improve patient safety.<br />

<strong>The</strong> objectives are:<br />

• To support the utilization of global<br />

data standards <strong>for</strong> the healthcare<br />

supply chain.<br />

• To provide objective evidence<br />

that a global standard <strong>for</strong> the<br />

identification and tracking of<br />

healthcare products is a sound<br />

business practice, and is in the<br />

best interest of the consuming<br />

public.<br />

Several key statements of purpose<br />

guided the research:<br />

• <strong>The</strong> Business <strong>Case</strong> is not<br />

expected to recommend a<br />

specific technology solution.<br />

- 4 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

• <strong>The</strong> stakeholders are<br />

manufacturers, distributors,<br />

hospitals, retail pharmacies,<br />

regulators and consumers.<br />

• For potential solutions, rough<br />

cost (human death and<br />

detrimental risks as well as<br />

financial) are presented <strong>for</strong>: the<br />

individual consumer,<br />

manufacturers, distributors,<br />

hospitals, retail pharmacies and<br />

regulators.<br />

Also, care was taken to ensure that<br />

both agreeing and opposing views<br />

were represented.<br />

Methods and Assumptions<br />

Student researchers were recruited<br />

from the School of Packaging and<br />

Department of Marketing and Supply<br />

Chain Management and provided<br />

with a training seminar. Throughout<br />

the literature search, collaborating<br />

faculty from the School of Packaging<br />

supervised the students. In addition,<br />

MSU faculty from other departments<br />

were interviewed to leverage their<br />

expertise.<br />

(January 2007). Selected documents<br />

from these meetings were also<br />

reviewed <strong>for</strong> the report.<br />

Michigan State University Librarians<br />

and the Writing Center were<br />

engaged throughout the report to<br />

identify a complete set of broad,<br />

global resources and to contribute<br />

their research expertise to the team.<br />

Funding Disclosure<br />

This research was funded by the <strong>GS1</strong><br />

<strong>Global</strong> Healthcare User Group (<strong>GS1</strong><br />

HUG), a consortium of healthcare<br />

organizations who are manufacturers,<br />

distributors and users of healthcare<br />

products. <strong>The</strong> mission, vision and<br />

membership of <strong>GS1</strong> <strong>Global</strong> HUG can be<br />

viewed at www.gs1.org/hug<br />

This report is the culmination of a<br />

literature search of global resources<br />

and interviews of personnel with<br />

varying disciplinary backgrounds and<br />

perspectives. Ef<strong>for</strong>ts were focused<br />

around three main research areas:<br />

health risks (patient safety), supply<br />

chain, and automatic-identification.<br />

A synthesis team combined the three<br />

areas. <strong>The</strong> research was designed<br />

to obtain in<strong>for</strong>mation relevant to the<br />

business case analysis as described<br />

above. <strong>The</strong> global aspect was<br />

enhanced by attendance of a faculty<br />

member at <strong>GS1</strong>/HUG meetings in<br />

Paris (September 2006) and Berlin<br />

- 5 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong> Supply Chain,<br />

Healthcare Products and<br />

Economics<br />

Healthcare products include pharmaceuticals,<br />

medical devices, biologics<br />

and combination products,<br />

products that cross into more than<br />

one of the a<strong>for</strong>ementioned sectors.<br />

In general, the manufacturers and<br />

distribution networks are different <strong>for</strong><br />

each sector. Each of these sectors<br />

has specific nuances and challenges<br />

regarding its supply chain. In order<br />

<strong>for</strong> global data standards to be both<br />

safe and efficient, the sector-specific<br />

intricacies of each must be considered.<br />

Overview of the Drug Industry<br />

Drug manufacturing, both <strong>for</strong> prescription<br />

products and over the<br />

Counter (OTC) products, is a large,<br />

growing, global industry. In 2003, estimated<br />

sales of prescription drug<br />

products totaled $491.8 billion globally,<br />

an increase of 9% over the proceeding<br />

year. (<strong>The</strong> Health Strategies<br />

Consultancy LLC 2005) Similar<br />

trends are found when reviewing<br />

OTC 1 markets. Statistics from Euromonitor<br />

International indicate the<br />

sales of the global OTC industry<br />

were $124.4 billion in 2006; this represented<br />

a 3.09% increase over the<br />

previous year’s sales (2005-$120.7<br />

billion). (Euromonitor International<br />

and the <strong>Global</strong> Marketing In<strong>for</strong>mation<br />

1 This is the aggregation of analgesics, cough, cold and<br />

allergy remedies, digestive remedies, medicated skin<br />

care, vitamins & dietary supplements, smoking cessation<br />

aids, eye care, ear care, adult mouthcare, calming<br />

and sleeping aids and wound treatments.<br />

Database 2006) <strong>The</strong> top five drug<br />

companies that produced OTC drugs<br />

in 2004 held a combined value share<br />

of 19% <strong>for</strong> that year, while the top 20<br />

had a combined share of 40%. Of<br />

these 20 companies, nine were USowned,<br />

four Japanese-owned, three<br />

based in the United Kingdom (UK),<br />

two in Germany and one each in<br />

Switzerland and France.<br />

(Euromonitor International and the<br />

<strong>Global</strong> Marketing In<strong>for</strong>mation Database<br />

2006)<br />

Even though the drug industry has<br />

been going through a period of consolidation,<br />

it is still very competitive.<br />

Firms compete in over twenty therapeutic<br />

categories, so each manufacturer’s<br />

competitors are not the same<br />

across all categories. No one firm<br />

has more than a 7% market share<br />

worldwide. Competition is further fueled<br />

by the expiration of blockbuster<br />

drugs, the growth of generics and<br />

the rise of OTC medications. (Burns<br />

2002)<br />

OTC drug distribution channels are<br />

many of the same ones used <strong>for</strong><br />

other consumer goods and are more<br />

direct than the channels <strong>for</strong> prescription<br />

drugs. Prescription drugs are<br />

sold primarily through distributors.<br />

“<strong>The</strong> pharmaceutical supply<br />

system is complex, and involves<br />

multiple organizations<br />

that play differing but sometimes<br />

overlapping roles in drug<br />

distribution and contracting.<br />

This complexity results in considerable<br />

price variability<br />

across different types of consumers,<br />

and the supply chain is<br />

not well understood by patients<br />

or policymakers.” (<strong>The</strong> Health<br />

- 6 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Strategies Consultancy LLC<br />

2005)<br />

Wholesalers purchase drugs from<br />

manufacturers and distribute them to<br />

a variety of customers, which can<br />

include: federal and state governments,<br />

employers, HMOs, Pharmacy<br />

Benefits Managers (PBMs), pharmacies<br />

(retail, mail order and internet),<br />

hospitals, ambulatory care facilities,<br />

long-term care facilities and other<br />

medical facilities (physicians’ offices,<br />

community clinics and diagnostics<br />

labs).<br />

Primary wholesalers can either sell<br />

the drugs to the entity that will ultimately<br />

dispense the medication to<br />

the patient (pharmacy, etc.) or into<br />

the hands of a secondary distributor,<br />

also called a secondary wholesaler.<br />

<strong>The</strong> functions of distributors are<br />

mainly to maintain the appropriate<br />

level of supply to meet demand.<br />

<strong>The</strong>y aggregate demand across<br />

many small buyers. <strong>The</strong>ir regional<br />

networks make it possible to supply<br />

small quantities of many different<br />

products while allowing manufacturers<br />

to use their economies of scale<br />

to produce and ship large quantities<br />

of a few products. Distributors simplify<br />

product, payment, and in<strong>for</strong>mation<br />

flows between manufacturer and<br />

customer (reducing the number of<br />

purchase orders and shipments that<br />

manufacturers have to process) and<br />

simplify credit issues <strong>for</strong> manufacturers<br />

dealing with small customers.<br />

For branded products, the Wholesale<br />

Acquisition Cost (WAC), the price<br />

which the wholesale distributor pays<br />

<strong>for</strong> the drug, is generally fairly uni<strong>for</strong>m,<br />

with a few exceptions: volume<br />

discounts, prompt pay discounts and<br />

- 7 -<br />

short date discounts (where the wholesaler<br />

assumes the risk of expiration).<br />

In this way, a notable trend<br />

among pharmaceutical distributors<br />

has been <strong>for</strong> profit margins to come<br />

less from customers and more from<br />

manufacturers in various ways. Additionally,<br />

as the prices of pharmaceutical<br />

products have increased<br />

over time there has also been more<br />

pressure from the end consumer to<br />

keep prices down.<br />

In response to eroding profit margins<br />

(distributor’s margins are as low as<br />

0.2-0.5%), wholesale distributors<br />

have been <strong>for</strong>ced to offer new services<br />

to remain in business. Services<br />

offered by wholesalers include:<br />

specialty drug distribution, repackaging,<br />

electronic order services, reimbursement<br />

support, and drug buyback<br />

programs 2 . (<strong>The</strong> Health Strategies<br />

Consultancy LLC 2005) Most<br />

pharmacies purchase the drugs that<br />

they obtain through drug wholesalers,<br />

not directly from the manufacturer,<br />

because they do not posses<br />

the operational infrastructure necessary<br />

to bypass the wholesalers- the<br />

warehousing facilities, distribution<br />

vehicles and inventory control systems.<br />

High prices and low profit margins<br />

combined with discounted pricing,<br />

make the counterfeit drug market attractive<br />

to wholesalers who are willing<br />

to exploit the system because of<br />

2<br />

“Drug buy-back programs are offered by manufacturers<br />

and are facilitated by wholesale distributors. Buy<br />

back programs are intended to minimize the financial<br />

risk that pharmacies must assume in stocking products<br />

by allowing them to sell unused products or products<br />

with near-term expiration dates back to the manufacturer.”<strong>The</strong><br />

Health Strategies Consultancy LLC (2005).<br />

Follow the Pill: Understanding the US Commercial<br />

Pharmaceutical Supply Chain, <strong>The</strong> Kaiser Family<br />

Foundation.


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

the desperate need to turn a profit.<br />

Secondary distributors who buy from<br />

the major drug wholesalers, each<br />

other and from end customers are a<br />

likely entry point <strong>for</strong> counterfeit<br />

goods because they are the least<br />

regulated of the healthcare supply<br />

chain.<br />

“Although the 7,000 secondary<br />

distributors in the US traffic only<br />

a tiny percentage of US<br />

pharmaceuticals, drug regulators<br />

and industry experts are<br />

nearly unanimous in declaring<br />

them the weakest link in a potentially<br />

deadly chain.” (Vastag<br />

2003)<br />

An additional complication to the<br />

pharmaceutical supply chain is the<br />

presence of Pharmacy Benefit Managers<br />

(PBMs). “PBMs may achieve<br />

savings <strong>for</strong> their customers by negotiating<br />

discounts and through cost<br />

containment programs, including the<br />

use of <strong>for</strong>mularies and cost sharing.”<br />

(<strong>The</strong> Health Strategies Consultancy<br />

LLC 2005) PBMs work with third<br />

party payers (public health plans,<br />

private insurance plans or selffunded<br />

employers) to determine<br />

which drugs will be paid <strong>for</strong> and how<br />

much the consumer must pay out of<br />

pocket and how much the pharmacy<br />

will receive. In general, PBMs do not<br />

take possession of drugs in the supply<br />

chain; however, if they are in the<br />

mail order pharmacy or specialty<br />

pharmacy business, they will buy<br />

from manufacturers or wholesalers<br />

and distribute to patients.<br />

Although this description is largely<br />

based on the US pharmaceutical<br />

supply chain 3 , there is a consistent<br />

thread throughout the world, complexity.<br />

It is common <strong>for</strong> healthcare<br />

products to change hands multiple<br />

times, with little to no potential to<br />

trace them to their origin. Regulators<br />

and legislators create laws and regulations<br />

that impact pricing, supply<br />

chains and intellectual property, initiating<br />

the potential <strong>for</strong> problems. Regardless<br />

of the geographic location<br />

of your healthcare supply chain, the<br />

likely result is a cost competitive,<br />

complex, multi-echelon supply chain<br />

that lacks transparency, a gateway<br />

<strong>for</strong> potential <strong>for</strong> errors and ill intentions.<br />

Overview of the Device Industry<br />

Like the pharmaceutical industry, the<br />

medical device industry is also very<br />

competitive. <strong>The</strong> US is the largest<br />

producer of medical devices in the<br />

world (AdvaMed 2004) <strong>The</strong> US Census<br />

of 2002 listed “5,394 companies,<br />

comprising 6,007 establishments, as<br />

active in medical device manufacturing,<br />

with a total value of shipments of<br />

$85 billion.”(ERG 2006)<br />

<strong>The</strong> products of the device industry<br />

are extremely disparate; they range<br />

from small, simple items, like tongue<br />

depressors, to complex, capital<br />

equipment, like x-ray machines.<br />

Some are meant <strong>for</strong> mass markets,<br />

others are small niche items. Some<br />

devices are packaged individually;<br />

others are packaged in boxes of<br />

hundreds or thousands. Some are<br />

reprocessed, others are disposable,<br />

yet others are used <strong>for</strong> a lifetime.<br />

- 8 -<br />

3 Later sections of this document will further<br />

illustrate the complexity of the pharmaceutical<br />

supply chain on a global level


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Some carry a significant risk; others<br />

do not. (ERG 2006)<br />

Devices can be grouped into two<br />

broad categories with regard to the<br />

supply chain: advanced devices and<br />

commodity-type medical and surgical<br />

supplies.<br />

<strong>The</strong> advanced devices are higherpriced,<br />

lower volume, technologically<br />

sophisticated diagnostic and therapeutic<br />

products. <strong>The</strong>y are sold mostly<br />

to hospitals, but there are different<br />

customers within the hospital supply<br />

chain: buying groups, distributors<br />

and physicians.<br />

<strong>The</strong> manufacturers of commoditytype<br />

medical and surgical supplies<br />

share characteristics with the manufacturers<br />

of prescription drugs, in<br />

that the products are sold primarily<br />

through distributors, and the products<br />

are used in a variety of therapeutic<br />

areas. Prescription drug<br />

manufacturers and the manufacturers<br />

of commodity-type medical and<br />

surgical supplies are concerned with<br />

integrating these product offerings<br />

<strong>for</strong> the consumer and developing ‘total<br />

cost’ approaches.<br />

Like their prescription drug manufacturing<br />

counterparts, the medicalsurgical<br />

firms have also participated<br />

in many acquisitions. But medicalsurgical<br />

manufacturers differ from<br />

pharmaceutical manufacturers in that<br />

these firms are interested in direct,<br />

bilateral contracts with hospitals and<br />

want to bypass Group Purchasing<br />

Organizations all together. (Burns<br />

2002)<br />

A hallmark of the device industry is<br />

innovation, which results in short life<br />

cycles <strong>for</strong> many products. “Medical<br />

- 9 -<br />

devices undergo constant development<br />

based on feedback from medical<br />

practitioners and advances in<br />

other sciences relevant to medical<br />

device technology.” (AdvaMed 2004)<br />

“With this constant innovation, the<br />

medical device industry spends<br />

heavily on research and development.<br />

<strong>The</strong> industry spends a large<br />

percent of revenues on R&D, with<br />

that percentage being substantially<br />

higher <strong>for</strong> small firms.”(ERG 2006)<br />

Small firms are believed to play a<br />

greater role in the research and development<br />

process; while, large firms<br />

provide organizational and capital<br />

assets that help ensure new products’<br />

commercial success. (Field and<br />

Tilson 2005)<br />

<strong>The</strong> disparity among products, usage<br />

settings, risk levels, production quantities<br />

and producers, as well as the<br />

evolving nature of the industry have<br />

led to a dialog about how to best<br />

standardize data systems that are<br />

meant <strong>for</strong> medical devices. (ERG<br />

2006)<br />

Overview of the Biologics Industry<br />

<strong>The</strong> biologic product industry is a<br />

considerably smaller, but rapidly<br />

growing portion of the healthcare industry.<br />

Traditionally, pharmaceutical<br />

companies have depended on drug<br />

products, “small molecules,” to fuel<br />

future innovations; however, a recent<br />

<strong>for</strong>ecast indicating that 60% of revenue<br />

growth will be fueled by biologic<br />

products (therapeutic proteins and<br />

monoclonal antibodies), has pharmaceutical<br />

companies investing in<br />

biotech research. In fact, it is predicted<br />

that “by 2010, annual sales of<br />

biologics will have increased by<br />

$26bn, compared to a $13bn in-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

crease <strong>for</strong> small molecules.“ (Datamonitor,<br />

May 4, 2006)<br />

Biologics are generally complex, protein-based<br />

products that come from<br />

living systems, making them particularly<br />

vulnerable to changes in the<br />

environment. Most must be refrigerated<br />

throughout distribution in order<br />

to maintain their safety and efficacy.<br />

“Some products also must be kept at<br />

a certain pH level” and others are<br />

light sensitive. (Radcliffe, BIO, February<br />

8, 2006) Additionally, many of<br />

these products are parenterals. <strong>The</strong>y<br />

are not administered orally, but injected<br />

or infused directly into the patient’s<br />

bloodstream. As a result, it is<br />

extremely important that the product<br />

delivered to the patient be safe and<br />

efficacious.<br />

Because of the sensitivity of biologics<br />

and the fact that they are generally<br />

parenteral, their supply chain<br />

must be tightly monitored and controlled.<br />

Recognizing the unique<br />

dangers tied to biotech products, an<br />

industry group that represents biotech<br />

manufacturers, BIO, indicated<br />

its support of the ef<strong>for</strong>ts to implement<br />

an electronic pedigree system.<br />

“Electronic track-and-trace<br />

technology, including RFID,<br />

could help create this transparency,<br />

disclosing the origin and<br />

distribution history of drug<br />

products. BIO supports its use<br />

within the drug distribution system<br />

in a responsible manner.<br />

First, and of <strong>for</strong>emost importance<br />

to the patients that the<br />

biotechnology industry ultimately<br />

serves, BIO believes<br />

that fully implemented electronic<br />

tracking from the manufacturer<br />

to the pharmacist will<br />

- 10 -<br />

reduce the number of counterfeit<br />

drugs that enter the distribution<br />

system.” (Radcliffe<br />

2006)<br />

<strong>The</strong> group also stated reasons to<br />

pursue a standardized system included:<br />

improved supply chain management<br />

(both <strong>for</strong>ward and reverse<br />

supply chain) and improved emergency<br />

response.<br />

However, the group also cautioned<br />

that the biotech industry has several<br />

issues that are unique and problematic<br />

when it comes to implementation<br />

of track and trace technology. <strong>The</strong><br />

supply chain that delivers biologic<br />

products is different than that traditionally<br />

used by the pharmaceutical<br />

industry.<br />

“Unlike small molecule drugs<br />

[pharmaceutical products],<br />

which are often distributed<br />

through large wholesale distributors,<br />

biopharmaceuticals<br />

are more frequently distributed<br />

through small specialty distribution<br />

channels that lack the<br />

economies of scale to maximize<br />

track-and-trace cost efficiency.”<br />

(Radcliffe 2006)<br />

Many of the companies working in<br />

the biotechnology area are small,<br />

and the upfront capital investment to<br />

implement a system could be a significant<br />

barrier to them.<br />

<strong>The</strong> biotech industry is not only concerned<br />

about a standardized system<br />

<strong>for</strong> economic reasons, but also <strong>for</strong><br />

safety reasons.<br />

“To date, there is not a complete<br />

understanding of how RF-<br />

ID tags and readers may affect


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

the stability of biological product<br />

[sic] during distribution;<br />

many companies have been<br />

hesitant to adopt the technology<br />

until these questions are<br />

answered. Recognizing these<br />

unique concerns, FDA has begun<br />

research, with the Center<br />

<strong>for</strong> Devices and Radiological<br />

Health, the Product Quality Research<br />

Institute (PQRI), and the<br />

Auto-ID Laboratories, to evaluate<br />

the effect of RFID tags on<br />

biological product stability, liquid<br />

temperatures, and storage<br />

conditions… BIO also encourages<br />

research to evaluate the<br />

use of RFID technology to<br />

monitor environmental exposures<br />

and integrity of the cold<br />

chain.” (Radcliffe 2006)<br />

Issues of the Legitimate<br />

Healthcare Supply Chain<br />

As discussed in the previous<br />

sections, healthcare products are<br />

supplied through complex, multiechelon<br />

global supply chains that<br />

currently lack transparency.<br />

Products are not shipped directly<br />

from the manufacturer to the<br />

customer, but are instead sold<br />

through primary and secondary<br />

distributors. <strong>The</strong>re can be as many<br />

as 17 levels of intermediation<br />

between a manufacturer and a<br />

consumer. (Lara 2005) Tracing the<br />

ingredients that make up a product,<br />

the originator of the product, the<br />

series of locations that it passed<br />

through, and the way it was handled<br />

be<strong>for</strong>e arriving at its final destination<br />

is often impossible.<br />

<strong>The</strong> healthcare industry, by its very<br />

nature, must balance the tensions of<br />

- 11 -<br />

innovation and access. <strong>The</strong> industry<br />

must provide access to therapies <strong>for</strong><br />

all people, but if the healthcare industry<br />

is to continue to innovate, it<br />

must recoup the costs of research<br />

and invest in future generations of<br />

life saving products.<br />

<strong>The</strong> way that the medical industry<br />

typically deals with balancing<br />

innovation and access is differential<br />

pricing. Products are sold at the<br />

price that the market will bear. For<br />

example, OECD nations 4 , which can<br />

af<strong>for</strong>d to pay more, generally bear<br />

the majority of the cost <strong>for</strong> future<br />

innovations; while areas of the world<br />

that cannot af<strong>for</strong>d to bear this burden<br />

are sold the therapies at much lower<br />

prices. Markets can be segmented<br />

along geographical borders, political<br />

borders, or buyer and payer classes<br />

within countries such as the US<br />

Medicare, Medicaid, Veterans<br />

Affairs, federal employees, private<br />

health plans and individuals.<br />

In a comment to the FDA, BIO<br />

indicates how important, and<br />

challenging, maintaining the level of<br />

innovation can be:<br />

“Of the many wonderful ideas<br />

that this creative industry [biotech]<br />

generates, only a small<br />

handful result in FDA-approved<br />

new products. Our member<br />

companies are dedicated to<br />

finding the next biologicalbased<br />

treatment or cure. <strong>The</strong>y<br />

are willing to devote enormous<br />

energy, creativity, and resources<br />

to this endeavor, even<br />

though they know success is<br />

4 Countries that are members of the Organisation <strong>for</strong><br />

Economic Co-operation and Development


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

difficult and elusive. But no<br />

treatment or cure will come<br />

without this research. And this<br />

research and development<br />

cannot be undertaken without<br />

the commitment of substantial<br />

financial resources, most of<br />

which come from the highly<br />

sensitive capital market.” (Bio<br />

2004)<br />

In fact, it has been estimated that “it<br />

costs more than $800 million and<br />

anywhere from 5 to 10 years to<br />

develop a new pharmaceutical<br />

product; biotechnology products can<br />

require even greater costs and<br />

longer timeframes.” (Bio 2004)<br />

As a result, preserving the<br />

differential pricing structure is<br />

imperative to maintaining the<br />

delicate balance of access and<br />

innovation. However, issues relating<br />

to law, regulation, economics and<br />

poor behavior conspire to erode the<br />

pricing differential, threatening the<br />

ability of the healthcare industry to<br />

continue innovating.<br />

One of the side effects of differential<br />

pricing is that it makes the arbitrage<br />

of healthcare products possible.<br />

“…arbitrage is the nemesis of<br />

differential pricing” (Outterson 2004).<br />

Economic arbitrage is the<br />

opportunity to buy an asset at a low<br />

price and then immediately sell it in<br />

another market <strong>for</strong> a high price.<br />

In instances where arbitrage involves<br />

intellectual property and the product<br />

crosses an international border, it is<br />

called parallel trade. (Outterson<br />

2004) Parallel trade, also called grey<br />

market trade, “is the act of taking<br />

goods placed into circulation in one<br />

market, where they are protected by<br />

- 12 -<br />

a trademark, patent or copyright, and<br />

shipping them to a second market<br />

without the authorization of the local<br />

owner of the intellectual property<br />

right.” (Gansladt and Maskus 2004)<br />

Those that participate in such<br />

activities are called “parallel traders,”<br />

“short liners,” or “arbitragers.”<br />

(Morais 2004)<br />

Grey market, or parallel trade, may<br />

or may not be legal, depending on<br />

the country’s intellectual property<br />

laws. Additionally, the practice may<br />

be <strong>for</strong>bidden contractually, though<br />

this approach can run afoul of<br />

competition laws. (Outterson 2004)<br />

Such is the case in the European<br />

Union. “In the European Union a<br />

series of European Court of Justice<br />

rulings, or opinions underpin the<br />

legitimacy of the pharmaceutical<br />

parallel trade.” (Kanavos, Costa-i-<br />

Font et al. 2004) <strong>The</strong>se rulings are<br />

meant to encourage free trade. As a<br />

result, several European member<br />

states, particularly those whose<br />

pharmaceutical prices exceed the<br />

European average (the UK,<br />

Germany, Sweden, Denmark, and<br />

the Netherlands) are encouraged to<br />

actively participate in parallel trade.<br />

(Kanavos, Costa-i-Font et al. 2004)<br />

<strong>The</strong> <strong>for</strong>ce behind this ideology is that<br />

free trade will inspire competition,<br />

resulting in better pricing, products<br />

and availability.<br />

However, a study conducted by<br />

Kanavos et al. (Kanavos, Costa-i-<br />

Font et al. 2004) indicates this not to<br />

be the case. <strong>The</strong> researchers, who<br />

examined parallel trade in the<br />

European Union <strong>for</strong> the period 1997-<br />

2002, indicated, “No (measurable)<br />

direct benefits accrue to patients due<br />

to the structure of user charges in


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

the study countries. Consequently,<br />

patient access to medicines is<br />

unaffected.” (Kanavos, Costa-i-Font<br />

et al. 2004) <strong>The</strong>y also suggested<br />

that the enhanced competition of the<br />

free trade structure did not provide<br />

any cost benefit:<br />

“<strong>The</strong> hypothesis that<br />

pharmaceutical parallel trade<br />

stimulates price competition<br />

and drives prices down in<br />

destination (importing)<br />

countries over the long-term is<br />

rejected. <strong>The</strong>re is also very little<br />

evidence lending support to the<br />

argument that parallel trade<br />

stimulates (price) competition<br />

among exporting and importing<br />

countries. Thus, the arbitrage<br />

hypothesis of price equalisation<br />

or price approximation is also<br />

rejected.”(Kanavos, Costa-i-<br />

Font et al. 2004)<br />

Nonetheless the parallel trade<br />

industry still prospers. It is estimated<br />

that legal arbitrage in the European<br />

drug industry is nearly a $15 million<br />

business. Drug arbitrage along the<br />

US Canadian border was estimated<br />

to be a $1.1 billion business in 2003<br />

alone (a 70% increase from the<br />

previous year). (Morais 2004)<br />

Parallel trade, even when legal, can<br />

pose threats to patient safety. In the<br />

year 2005, 140 million individual<br />

drug packages were parallel traded<br />

in the European Union; each was<br />

repackaged by a wholesaler.<br />

“This means that, literally, parallel<br />

traders open 140 million<br />

packets of drugs, remove their<br />

contents and repackage them.<br />

But these parallel profiteers are<br />

in the moneymaking business,<br />

not the safety business. And,<br />

mistakes happen. For example,<br />

new labels incorrectly state the<br />

dosage strength; the new label<br />

says the box contains tablets,<br />

but inside are capsules; the expiration<br />

date and batch numbers<br />

on the medicine boxes<br />

don’t match the actual batch<br />

and dates of expiration of the<br />

medicines inside; and patient<br />

in<strong>for</strong>mation materials are often<br />

in the wrong language or are<br />

out of date.” (Pitts 2005)<br />

If the legal traders have the potential<br />

to endanger the public health,<br />

imagine the potential of those that<br />

exploit the system <strong>for</strong> their own<br />

benefit by participating in illegal<br />

arbitrage.<br />

Arbitrage is even actively<br />

encouraged by some governments.<br />

“German law mandates that<br />

pharmacies have at least 7% of their<br />

stock coming from parallel trade or<br />

face penalties. Britain, meanwhile,<br />

financially rewards its pharmacists<br />

when they arbitrage.” (Morais 2004)<br />

In fact, it is estimated that 20% of all<br />

prescriptions filled in Britain are<br />

parallel traded. (Pitts 2005)<br />

- 13 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Illicit Activities and the<br />

Need <strong>for</strong> Standardization<br />

<strong>The</strong> factors of a complex multi<br />

echelon supply chain in an<br />

environment of differential pricing<br />

and parallel trade present great<br />

opportunities <strong>for</strong> those with illicit<br />

intentions. As a result, criminals can<br />

participate in healthcare supply<br />

chains in a number of ways.<br />

Dysfunctional arbitrage is the most<br />

dangerous <strong>for</strong>m of arbitrage because<br />

it erodes differential pricing by<br />

diverting product from charitable,<br />

non-commercial markets into the<br />

OECD markets, which will pay a<br />

higher price. (Outterson 2004) For<br />

example, the profitability of selling<br />

anti retrovirals is similar to that in the<br />

illegal cocaine market. However,<br />

compared to cocaine, there is little<br />

risk when selling prescription drugs.<br />

Fines and penalties are less stiff <strong>for</strong><br />

illegal importation of<br />

pharmaceuticals. Criminals are<br />

shifting from smuggling of narcotics<br />

(heroine, cocaine, etc.) and the<br />

running of weapons to counterfeiting<br />

of drugs because it is financially<br />

lucrative and relatively low risk (Eban<br />

2005; Akunyili 2006)<br />

Criminals can participate in illegal<br />

arbitrage in a number of different<br />

ways. Tactics include:<br />

• Buying drugs and supplies from<br />

“closed door” pharmacies and<br />

dispensaries of small<br />

institutions such as nursing<br />

homes, hospices, AIDS clinics<br />

at discounted prices<br />

- 14 -<br />

• Paying hospital or nursing<br />

home workers to buy drugs and<br />

devices from their supplies<br />

• Offering cash to Medicaid<br />

patients in exchange <strong>for</strong> their<br />

drugs and other patient care<br />

items<br />

• Collaborating with corrupt<br />

company employees, breaking<br />

into warehouses and stealing<br />

shipments from loading docks<br />

• <strong>The</strong>ft or purchase of drugs<br />

intended <strong>for</strong> charitable or low<br />

income markets in order to<br />

divert the products to markets<br />

that will pay higher prices<br />

No one is quite sure of the<br />

magnitude of the illegal arbitrage<br />

business <strong>for</strong> healthcare products. It<br />

has been estimated that unlawful<br />

drug arbitrage in Chile accounted <strong>for</strong><br />

10% of cancer medicines and 20%<br />

of HIV medicines according to the<br />

Chilean Pharmaceutical Chamber.<br />

(Morais 2004) Lebanon’s Pharmacy<br />

Association accused the majority of<br />

the country’s charitable clinics of<br />

selling donated drugs and profiting<br />

considerably from these<br />

transactions. (Morais 2004)<br />

Those with illicit intentions can, and<br />

do, participate in illegal arbitrage in a<br />

number of ways. For those that are<br />

not willing to go to the ef<strong>for</strong>t that<br />

illegal arbitrage takes, there is<br />

counterfeiting. Illegal arbitrage is a<br />

logical entry point into the world of<br />

counterfeiting <strong>for</strong> those seeking<br />

profit.<br />

“Counterfeiting dispenses with<br />

the need to collect the product<br />

in far-flung locations,<br />

repackage it, and transporting<br />

[sic] it back to the OECD<br />

markets. Counterfeiting can be


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

produced in market at very<br />

modest cost, more cheaply<br />

perhaps than obtaining<br />

diversions in low-income<br />

countries.” (Outterson 2004)<br />

<strong>The</strong> World Health Organization<br />

(WHO) defines a counterfeit<br />

medication as “one which is<br />

deliberately and fraudulently<br />

mislabeled with respect to identity<br />

and/or source. Counterfeiting can<br />

apply to both branded and generic<br />

products and counterfeit products<br />

may include products with correct<br />

ingredients or with the wrong<br />

ingredients, without active<br />

ingredients, with insufficient active<br />

ingredients or with fake packaging.”<br />

(World Health Organization)<br />

<strong>The</strong> WHO differentiates counterfeit<br />

medications from substandard<br />

medications, defining substandard<br />

drugs as:<br />

“drugs [that] are genuine drug<br />

products which do not meet<br />

quality specifications set <strong>for</strong><br />

them. <strong>The</strong> term substandard is<br />

used to describe the quality<br />

status of genuine drugs<br />

produced by legitimate<br />

manufacturers. Normally, <strong>for</strong><br />

each drug product that a<br />

manufacturer produces he/she<br />

sets the quality standards or<br />

specifications.<br />

Such<br />

specifications are also<br />

published in official<br />

pharmacopeias such as the<br />

United States Pharmacopeia,<br />

the European Pharmacopeia<br />

and the WHO International<br />

Pharmacopeia. If a drug, upon<br />

laboratory testing in<br />

accordance with the<br />

specifications it claims to<br />

- 15 -<br />

comply with fails to meet the<br />

specifications, then it is<br />

classified as a substandard<br />

drug.” (World Health<br />

Organization)<br />

However, it is all but impossible to<br />

quantify the impact of counterfeiting<br />

because of a lack of standardized<br />

the definitions. Not all reports<br />

differentiate substandard product<br />

from counterfeit product. (Forzley<br />

2003)<br />

Recognizing this the WHO has<br />

indicated, “<strong>The</strong> absence of<br />

universally accepted definitions<br />

“makes in<strong>for</strong>mation exchange<br />

between countries very difficult,<br />

limits the ability to understand the<br />

true extent of the problem at a<br />

global level, and hinders the<br />

development of global strategies<br />

to combat the problem.”(World<br />

Health Organization) 5<br />

Researchers from the Dublin City<br />

University and the Irish Patients’<br />

Association agree,<br />

“A global definition needs to<br />

be accepted so that the<br />

problem can be tackled<br />

efficiently and globally….<br />

<strong>The</strong> absence of a common<br />

universal legal definition [<strong>for</strong><br />

the term counterfeit] has two<br />

significant consequences in<br />

dealing with counterfeit<br />

drugs. 4 First, States<br />

[European] find it difficult to<br />

exchange in<strong>for</strong>mation about<br />

counterfeit drugs where they<br />

define counterfeit drugs<br />

differently. Second, it limits the<br />

ability to understand the true<br />

5 Emphasis added


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

extent of the problem at the<br />

global level.” (O'Mathuna and<br />

McAuley 2005)<br />

To illustrate the ramifications of the<br />

disparity of definitions, consider<br />

China, which is “believed to be the<br />

world’s leading exporter of<br />

counterfeit drugs and bulk<br />

chemicals.” (Ritter 2007) <strong>The</strong> Drug<br />

Administration Law of the People’s<br />

Republic of China consists of 10<br />

chapters that dictate drug law in<br />

China. Chapter V (Control over<br />

Drugs), Article 48 prohibits<br />

production and distribution of<br />

counterfeit drugs. However, there is<br />

a lack of harmony between the<br />

definitions of counterfeiting as<br />

defined by the WHO and the<br />

Chinese law. This issue has<br />

attracted notice.<br />

In testimony be<strong>for</strong>e the US House<br />

Committee on Ways and Means,<br />

Geralyn Ritter, the Vice President of<br />

PhRMA, indicates that the wording of<br />

the laws governing counterfeit drugs<br />

in China creates a situation where<br />

Chinese officials are “hamstrung by<br />

excessive evidentiary requirements.”<br />

(Ritter 2007)<br />

“Although China’s drug laws<br />

prohibit “fake” medicines,<br />

criminal liability is conditioned<br />

upon proof of harm, a statutory<br />

requirement that, in practice,<br />

requires evidence of a serious<br />

defect in quality. This<br />

burdensome and excessive<br />

evidentiary requirement all but<br />

precludes criminal prosecution<br />

against counterfeiters under<br />

China’s drug laws.” (Ritter<br />

2007)<br />

In her testimony, Ritter urged the<br />

following changes as a way to<br />

increase the safety of<br />

pharmaceutical products that are<br />

produced or sold in China.<br />

“…it is imperative that China<br />

amend its drug laws to prohibit<br />

and criminalize the<br />

manufacture, distribution,<br />

import or export of any<br />

pharmaceutical that is<br />

deliberately mislabeled as to<br />

source or identity (consistent<br />

with the WHO definition of a<br />

counterfeit medicine 6 ),<br />

without the need to prove<br />

harmful effects or deficient<br />

quality.” (Ritter 2007)<br />

Another significant issue relating to<br />

counterfeiting and Chinese law is the<br />

production of active pharmaceutical<br />

ingredients (APIs). Thousands of<br />

chemical companies in China have<br />

the potential to produce APIs.<br />

“Under current Chinese law, the<br />

chemical suppliers who are<br />

conducting such activities are not<br />

operating illegally under Chinese<br />

law.”(Ritter 2007)<br />

“A chemical company is subject<br />

to government oversight by the<br />

SFDA [State Food and Drug<br />

Administration of China] when it<br />

“chooses” to register a specific<br />

API product with the SFDA. It<br />

is only when the chemical<br />

company declares that it is<br />

making an API to be used in a<br />

finished pharmaceutical good<br />

and after the SFDA grants a<br />

product registration number<br />

that the company is legally<br />

permitted to supply API <strong>for</strong><br />

6 Emphasis added<br />

- 16 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

inclusion in the finished<br />

pharmaceutical product. Under<br />

the current regulatory<br />

framework, if a chemical<br />

company manufactures an API,<br />

but elects not to declare that<br />

the API will be used in a<br />

finished pharmaceutical good,<br />

there is no government agency<br />

that possesses authority to<br />

preclude this activity from<br />

occurring.” (Ritter 2007)<br />

Ritter went on to indicate that even<br />

where the requirements exist<br />

(registering the bulk API with the<br />

SFDA if it is to be sold <strong>for</strong> use in a<br />

medicinal product), the requirements<br />

are frequently ignored. “Clear<br />

evidence exists that chemical<br />

companies are ignoring SFDA<br />

requirements by advertising their API<br />

products on commercial websites in<br />

the bulk <strong>for</strong>m under the category of<br />

“(<strong>for</strong>) medicinal use” while not<br />

adhering to SFDA GMP regulations.”<br />

(Ritter 2007)<br />

A case in point regarding this issue<br />

was revealed in the May 6, 2007<br />

New York Times article entitled “A<br />

Toxic Pipeline: Tracking Counterfeit<br />

Drugs.” Diethylene glycol, was sold<br />

as 99.5% pure glycerin, a syrup that<br />

is used in cough remedies.<br />

Diethylene glycol looks and acts like<br />

glycerin, but is significantly cheaper<br />

and deadly. <strong>The</strong> bulk chemical<br />

changed hands a number of times<br />

and ultimately was used by the<br />

Panamanian government in the<br />

preparation of cough syrup. It is<br />

suspected that 365 people have died<br />

as a result; at the time of writing, 100<br />

deaths had been confirmed.<br />

<strong>The</strong> Times reporter points out that<br />

the event demonstrates “how<br />

China’s safety regulations have<br />

lagged behind its growing role as<br />

low-cost supplier to the world. It also<br />

demonstrates how a poorly policed<br />

chain of traders in country after<br />

country allows counterfeit medicine<br />

to contaminate the global market.”<br />

(Bogdanich and Hooker 2007)<br />

Chinese officials have indicated in<br />

one of the cases (there was more<br />

than one manufacturer of this bulk<br />

ingredient) that the Chinese<br />

government “has no jurisdiction in<br />

the case because the factory is not<br />

certified to make medicine.”<br />

(Bogdanich and Hooker 2007)<br />

<strong>The</strong>re is some indication, however,<br />

that several high profile incidents like<br />

this one 7 may bring new scrutiny to<br />

China’s law and its officials. On May<br />

29, 2007, Zheng Xiaoyu, <strong>for</strong>mer<br />

head of the SFDA, was convicted of<br />

corruption. <strong>The</strong> court indicated that<br />

he was guilty of accepting bribes<br />

from drug companies, indicating,<br />

”This has threatened the safety of<br />

people's life and health and has<br />

caused an extremely bad social<br />

impact." He has been sentenced to<br />

death, although this ruling is subject<br />

to appeal. (Reuters 2007)<br />

Further complicating the supply<br />

chain of healthcare products are the<br />

inconsistencies in intellectual<br />

property rights (IPR) protection<br />

throughout the world. Counterfeiting<br />

can be enabled by laws that do not<br />

adequately protect IPR.<br />

Take Russia, <strong>for</strong> example. Russian<br />

manufacturers are required to submit<br />

7 Other examples include high profile cases related<br />

to problems with ingredients <strong>for</strong> pet food,<br />

toothpaste and toys.<br />

- 17 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

documentation and in<strong>for</strong>mation to<br />

the federal body of control <strong>for</strong> quality<br />

medicines. (Stratchounski and<br />

Rozenson 1999) After the<br />

registration process has been<br />

completed, the drug is included in<br />

the state register of medicines.<br />

Serious concerns regarding the<br />

intellectual property rights of the<br />

applicants have been raised<br />

throughout the history of this system<br />

because submitted in<strong>for</strong>mation is not<br />

protected. As such, the in<strong>for</strong>mation is<br />

available so that therapeutically<br />

accurate counterfeits can be<br />

produced. <strong>The</strong> accuracy of the<br />

<strong>for</strong>ged product has contributed to a<br />

lack of public outrage or immediacy<br />

on the part of government officials.<br />

Despite this, some legislative activity<br />

has occurred regarding the issue.<br />

Amendments to the existing<br />

legislation were included in the RF<br />

Ministry of Health Program <strong>for</strong> 2002.<br />

Included in the proposed<br />

amendments were the<br />

recommendations <strong>for</strong> “a more<br />

accurate definition of counterfeit<br />

medication 8 .” (AAIPM and CIPR<br />

2002) Please see Appendix A <strong>for</strong> a<br />

more thorough discussion on<br />

intellectual property issues as they<br />

relate to counterfeiting, with a focus<br />

on Russia.<br />

It is impossible to completely<br />

characterize the human and financial<br />

impacts of counterfeiting. As<br />

mentioned previously, the lack of a<br />

standardized language surrounding<br />

the issue is a contributor to the<br />

disparity of statistics surrounding<br />

counterfeiting. Some studies include<br />

deaths and illnesses associated with<br />

substandard medications in their<br />

8 Emphasis added<br />

reports of counterfeit, others do not.<br />

<strong>The</strong> consequences associated with<br />

uplabeling (labeling a product at a<br />

level of increased strength) and the<br />

reselling of expired product may or<br />

may not be reported as<br />

counterfeiting, depending on the<br />

country of report. Further clouding<br />

the exact figures is the sophistication<br />

and precision of the counterfeits,<br />

making a reliable estimate of the<br />

magnitude of the problem all but<br />

impossible. (Kramer 2006)<br />

Additionally, there is a lack of<br />

consumer awareness and voice<br />

surrounding this issue, so that<br />

counterfeit products may go<br />

unreported.<br />

“Patients are generally unable<br />

to tell whether a counterfeit pill<br />

contains the correct active<br />

ingredients. It may take weeks<br />

or months to notice that therapy<br />

is failing, and the cause of the<br />

failure may not be linked with<br />

the counterfeits. Counterfeits<br />

may be introduced into<br />

legitimate supply chains,<br />

diluting therapy but making the<br />

counterfeiting more difficult to<br />

observe and trace.” (Outterson<br />

2004)<br />

<strong>The</strong> entry of counterfeit product into<br />

the legitimate supply chain in Britain<br />

serves as a recent example. Parallel<br />

traders were shown to be an entry<br />

point <strong>for</strong> counterfeit Zyprexa<br />

(olanzapine).<br />

“It is the first time regulators<br />

have traced fakes to parallel<br />

traders- the intermediaries<br />

who buy drugs cheaply<br />

elsewhere in Europe and<br />

resell them in higher-priced<br />

- 18 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

markets such as the UK.”<br />

(Jack 2007)<br />

Regardless of how one characterizes<br />

counterfeiting and substandard<br />

medications, or whether or not they<br />

are reported, serious consequences<br />

can be associated with these issues.<br />

Costs are not limited to loss of<br />

profits, goodwill and trust on the part<br />

of the healthcare products<br />

companies, or even to the victims (it<br />

was estimated that 192,000 people<br />

were killed in 2001 as a result of<br />

counterfeit drugs) (Wertheimer and<br />

Chaney 2003). <strong>The</strong>y are farther<br />

reaching.<br />

Counterfeit drugs help to increase<br />

the drug resistance of some of the<br />

deadliest infectious diseases, such<br />

as HIV/AIDS, malaria and<br />

tuberculosis (Yankus 2006). <strong>The</strong><br />

absence of the correct level of a<br />

drug’s active ingredient allows<br />

stronger strains of the<br />

microorganism causing the disease<br />

to multiply and adapt. Additionally,<br />

“if supplies of vaccinations become<br />

tainted with counterfeit, ineffective<br />

vaccines, people’s willingness to use<br />

them may be reduced.” (O'Mathuna<br />

and McAuley 2005)<br />

Additionally, though rarely<br />

considered openly, are the<br />

opportunity costs. With the attrition of<br />

differential pricing comes the erosion<br />

of the ability to invest in research<br />

and development; precluding the<br />

industry’s ability to create the<br />

lifesaving therapies of the next<br />

generation.<br />

Costs of Illicit Activities<br />

Many reasons conspire to encourage<br />

illegal activities in the healthcare<br />

supply chain. <strong>The</strong>se include:<br />

- 19 -<br />

• Lax penalties,<br />

• <strong>The</strong> rise in technology which allows<br />

<strong>for</strong> easy production of<br />

many medical products,<br />

• <strong>The</strong> use of “lifestyle” medicines<br />

• Cottage industries that use unemployed<br />

skilled labor<br />

• <strong>The</strong> rise of the internet pharmacy<br />

• An increase in the self prescribing<br />

culture<br />

• <strong>The</strong> potential <strong>for</strong> enormous<br />

profit margins (in part due to differential<br />

pricing, in part due to<br />

the high value of pharmaceuticals<br />

in relation to their bulk or<br />

size)<br />

• <strong>The</strong> relative ease with which<br />

pharmaceuticals can be hidden<br />

and transported<br />

• <strong>The</strong> nature of the product: sick,<br />

sometimes desperate people<br />

are open <strong>for</strong> exploitation<br />

• Complexities in the medical industry<br />

supply chain<br />

• <strong>The</strong> globalization of the drug industry<br />

and free trade, making<br />

distribution of products easier<br />

(Anonymous 2006)<br />

Illegal activity is a problem<br />

throughout the world, though the<br />

figures are not exact (<strong>for</strong> the reasons<br />

discussed). A review of global data<br />

indicates counterfeiting and<br />

substandard products to be a<br />

significant problem. (See Appendix<br />

B)<br />

<strong>The</strong> WHO estimates that counterfeit<br />

drugs account <strong>for</strong> as much as 10%<br />

of global pharmaceutical trade and<br />

are worth between $35 billion and 44<br />

billion annually. (Kimura, Nishizawa<br />

et al. 1999) In testimony be<strong>for</strong>e the


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Government Committee on Re<strong>for</strong>m,<br />

Peter Pitts, <strong>for</strong>mer Associate<br />

Commissioner of the FDA and<br />

current President of the US Center<br />

<strong>for</strong> Medicines in the Public Interest,<br />

predicted that counterfeit drug sales<br />

will have an annual growth rate of<br />

13% through 2010, when<br />

counterfeiting reaches US $ 75<br />

billion in revenues globally.<br />

If accurate, this would represent an<br />

increase of more than 92% from<br />

2005, and mean that the growth rate<br />

<strong>for</strong> counterfeit drug products is<br />

nearly twice that of legitimate ones.<br />

(World Health Organization 2006).<br />

Data from the Pharmaceutical<br />

Security Institute (PSI) corroborates<br />

Pitts’ testimony; pharmaceutical<br />

counterfeiting is a global problem<br />

(see Table 1), and it is growing (see<br />

Table 2).<br />

Table 1-Countries where the most drug<br />

incidents occur- Source- Pharmaceutical<br />

Security Institute- As quoted by USA<br />

Today (Appleby 2005)<br />

Fake Diverted <strong>The</strong>ft Total<br />

US 32 30 14 76<br />

Columbia 41 15 4 60<br />

China 56 3 0 59<br />

Russia 40 8 2 50<br />

India 36 3 0 39<br />

Peru 21 4 0 25<br />

Ukraine 23 1 0 24<br />

Brazil 3 7 12 19<br />

Israel 17 1 0 18<br />

Mexico 6 5 6 17<br />

UK 14 2 1 17<br />

Table 2- Continuing Increase in the Detection of Counterfeit Medicines- Source- PSI<br />

2006 as Cited in International Federation of Pharmaceutical Manufacturers and<br />

Associations (IFPMA) Presentation<br />

2004 2005 % change<br />

# of counterfeiting incidents 557 781 + 40%<br />

# of countries connected to counterfeiting incidents 67 89 + 32%<br />

- 20 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Table 3- Published Counterfeiting Rates-<br />

<strong>The</strong> Developing World<br />

Country<br />

counterfeiting rate<br />

<strong>Global</strong> 8-10% 4 and 5<br />

Developing Countries 25% 5<br />

Africa<br />

Gabon<br />

Ghana<br />

Kenya<br />

Between 25% and 90% 1*<br />

Mali<br />

Mozambique<br />

Sudan<br />

Zimbabwe<br />

Nigeria 50% 2<br />

Angola 70% 6<br />

Latin America<br />

Argentina<br />

Columbia<br />

Mexico<br />

1) (Pincock 2003) * Study indicated this to be the<br />

percentage that failed quality assurance testing<br />

2) (Hu 2005)<br />

3) (Wechsler 2003)<br />

4) (Wertheimer and Chaney 2003)<br />

5) (World Health Organization 2006)<br />

6) (World Health Organization 2006)<br />

Drug counterfeiting has universal<br />

appeal, but is particularly notable in<br />

developing countries.<br />

Illicit behavior regarding<br />

pharmaceuticals is prevalent in poor<br />

countries because they often lack<br />

the resources to <strong>for</strong>tify their drug<br />

supply. According to <strong>for</strong>mer WHO<br />

Executive Director of Health<br />

Technology and Pharmaceuticals,<br />

Yashuhiro Suzuki, “No country is<br />

immune from the threat of counterfeit<br />

drugs, but those with weakly<br />

- 21 -<br />

40% 3<br />

Southeast Asia<br />

Cambodia 53% 2<br />

Indonesia 50% 2<br />

Thailand 53% 2<br />

Vietnam 53% 2<br />

Philippines 8% 4<br />

regulated pharmaceutical markets<br />

suffer most.” (Wertheimer and<br />

Chaney 2003)<br />

Developing countries are also an<br />

easy target <strong>for</strong> counterfeiters<br />

because of the serious need <strong>for</strong> antimalarials<br />

and other drugs and no<br />

hope of controlling the<br />

pharmaceutical supply chain due to<br />

under-funded governments. Table 3<br />

shows reported rates <strong>for</strong> counterfeit<br />

drugs from several developing<br />

countries.<br />

Appendix B reveals available<br />

statistics regarding incidents<br />

associated with counterfeit and<br />

substandard medications from<br />

around the world.


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Although the prevalence of<br />

counterfeit drugs entering the<br />

“developed” world is reported to be<br />

less than that in developing<br />

countries, no place is immune to its<br />

impacts, “Counterfeit drugs also<br />

pose a danger to public health and<br />

safety in developed countries though<br />

the issues are somewhat different.<br />

<strong>The</strong>re, many of the counterfeit drugs<br />

are not taken <strong>for</strong> life-threatening<br />

illnesses, but as lifestyle medicines.<br />

Drugs taken <strong>for</strong> erectile dysfunction,<br />

to control cholesterol levels and to<br />

enhance athletic per<strong>for</strong>mance make<br />

up the bulk of the illicit trade.”<br />

(O'Mathuna and McAuley 2005)<br />

One way that counterfeit drugs are<br />

introduced without notice into the<br />

supply chain is the complicated<br />

series of ownerships which take<br />

place. “<strong>The</strong> complex nature of the<br />

supply chain across Europe, results<br />

in some medicines exchanging<br />

hands many times be<strong>for</strong>e reaching<br />

the patient. This creates more<br />

opportunities <strong>for</strong> counterfeit products<br />

to enter the supply chain than if the<br />

products were sourced nationally.<br />

Combined with the accession of ten<br />

member states that are significantly<br />

poorer than the rest of the EU and<br />

that have both current and historic<br />

trading ties with the <strong>for</strong>mer Soviet<br />

Union it is almost inevitable that<br />

counterfeit medicines will enter the<br />

EU supply chain.” (Anonymous<br />

2004)<br />

markets that will bear the higher<br />

price. Data from the Pharmaceutical<br />

Security Institute suggests that the<br />

prevalence of counterfeiting in<br />

Europe is on the rise, as indicated by<br />

their Counterfeit Incident System.<br />

(see Figure 1) “Eighteen European<br />

countries were involved in incidents<br />

and the region jumped from 43<br />

incidents in 2004 to 130 in 2005.<br />

This represented an approximate<br />

300% increase in a year.” (PSI<br />

Situational Report and Pfizer 2005)<br />

Counterfeit pharmaceuticals are also<br />

a documented problem in the United<br />

States. In fact, according to<br />

Katherine Eban, author of<br />

Dangerous Doses: How<br />

Counterfeiters are Contaminating<br />

America’s Drug Supply (Eban 2005),<br />

“America has become the go-to<br />

market <strong>for</strong> counterfeiters because we<br />

pay the highest prices of anyone in<br />

the world.” (Appleby 2005)<br />

Documented cases of counterfeit<br />

drugs are increasing in the US. In<br />

the early nineties, the FDA average<br />

5 incidents of counterfeiting a year,<br />

but by 2001, the number had risen to<br />

21 reported cases and has been<br />

increasing in the time since. (See<br />

Figure 2)<br />

As mentioned, the opportunity <strong>for</strong><br />

arbitrage, and the presence of an<br />

environment of parallel trade,<br />

presents an attractive opportunity <strong>for</strong><br />

counterfeiters because, in many<br />

cases, it is more easily done than<br />

diverting legitimate product to<br />

- 22 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Figure 1- Counterfeit Incidents in<br />

the European Union- Adapted<br />

from Pfizer’s Safeguarding the<br />

integrity of the medicines supply<br />

chain in Europe- as reported to<br />

the PSI Counterfeit Incident<br />

System <strong>for</strong> 2005.<br />

- 23 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Figure 2- Counterfeit cases<br />

opened by FDA per fiscal year-<br />

(Bernstein 2006)<br />

<strong>The</strong> number of counterfeit drug cases<br />

opened by the FDA dropped in<br />

2005 and 2006 from a spike in 2004;<br />

nonetheless, an upward trend is present<br />

across the available data.<br />

When asked about the drop in cases<br />

<strong>for</strong> 2005, FDA Associate Commissioner,<br />

Randall Lutter, commented<br />

that, "the decline [2005 versus 2004]<br />

may also exist because some new<br />

cases, after further research, are<br />

found to relate to the large number of<br />

existing ones," according to a prepared<br />

statement. "In reality we cannot<br />

identify the exact causes of<br />

changes in the number of new counterfeit<br />

drug cases opened each<br />

year."(Lutter 2005)<br />

In a March 2006 statement, FDA<br />

Deputy Commissioner <strong>for</strong> Medical<br />

and Scientific Affairs, Scott Gottlieb,<br />

- 24 -<br />

mentioned that the spike in 2004<br />

may have been from an “increased<br />

awareness and vigilance”. (Gottlieb<br />

2006) He also clarified that the number<br />

of “new counterfeit drug cases<br />

opened” did not represent the specific<br />

number of “ongoing cases”.<br />

(Gottlieb 2006)<br />

Weakening control over importation<br />

of pharmaceuticals into the US is<br />

also a growing concern. <strong>The</strong> exact<br />

figures regarding the number of<br />

drugs that are purchased from other<br />

countries is unknown “but it is<br />

estimated that Americans buy $800<br />

million in drugs from Mexico.. [and]<br />

in 2004 over two million U.S.<br />

residents purchased over twelve<br />

million prescriptions from Canada.”<br />

(Shepherd 2005) Not surprisingly,<br />

the rising presence of personal<br />

computers and internet websites has<br />

fueled the growth of drug<br />

importation. “From 2003 to 2004,<br />

there has been a 1000% increase in<br />

the number of drug packages


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

destined <strong>for</strong> U.S residents.”<br />

(Shepherd 2005) In a statement<br />

be<strong>for</strong>e the Senate Committee on<br />

Government (US) Affairs, Norm<br />

Coleman (R- MN) indicated that<br />

consumer internet spending on drug<br />

products exceeded $3.2 billion in<br />

2003. (Coleman 2004)<br />

To provide an “objective snapshot of<br />

the gravity of the situation;” he<br />

provided staggering statistics from<br />

several major international airports in<br />

the U.S.<br />

“Senior Customs officials at JFK<br />

[John Fitzgerald Kennedy International<br />

Airport, New York, New<br />

York, US] estimate that 40,000<br />

parcels containing drugs are imported<br />

through that airport on a<br />

daily basis. During last summer’s<br />

FDA/Customs blitz, 28% of the<br />

drugs tested were controlled substances.”<br />

(Coleman 2004)<br />

According to Coleman, this suggests<br />

that 3,763,200 parcels containing<br />

controlled substances are arriving to<br />

the US through JFK on an annual<br />

basis. Statistics Coleman cited from<br />

Chicago’s O’hara Airport (IL), home<br />

of the nation’s fifth largest International<br />

Mail Branch (IMB) indicate that<br />

approximately 4,300 of the 16,600<br />

parcels that arrive daily contain drug<br />

products imported <strong>for</strong> personal use.<br />

“Inspectors at Miami [FL] IMB estimate<br />

that as many as 30,000 parcels<br />

that contain drug products are imported<br />

through Miami each day.<br />

This means that as many as 6 million<br />

parcels containing drugs are imported<br />

annually through this one<br />

IMB.” (Coleman 2004)<br />

At the request of Senator Coleman,<br />

the Government Accounting Office<br />

- 25 -<br />

(GAO- US) purchased pharmaceutical<br />

products from both domestic and<br />

<strong>for</strong>eign internet sites. Among other<br />

problems illuminated by the study,<br />

the GAO “used the Internet to purchase<br />

from <strong>for</strong>eign pharmacies<br />

counterfeit versions of American<br />

drugs, pharmaceuticals that have not<br />

been approved by the FDA, counterfeit<br />

drugs [sic], damaged products,<br />

and drugs without proper packaging,<br />

no warning in<strong>for</strong>mation, or instructions<br />

<strong>for</strong> use.”<br />

<strong>The</strong> a<strong>for</strong>ementioned studies indicate<br />

illegal arbitrage and counterfeiting to<br />

be growing, global issues. When<br />

considered in combination with the<br />

increasingly global marketplace,<br />

environment of parallel trade and<br />

differential pricing of healthcare<br />

products, the case <strong>for</strong> standardized<br />

in<strong>for</strong>mation systems would be<br />

sufficient. However, there are further<br />

reasons and stakeholders that<br />

should be considered.<br />

<strong>The</strong> Hospital Supply<br />

Chain and the Need <strong>for</strong><br />

Standardization<br />

To this point in the document, discussion<br />

of the supply chain has not<br />

included the varied entities that deliver<br />

therapies to patients at the end<br />

of the chain. Like the products of<br />

healthcare, these too, are varied.<br />

Healthcare products may be administered<br />

by the patient themselves, a<br />

trained or untrained care giver or by<br />

a healthcare provider. <strong>The</strong> settings<br />

of care delivery are equally as varied:<br />

including homes, ambulatory<br />

care settings and acute care facilities.<br />

For the purpose of clarity of<br />

discussion, in<strong>for</strong>mation presented<br />

here will be limited to the complexi-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

ties of the hospital supply chain and<br />

the potential benefits standardized<br />

in<strong>for</strong>mation offers <strong>for</strong> this setting.<br />

It has already been established that<br />

the supply chains that deliver<br />

healthcare products to hospitals are<br />

complex and lack transparency.<br />

Once these products arrive at the<br />

hospital, these intricacies continue.<br />

Overview of the Hospital<br />

Supply Chain<br />

Upon arrival a myriad of products<br />

must be cataloged, deployed and<br />

used efficiently and correctly.<br />

Management of the movement of<br />

these products can be handled in<br />

a variety of ways.<br />

DeScioli (2005) describes various<br />

models that are currently used to<br />

manage hospital inventories. His<br />

descriptions include: standard,<br />

stockless and vendor managed<br />

inventories (please see Appendix<br />

C <strong>for</strong> a description of each).<br />

supply chain. Likewise, each<br />

ward within a hospital is unique.<br />

<strong>The</strong> number of products and<br />

demand of those products, <strong>for</strong><br />

example, varies greatly from an<br />

Emergency Room to a Cardiac<br />

Cath Lab to an Intensive Care<br />

Unit.”(DeScioli 2005)<br />

As a result, the optimal supply<br />

system <strong>for</strong> one hospital may not be<br />

ideal <strong>for</strong> another hospital or even <strong>for</strong><br />

other wards within the same one.<br />

However, the need <strong>for</strong> in<strong>for</strong>mation<br />

regarding the products that are used<br />

throughout the hospital is<br />

undisputedly important because it is<br />

critical in the prevention of<br />

medication errors as well as the<br />

optimization of supply chain<br />

efficiencies.<br />

Complications of managing hospital<br />

inventories include the fact that<br />

items to be tracked are varied.<br />

Healthcare products used in<br />

medical settings are large and<br />

small, durable and expendable,<br />

disposable and reprocessed, numerous<br />

and few, as well as critical<br />

and non-critical to care. As such,<br />

the in<strong>for</strong>mation that is relevant<br />

varies from item to item.<br />

Further, a<br />

“hospital’s size, geographic location,<br />

diversification and various<br />

specializations all affect the<br />

nature of its business, and,<br />

hence, the requirements of its<br />

- 26 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Medication Error<br />

<strong>The</strong> National Coordinating Council<br />

<strong>for</strong> Medication Error Reporting and<br />

Prevention (NCC MERP) defines a<br />

medication error as<br />

"any preventable event that<br />

may cause or lead to<br />

inappropriate medication use or<br />

patient harm while the<br />

medication is in the control of<br />

the healthcare professional,<br />

patient, or consumer. Such<br />

events may be related to<br />

professional<br />

practice,<br />

healthcare<br />

products,<br />

procedures, and systems,<br />

including prescribing; order<br />

communication; product<br />

labeling, packaging, and<br />

nomenclature; compounding;<br />

dispensing; distribution;<br />

administration; education;<br />

monitoring; and use."<br />

(National Coordinating Council<br />

<strong>for</strong> Medication Error Reporting<br />

and Prevention)<br />

One way that medication errors<br />

manifest themselves is as an<br />

adverse drug event (ADE). Bates,<br />

Cullen et al. (1995) define ADEs as<br />

"injury due to medication." By<br />

their nature, ADEs can be either<br />

preventable<br />

or<br />

unpreventable. Events that are<br />

attributable to product quality defects<br />

or medication errors are examples of<br />

preventable events, while things that<br />

cannot be <strong>for</strong>eseen or avoided<br />

are unpreventable. Examples of<br />

unpreventable events include things<br />

like an unknown allergic reaction to a<br />

medication, or unavoidable side<br />

effects, such as nausea and fatigue<br />

induced by chemotherapy. (See<br />

Figure 3)<br />

Figure 3- Sources of Risk from<br />

Medicine<br />

- 27 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Just as the World Health<br />

Organization (WHO) has called <strong>for</strong><br />

standardization in the language<br />

surrounding counterfeiting, the<br />

Institute of Medicine has expressed<br />

similar needs regarding medication<br />

error.<br />

Regardless, the existing systems<br />

that are used to report ADEs and<br />

errors indicate that they are an issue<br />

in need of attention. (see Figures 4<br />

and 5)<br />

“In carrying out this study the<br />

IOM committee identified<br />

enormous gaps in the<br />

knowledge base with regard to<br />

medication errors. Current<br />

methods <strong>for</strong> generating and<br />

communicating in<strong>for</strong>mation<br />

about medications are<br />

inadequate and contribute to<br />

the incidence of errors.<br />

Likewise, incidence rates of<br />

medication errors in many care<br />

settings, the costs of such<br />

errors, and the efficacy of<br />

prevention strategies are not<br />

well-understood.” (Institute of<br />

Medicine of the National<br />

Academies 2006)<br />

As is the case with illicit activities, a<br />

lack of standardized language<br />

surrounding the issue of medication<br />

error can cause confusion in<br />

reporting systems. Some studies<br />

use the term ADE and error<br />

interchangeably, others are more<br />

specific in their reporting<br />

mechanisms, counting any<br />

preventable event as an ADE.<br />

Additionally, as with the illicit<br />

activities previously discussed, it is<br />

likely that many events go unreported<br />

<strong>for</strong> a variety of reasons.<br />

<strong>The</strong>re<strong>for</strong>e, quantifying the precise<br />

costs, both human and financial, is<br />

impossible.<br />

- 28 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Figure 4- Adverse Event Reports<br />

by Calendar Year (Source-CDER<br />

2005 Report to the Nation)- Note<br />

not all ADEs are attributable to<br />

medication error (See Figure 3)<br />

In 1999, the Institute of Medicine<br />

published “To err is Human,”<br />

reporting that in 1997, between<br />

44,000- 98,000 people in America,<br />

alone, die each year as the result of<br />

medication errors. “Even<br />

when using the lower estimate,<br />

deaths due to medical errors exceed<br />

the number attributable to the 8 th<br />

leading cause of death. More people<br />

die in a given year as a result of<br />

medical errors than from motor<br />

vehicle accidents (43,458), breast<br />

cancer (42,297) or AIDS (16, 516).”<br />

(Institute of Medicine of the National<br />

Academies 2006)<br />

Estimates of cost <strong>for</strong> the US figures<br />

include the expense of additional<br />

care that is necessitated by the<br />

errors, as well as lost income and<br />

household productivity from resultant<br />

disability. <strong>The</strong>se have been<br />

estimated at $17-29 billion annually.<br />

Estimates <strong>for</strong> the cost of an adverse<br />

drug event (ADE) <strong>for</strong> each patient<br />

range from $2,000-$5,000 USD.<br />

(Healthcare<br />

Distribution<br />

Management Association 2004)<br />

ADEs and medication errors are<br />

certainly not limited to the US.<br />

Estimates from the UK indicate that<br />

“about 10% of inpatient episodes<br />

result in errors of some kind, about<br />

half [of which] are preventable.”<br />

(Department of Health 2007) 9 A<br />

study published by Vincent and<br />

Neale et al. (2001) suggested that of<br />

the approximately 8 million hospital<br />

admissions that occur in England<br />

9 Note the inconsistency in terminology- preventable<br />

vs unpreventable and error.<br />

- 29 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

each year, about 850,000 result in a<br />

patient safety incident, costing the<br />

National Health Service (NHS)<br />

approximately £2 billion in extra<br />

hospital days. (Department of Health<br />

2007)<br />

Statistics such as these have led<br />

government officials in the United<br />

Kingdom (UK) to institute a 10 digit<br />

patient ID number. <strong>The</strong> ID number<br />

serves as an attempt to ensure<br />

therapies are delivered to the correct<br />

patient. One obstacle to the effective<br />

implementation of the 10-digit<br />

system is the likelihood of<br />

transcription errors. (see Figure 5)<br />

This has led the Department of<br />

Health (DOH) to call <strong>for</strong> the use of<br />

standardized in<strong>for</strong>mation, delivered<br />

through the use of automatic<br />

identification and data capture<br />

technologies (AIDC). (Department of<br />

Health 2007)<br />

“<strong>The</strong> case <strong>for</strong> coding is<br />

compelling, but all<br />

stakeholders need to work to<br />

commonly agreed standards If<br />

the benefits are to be realize<br />

fully. <strong>The</strong> Department of<br />

Health is recommending that<br />

the <strong>GS1</strong> System should be<br />

adopted throughout the<br />

healthcare system in England,<br />

both <strong>for</strong> manufactured<br />

products and <strong>for</strong> coding<br />

systems used within<br />

healthcare settings, such as<br />

patient identification codes on<br />

wristbands.” (Department of<br />

Health 2007)<br />

Statistics reported from New Zealand<br />

regarding medication error are<br />

comparable to those reported in the<br />

US and the UK. <strong>The</strong> New Zealand<br />

Quality of Healthcare Study<br />

(NZQHS) (Davis, Lay-Yee et al.<br />

2001) indicates that in-hospital<br />

adverse drug events occur at a rate<br />

of 10%. (Anderson 2007) Of the<br />

10%, approximately 7.5% are<br />

classified as preventable.<br />

Researchers further indicate that<br />

0.78 percent of hospital admissions<br />

in New Zealand result in a<br />

preventable adverse drug event, a<br />

medication error.<br />

An extrapolation of the study<br />

suggests,<br />

“that in New Zealand, each<br />

year, about 5,000 patients are<br />

subject to medication errors.<br />

As a result of these errors about<br />

150 patients die, over 400 are<br />

permanently disabled and<br />

nearly 3,500 are disabled <strong>for</strong><br />

less than one year.” (Anderson<br />

2007)<br />

As is the case with the UK data, this<br />

has led government officials in New<br />

Zealand to investigate the cost<br />

effectiveness of implementing AIDC.<br />

Medication errors, which are a<br />

subset of ADEs, can occur during<br />

several of the steps and systems<br />

involved in a patient’s care. (see<br />

Figure 5) 10<br />

10 Figure 5 is based on the system employed in<br />

New Zealand (Anderson, 2007). Anderson<br />

(2007) notes that the US system has more transcription<br />

steps, due to the use of clinical notes.<br />

- 30 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

- 31 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Systems that must be effectively<br />

integrated include the patient’s<br />

health record, or chart. This may be<br />

written or an electronic health record<br />

(EHR). Regardless of the<br />

technology employed, the chart<br />

contains critical in<strong>for</strong>mation<br />

regarding the patient’s history that<br />

must be considered during virtually<br />

all steps of the therapy.<br />

After consulting with the patient and<br />

the history recorded in their chart, a<br />

therapy is ordered by a healthcare<br />

provider. As with the chart, orders<br />

can be conveyed in written or<br />

electronic <strong>for</strong>mats. Computerized<br />

Physician Entry Systems (CPOEs)<br />

allow physicians to prescribe<br />

therapies without having to write an<br />

order.<br />

Errors that occur during this phase of<br />

the process are called “prescription<br />

errors.” (see Figure 5) <strong>The</strong> types of<br />

errors that occur during this phase<br />

include prescribing inappropriate<br />

therapies <strong>for</strong> the patient’s age,<br />

weight, gender or condition as well<br />

as missing potential drug interactions<br />

and allergies. It has been suggested<br />

that insufficient knowledge of<br />

medication,<br />

patient<br />

miscommunication, poor quality<br />

per<strong>for</strong>mance from providers and<br />

poor documentation all contribute to<br />

prescription error. A number of<br />

studies have cited prescribing as the<br />

principle source of medication errors,<br />

“estimating incidence rates of 18.9 to<br />

58.4 percent.” (Bates, Cullen et al.<br />

1995; Lesar, Briceland et al. 1997;<br />

Gurwitz, Field et al. 2000; USP<br />

2004)<br />

After being generated by the<br />

healthcare provider, orders are<br />

transferred to either the pharmacy or<br />

- 32 -<br />

the ward nurse. On the ward, the<br />

nurse will interpret the order and<br />

retrieve the therapy from standard,<br />

stock supplies. In the pharmacy, the<br />

order must be transcribed into a<br />

database. Following this step, a<br />

label is created and the medication is<br />

filled by a technician and checked by<br />

a pharmacist. Many of the<br />

prescription errors discussed<br />

previously are averted by nurses,<br />

pharmacists and technicians who<br />

review the charts.<br />

Problems with transcription and<br />

preparation can occur during this<br />

phase of the process. Systems that<br />

do not employ a CPOE are<br />

particularly vulnerable to<br />

transcription errors. (see Figure 5)<br />

Transcription is the official term used<br />

<strong>for</strong> translating and processing<br />

orders. (Aspden, Wolcott et al. 2006)<br />

Transcription errors have been noted<br />

to be 12%. (Anderson 2007)<br />

After the order has been entered into<br />

the pharmacy’s system, the therapy<br />

must then be counted, measured,<br />

mixed, repackaged and labeled <strong>for</strong><br />

the patient, providing the potential <strong>for</strong><br />

further error. Errors that occur at this<br />

stage are referred to as preparation<br />

and dispensing errors. (see Figure<br />

5)<br />

A study of one hospital in the UK and<br />

two in Germany found a rate of<br />

preparation errors of 26 % per<br />

observed preparation (88<br />

preparation errors out of 337<br />

observations). (Wirtz, Taxis et al.<br />

2003; Aspden, Wolcott et al. 2006)<br />

Reported rates of preparation errors<br />

are varied. Rates as high as 49%<br />

have been reported in the literature<br />

(Taxis and Barber 2003).


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

“Once the checks have been<br />

completed the medication is<br />

approved and dispensed to the ward<br />

where a nurse will administer the<br />

medication after checking the ‘five<br />

rights’ [in the case of a drug].”<br />

(Anderson 2007) It is during this<br />

phase that administration errors can<br />

occur. (see Figure 5) Administration<br />

errors are defined as, “a deviation<br />

from a prescriber’s valid prescription<br />

or the hospital’s policy in relation to<br />

drug administration, including failure<br />

to correctly record the administration<br />

of a medication.” (Haw, Dickens et<br />

al. 2005) Administrative tasks<br />

include simple steps, like retrieving<br />

the correct dose, to more complex<br />

tasks like physically administering<br />

the dose to the patient.<br />

Barker, Flynn et al. (2002) conducted<br />

a study that used 36 different<br />

healthcare facilities to examine the<br />

rate of administration errors.<br />

Excluding wrong-time errors, they<br />

reported an 11% rate of<br />

administration error. <strong>The</strong> authors<br />

noted significant variation of findings,<br />

with study facilities reporting rates<br />

that varied from 0-26%, with an 8.3%<br />

median value <strong>for</strong> the study.<br />

Aspden extrapolated Barker’s data<br />

into the following conclusions,<br />

“Since a hospital patient<br />

receives on average at least<br />

ten medication doses per day,<br />

this figure suggests that on<br />

average, a hospital patient is<br />

subject to one administration<br />

error per day. Further, since<br />

prescribing and administration<br />

errors account <strong>for</strong> about<br />

three-fourths of medication<br />

errors (Leape, Bates et al.<br />

1995), the committee<br />

- 33 -<br />

conservatively estimates that<br />

on average, a hospital patient<br />

is subject to at least one<br />

medication error per day.”<br />

(Aspden, Wolcott et al. 2006)<br />

<strong>The</strong> system <strong>for</strong> delivering care is<br />

burdened with the need <strong>for</strong><br />

in<strong>for</strong>mation, from beginning to end.<br />

Incorrect and/or inappropriate<br />

in<strong>for</strong>mation leads to errors, which<br />

are, un<strong>for</strong>tunately, well documented.<br />

“Each part of the sequence can<br />

create its own unique set of errors,<br />

individually and/or collectively, by<br />

failing to identify problems in the<br />

preceding steps or introducing new<br />

errors.” (Anderson 2007)<br />

<strong>The</strong> need <strong>for</strong> in<strong>for</strong>mation goes<br />

beyond what is pictured in Figure 5,<br />

which deals strictly with medication<br />

error and the hospital. Figure 6<br />

presents a more comprehensive<br />

view of the entities within the<br />

healthcare supply chain that require<br />

in<strong>for</strong>mation. Some of these players<br />

handle the product, others do not; all<br />

need in<strong>for</strong>mation about it.<br />

As such, the case <strong>for</strong> standardized<br />

systems <strong>for</strong> sharing in<strong>for</strong>mation is<br />

compelling. Governments like New<br />

Zealand (Anderson 2007), the UK<br />

(Department of Health 2007) and the<br />

US are calling integrated Health<br />

In<strong>for</strong>mation Technology (HIT)<br />

systems that can handle and track<br />

in<strong>for</strong>mation in a standardized<br />

fashion.


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Within the complex healthcare<br />

supply chains, there are diverse<br />

management in<strong>for</strong>mation systems<br />

that use a package’s identification.<br />

Inventory control, ordering, shipping,<br />

receiving and transactions all<br />

depend on accurate use of a<br />

package’s identification. <strong>The</strong><br />

identification code must be read and<br />

recorded in each firm’s records, and<br />

must also be transmitted to the next<br />

company in the chain, and,<br />

ultimately, to the healthcare provider.<br />

to convey the in<strong>for</strong>mation up and<br />

down the chain. Such a system not<br />

only has the potential to decrease<br />

medication error, but also to<br />

enhance the efficiency and<br />

profitability of the supply chain.<br />

<strong>The</strong>re has been significant interest in<br />

developing standardized in<strong>for</strong>mation<br />

that leverages automatic<br />

identification (Auto-ID) technologies<br />

- 34 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Automatic Identification<br />

in the Healthcare Industry<br />

Implementation of a system <strong>for</strong><br />

sharing in<strong>for</strong>mation more effectively<br />

has the potential to save lives and<br />

increase efficiencies. Anderson<br />

(2007) estimates, that<br />

implementation of a bedside<br />

verification system that leveraged<br />

barcodes <strong>for</strong> DHB hospitals in New<br />

Zealand would save 1,050 lives;<br />

prevent 2,800 permanent disabilities<br />

and 29,000 short term disabilities in<br />

that country alone.<br />

Work done by Nathan and Trinkaus<br />

(1996) suggests that implementation<br />

of more effective in<strong>for</strong>mation<br />

systems would not only impact on<br />

the well-being of the public, but also<br />

on hospital budgets. This group<br />

indicates that inventory management<br />

accounts <strong>for</strong> between 17% and 35%<br />

of a hospital’s total revenue. As<br />

such, small reductions in inventory<br />

management costs can significantly<br />

impact a hospital’s bottom line. “For<br />

example, a hospital running at 5%<br />

profitability, with 30% inventory<br />

management costs could improve<br />

profitability by 60% with a 10%<br />

reduction in its inventory costs.<br />

Hospitals can then reinvest these<br />

savings into equipment and<br />

personnel that further enhance<br />

patient care.” (DeScioli 2005)<br />

<strong>The</strong> systems that try to capture these<br />

enhanced efficiencies are varied, but<br />

all rely on more efficiently reading,<br />

recording and transferring in<strong>for</strong>mation.<br />

In low technology situations,<br />

identification may be read by a human,<br />

recorded with handwriting and<br />

mailed by post.<br />

- 35 -<br />

In higher technology processes, the<br />

in<strong>for</strong>mation is scanned using bar<br />

codes or RFID, populating a database<br />

and electronically transmitted.<br />

Electronic transmission can range<br />

from fax and e-mail to Electronic Data<br />

Interchange to internet based systems.<br />

<strong>Global</strong> distribution multiplies<br />

the number of systems, languages<br />

and variations in technology employed.<br />

Automatic Identification (Auto-ID)<br />

processes are changing the way<br />

supply chains operate throughout the<br />

world. Auto ID enabled processes<br />

are faster, more efficient and lower<br />

cost than human identification alone.<br />

<strong>The</strong>se technologies: radio frequency<br />

identification (RFID), bar codes,<br />

optical character recognition, voice<br />

recognition, vision systems,<br />

magnetic stripes, card technologies,<br />

and biometrics- can provide system<br />

benefits that are maximized when<br />

standardized and interoperable.<br />

Systems can also leverage their<br />

ability to mass serialize, uniquely<br />

identifying each unit of each product<br />

in the chain. (Healthcare Distribution<br />

Management Association 2004;<br />

Healthcare Distribution Management<br />

Association 2004; ECRI 2005; AIM<br />

2007)<br />

RFID and bar codes are the primary<br />

technologies currently being<br />

discussed. RFID in the global<br />

healthcare value chain largely<br />

relates to either high frequency (HF)<br />

or ultra high frequency (UHF)<br />

systems. Bar codes rely on onedimensional<br />

(1-D), two-dimensional<br />

(2-D), or composite code<br />

symbologies that are a combination<br />

of 1-D and 2-D, such as the <strong>GS1</strong><br />

reduced space symbology


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

(previously- UCC RSS) code. (See<br />

Appendix D <strong>for</strong> a review of the<br />

current state of bar code and RFID<br />

technology in healthcare settings).<br />

In order to garner system-wide<br />

benefits, Auto ID depends on the<br />

participation of the entire supply<br />

chain. (AIM 2007) (see Figure 6) To<br />

maximize the benefits of the<br />

technology, the system requires<br />

procedures that insure all trading<br />

partners gain value. As previously<br />

discussed, the partners are many<br />

and varied. Representative<br />

stakeholders (see the “Scope and<br />

Objectives” portion of this<br />

document), with varying global<br />

perspectives, from the<br />

pharmaceutical, medical device and<br />

biologics industries will need to be<br />

actively engaged in the creation of<br />

the data system.<br />

Those involved in the supply chain<br />

choose to adopt Auto ID<br />

technologies based on a careful<br />

consideration of the economic<br />

impact. Any decision to implement<br />

these technologies considers the<br />

cost of implementation as well as the<br />

projected benefits that the<br />

implementation would entail. It<br />

regards specific industry sectors,<br />

since the costs and benefits would<br />

vary <strong>for</strong> manufacturers, distributors,<br />

storage modes, and in-use<br />

applications. (Healthcare Distribution<br />

Management Association 2004)<br />

Studies of the Costs and<br />

Benefits of Auto ID in the<br />

Healthcare Supply Chain<br />

Various types of systems have been<br />

applied to address the problems<br />

associated with both medication<br />

errors and counterfeit healthcare<br />

products; many of these have been<br />

quite successful (see Appendices E<br />

and F) and show a great deal of<br />

promise <strong>for</strong> alleviating many of the<br />

problems facing healthcare<br />

distribution and delivery. (See G <strong>for</strong><br />

a review of relevant presentations on<br />

this subject).<br />

<strong>The</strong> need <strong>for</strong> a global standard <strong>for</strong><br />

identification is clear. A common<br />

language is needed, regardless of<br />

the characteristics of the systems<br />

that use it.<br />

Furthermore, a standard identification<br />

system is critical <strong>for</strong> modern<br />

supply chain management, which is<br />

based on principles of synchronization<br />

and data sharing. By sharing<br />

standardized supply and demand<br />

data, industries are better able to<br />

streamline processes and minimize<br />

the cost of inventory.<br />

Healthcare has been slower to adopt<br />

automatic identification than the grocery<br />

industry because it is so much<br />

more complex. Unlike the more<br />

consolidated grocery industry, in<br />

which the retailers mobilized to relatively<br />

quickly organize around the<br />

UPC bar code standard, the healthcare<br />

industry has adopted automatic<br />

identification on a piecemeal basis.<br />

But there is plenty of evidence that<br />

automatic identification can add efficiency<br />

and accuracy to healthcare<br />

supply chains. Some of the ways in<br />

which Auto ID can benefit healthcare<br />

include:<br />

• Effective order processing and<br />

transmittal <strong>for</strong> manufacturers,<br />

distributors and providers<br />

- 36 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

• Inventory control <strong>for</strong><br />

manufacturers, distributors and<br />

providers<br />

• Bills of lading and ownership<br />

documentation (electronic<br />

pedigree)<br />

• In<strong>for</strong>mation <strong>for</strong> regulators and<br />

customs agents<br />

• Integration with Computerized<br />

Physician Order Entry (CPOE)<br />

Systems<br />

• More effective utilization of<br />

devices and other supplies<br />

(accurate tracking of<br />

reprocessed equipment, <strong>for</strong><br />

instance)<br />

• Improved patient use validation<br />

o ensuring the five rights in<br />

the case of medication<br />

o ensuring the eight rights<br />

associated with medical<br />

devices<br />

• Effective recall activation,<br />

tracking and control of the<br />

reverse chain<br />

• Efficient billing and<br />

reimbursement<br />

• More effective public health<br />

emergency response- locate<br />

and divert product to where it is<br />

needed, even under chaotic<br />

circumstances<br />

• Improved level of evidence<br />

when prosecuting those<br />

suspected of illicit activities<br />

Studies that have investigated impact<br />

of Auto ID technologies on<br />

healthcare supply chains have generally<br />

returned favorable results,<br />

both human and financial. (For a<br />

more comprehensive listing of reviewed<br />

studies, see Appendices E<br />

and F. For reports of specific studies,<br />

see Appendix G).<br />

Manufacturing and Distribution<br />

Cost Studies<br />

Manufacturers of healthcare products<br />

bear the greatest cost <strong>for</strong> automatic<br />

identification, especially <strong>for</strong><br />

RFID. <strong>The</strong>re are fixed and variable<br />

costs. Fixed costs include equipment<br />

<strong>for</strong> applying tags and programming<br />

codes. <strong>The</strong> cost of software<br />

alone has been estimated at<br />

$183,000 <strong>for</strong> a $12 billion manufacturer<br />

looking to meet the RFID tagging<br />

requirements <strong>for</strong> a major retailer.<br />

<strong>The</strong> integration and testing of<br />

a new system is also crucial, estimated<br />

at $128,000 <strong>for</strong> consulting<br />

and integration, $315,000 <strong>for</strong> the<br />

time of the internal project team and<br />

$80,000 <strong>for</strong> tag and reader testing.<br />

(RFID System Components and<br />

Costs)<br />

<strong>The</strong> variable costs associated with<br />

any Auto ID system are the cost <strong>for</strong><br />

the tag and the cost to apply it. RF-<br />

ID systems have higher variable cost<br />

since the technology is more complex<br />

and so the tags are more expensive.<br />

Applying bar codes is practically<br />

free, since it is a simple addition<br />

to the print. Even if each bar<br />

code must carry a lot code or unique<br />

identifier, digital printing is less expensive<br />

than any RFID tags currently<br />

on the market. <strong>The</strong>re<strong>for</strong>e, bar codes<br />

are less expensive than RFID from<br />

the manufacturer’s point of view.<br />

However, a study conducted by the<br />

University of Texas found that, <strong>for</strong><br />

manufacturers the benefits of RFID<br />

outweigh the cost, even at the current<br />

adoption levels. Estimated annual<br />

benefits include (Barua, Mani et<br />

al. 2006):<br />

- 37 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

• Counterfeit avoidance: $4.31<br />

billion is lost due to counterfeiting,<br />

shrinkage and parallel trade<br />

(up-labeling). RFID could avoid<br />

these as well as an estimated<br />

$1.85 billion in cash flow savings<br />

and $6.32 billion in brand<br />

protection benefits.<br />

• Recall targeting: An AT Kearney<br />

study estimates savings<br />

from a targeted recall, verses<br />

the current broadcast recall<br />

ranges from $50,000 to<br />

$100,000 per year per $10 billion<br />

in revenue (based on more<br />

than 50% tagging penetration at<br />

the item or unit level) including<br />

the time saved on administering<br />

recalls. <strong>The</strong> potential annual<br />

value of RFID in such an efficient<br />

product recall would be<br />

$16.77 billion.<br />

• Inventory management: On one<br />

hand, stock-outs are estimated<br />

to cost $3.41 billion, of which<br />

16% may be eliminated by the<br />

use of RFID. On the other<br />

hand, the pharmaceutical industry<br />

is overstocked to maintain<br />

high levels of service (the annual<br />

inventory turns average<br />

only 1-2/year) which significantly<br />

increases carrying cost<br />

and expired product. An Accenture<br />

study estimates that<br />

RFID would reduce inventory<br />

levels by 10-30%. (Chappell,<br />

Ginsburg et al. 2002) This could<br />

be the greatest area of manufacturers’<br />

savings, $15.78 billion<br />

annually.<br />

• Sample management: Manufacturers’<br />

sales representatives<br />

spend an average of 5.5 hours<br />

per week on sample related inventory<br />

control and in<strong>for</strong>mation<br />

management. If RFID readers<br />

were used to report the status<br />

of physician samples, inventory<br />

and marketing in<strong>for</strong>mation<br />

management improvements are<br />

estimated at $12.73 billion.<br />

• Improved visibility in the clinical<br />

trial process: Assuming that RF-<br />

ID systems could reduce dosage<br />

and data entry errors, reduce<br />

stockouts, and reduce the<br />

duration of the clinical trial<br />

process by up to 5% (Towner<br />

2004), the estimated revenue<br />

gain could be nearly $370 million<br />

with an additional cash flow<br />

saving estimated at $159 million.<br />

A study conducted by the Healthcare<br />

Distribution<br />

Management<br />

Association (HDMA) Healthcare<br />

Foundation concurs with the UT<br />

study; despite significant up-front<br />

costs, the economics of<br />

implementing an Auto ID system are<br />

compelling <strong>for</strong> both manufacturers<br />

and distributors (US). (See Table 4)<br />

Large manufacturers may expect<br />

annual benefits in the tens of millions<br />

of dollars <strong>for</strong> products tagged at the<br />

item level. Large distributors may<br />

expect annual cost savings of at<br />

least $10 million per company if half<br />

or more products are EPC/RFID<br />

tagged. (Healthcare Distribution<br />

Management Association 2004)<br />

- 38 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong> major one-time cost is systems<br />

integration, which may reach $10<br />

million to $15 million or more, per<br />

company, <strong>for</strong> both large<br />

manufacturers and large distributors.<br />

HDMA found that the number of<br />

different systems in use drives up<br />

the largest component of startup<br />

costs - the costs associated with<br />

systems integration.<br />

“When the goal is to use EPC<br />

data throughout the enterprise<br />

via major systems such as<br />

ERP, WMS contracts, decision<br />

support, and data warehouse<br />

applications, the integration<br />

cost is estimated in the range<br />

of $10 million to $16 million. If<br />

EPC data is not used<br />

extensively, manufacturers and<br />

distributors may implement a<br />

lower-cost solution, such as<br />

developing a centralized<br />

database to house EPC data”.<br />

(Healthcare Distribution<br />

Management Association 2004)<br />

Table 4: ADT/Tyco Fire & Security,<br />

Alien Technology, Impinj, Intel,<br />

Symbol and Xterprise, 2006 pg11,<br />

version of HDMA 2004b<br />

This was estimated to cost<br />

approximately $2 million and was<br />

being considered because <strong>for</strong> one<br />

manufacturer, EPC/RFID was<br />

currently a low-priority budget item<br />

given current IT structures and<br />

priorities. (Healthcare Distribution<br />

Management Association 2004)<br />

Obviously, the expected benefits <strong>for</strong><br />

this manufacturer would also be<br />

lower.<br />

Distributors can also leverage the<br />

advantages of a standardized system<br />

that employs Auto ID. Distributors<br />

use bar codes <strong>for</strong> inventory and<br />

transaction systems to improve efficiency.<br />

<strong>Case</strong> codes with the stock<br />

keeping unit (SKU) number can be<br />

tied to distribution center in<strong>for</strong>mation<br />

systems <strong>for</strong> receiving, put away, inventory<br />

control and order picking.<br />

Orders are verified by scanning the<br />

code, reducing the likelihood of shipping<br />

the incorrect SKU. (Lionel 2002)<br />

- 39 -<br />

Some conveyor-based distribution<br />

centers print their own unique bar<br />

code stickers <strong>for</strong> each package ordered,<br />

and use the codes to sort the<br />

orders. This type of distribution cen-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

ter would benefit most from unique<br />

(mass serialized) identifiers <strong>for</strong> each<br />

package, since they could program<br />

the system to sort based on the identifier,<br />

eliminating the need to print the<br />

stickers.<br />

Fully integrated RFID systems are<br />

considered by many to be the next<br />

major technology wave <strong>for</strong> healthcare<br />

distribution. RFID would improve<br />

accuracy, especially if unique<br />

pedigree identification codes are<br />

employed, in addition to SKU numbers.<br />

<strong>The</strong> Healthcare Distribution<br />

Management Association has been<br />

convinced of the business and ethical<br />

case <strong>for</strong> RFID, and has published<br />

a position statement recommending<br />

the use of standard electronic product<br />

codes (Healthcare Distribution<br />

Management Association 2007):<br />

“HDMA supports the establishment<br />

of a consistent, industry-wide<br />

initiative collaborating<br />

with all members of the healthcare<br />

distribution supply chain to<br />

drive the adoption, implementation,<br />

and utilization of EPC<br />

tags. In addition, HDMA fully<br />

supports the development of<br />

appropriate infrastructures that<br />

will uniquely identify and track<br />

products and in<strong>for</strong>mation<br />

throughout the healthcare distribution<br />

supply chain. It is recommended<br />

that healthcare distributors<br />

develop the appropriate<br />

infrastructure <strong>for</strong> tracking<br />

and tracing of products utilizing<br />

the EPC.”<br />

<strong>The</strong> requirement <strong>for</strong> a pedigree (See<br />

Appendix F) will be easier <strong>for</strong> distributors<br />

to implement with an automatic<br />

identification system to relieve<br />

much of the paperwork burden.<br />

- 40 -<br />

Other potential benefits of<br />

implementing a system that employs<br />

Auto ID include increased supply<br />

chain integrity, meeting or exceeding<br />

legal requirements and supply chain<br />

partner mandates, better warehouse<br />

and inventory efficiency through<br />

inventory reduction and visibility,<br />

shrinkage and expiration controls,<br />

recall and return management, and<br />

system labor reduction. (Healthcare<br />

Distribution<br />

Management<br />

Association 2004)<br />

<strong>The</strong> issues of supply chain integrity<br />

alone, when considered in the context<br />

of this document, are a compelling<br />

case <strong>for</strong> the implementation of<br />

data standards and Auto ID. Consider<br />

the complexities of the global<br />

supply chain discussed in the previous<br />

sections of this document. Raw<br />

ingredients coming from around the<br />

world have dubious traceability; existing<br />

loopholes in the laws of some<br />

countries preclude the prosecution of<br />

those flagrantly endangering lives by<br />

providing unsafe raw ingredients.<br />

<strong>Global</strong>ity, differential pricing and the<br />

opening of trade borders encourages<br />

parallel trade and, potentially, dysfunctional<br />

arbitrage, which can serve<br />

as a gateway to sophisticated counterfeiting<br />

that is frequently backed by<br />

organized crime. Multiple distributors<br />

handle, frequently repackaging,<br />

products that, if not cared <strong>for</strong> properly<br />

and used correctly, can be dangerous.<br />

Cost pressures strain the<br />

margins of wholesalers creating a<br />

need <strong>for</strong> services like repackaging<br />

and drug-buy-back programs. Drugbuy-back<br />

programs and recall events<br />

create reverse supply chains. <strong>The</strong><br />

easy availability of discounted pricing<br />

gives criminals the appearance of<br />

legitimacy when they offer low prices


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>for</strong> diverted drugs with no clear origin.<br />

Laws and regulations create further<br />

differentials in pricing throughout<br />

the world and inequities in intellectual<br />

property rights protection as well<br />

as disparities in the prosecution of<br />

those violating the safety of citizens.<br />

All of this suggests that a system of<br />

identification and visibility will enhance<br />

the integrity of the healthcare<br />

product supply chain; to the benefit<br />

of the manufacturer and other legitimate<br />

players. In addition, validating<br />

that an action has occurred or that a<br />

particular product is available is one<br />

of the most valuable functions of Auto<br />

ID technologies. <strong>The</strong> ability to validate<br />

an action via bar code or RFID<br />

scan can reduce errors and waste,<br />

provide a management check on<br />

productivity, and can help construct<br />

an electronic pedigree as products<br />

traverse the supply chain. (ECRI<br />

2004; ECRI 2005b)<br />

But there are business challenges<br />

that must be overcome prior to widespread<br />

RFID adoption by distributors,<br />

including the establishment of a<br />

clear adoption path, the creation of<br />

data access and sharing standards,<br />

the need <strong>for</strong> a reliable supply of<br />

tags, and the need <strong>for</strong> improved RF-<br />

ID read reliability rates. Since most<br />

distributors already have a bar code<br />

system, a switch to RFID would involve<br />

the cost of new readers, computers<br />

and software. HDMA estimates<br />

that the initial setup costs <strong>for</strong><br />

EPC/RFID systems integration,<br />

hardware, tags, and data processing<br />

software would range between $9<br />

million and $20 million <strong>for</strong> a large<br />

distributor. (Healthcare Distribution<br />

Management Association 2004)<br />

<strong>The</strong> RFID products offered in the<br />

current market are based on a number<br />

of standards that have changed<br />

frequently, and there is confusion<br />

about their interoperability and ease<br />

of upgrading. Systems that offer upgradable<br />

features and interoperability<br />

would alleviate manufacturers’<br />

investment apprehensions and accelerate<br />

adoption. (Frost and Sullivan<br />

2005)<br />

As many healthcare manufacturers<br />

move production offshore to take advantage<br />

of cheaper labor and global<br />

markets, there is an added incentive<br />

<strong>for</strong> them to be able to operate on a<br />

global identification standard in order<br />

to tighten control company-wide.<br />

(Navas 2006)<br />

Pharmacy, Hospital and Patient<br />

Studies<br />

A global standard and the application<br />

of Auto ID <strong>for</strong> healthcare products<br />

also have the potential to benefit<br />

those at the supply chain’s end.<br />

Most pharmacies already use UPC<br />

codes on over-the-counter drugs to<br />

automate transactions with consumers,<br />

similar to the manner in which<br />

grocery stores use them. Some also<br />

scan bar codes on prescription drugs<br />

<strong>for</strong> inventory control, ordering and<br />

prescription verification.<br />

<strong>The</strong>re are over 6,500 hospitals in the<br />

US alone with over 1.25 million beds;<br />

personnel estimates include almost<br />

100,000 pharmacists, 75,500 pharmacy<br />

assistants and almost 1.2 million<br />

nurses who are responsible <strong>for</strong><br />

4.5 beds per shift. (U.S. Food and<br />

Drug Administration 2003)<br />

A survey published by AdvaMed in<br />

2004 indicates that of<br />

- 41 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

manufacturers, 78% (of 41<br />

respondents representing 37<br />

different manufacturing firms)<br />

currently apply bar codes at some<br />

level of packaging. Additionally the<br />

study found that 83% of FDA Class I<br />

medical devices, 86% of FDA Class<br />

II devices, and 76% of FDA Class III<br />

devices made by the respondents<br />

had some <strong>for</strong>m of bar code.<br />

Adoption of the technology was<br />

related to a firm’s size, with 80% of<br />

firms with more than $30 million in<br />

sales per year indicating that they<br />

use bar codes, and 54% <strong>for</strong><br />

companies with revenues of less<br />

than $30 million. (AdvaMed 2004)<br />

Although the percentage of<br />

manufacturers who applied bar<br />

codes to unit-of-use packaging was<br />

lower than that reported <strong>for</strong> shelf<br />

packs, the AdvaMed survey<br />

indicated that a number of<br />

manufacturing firms are applying bar<br />

codes at the unit-of-use level.<br />

According to the survey results, over<br />

40% of FDA Class I products and<br />

approximately 50% of FDA Class II<br />

products are bar coded at the unit-ofuse<br />

level. (AdvaMed 2004)<br />

For the AdvaMed study, the vast<br />

majority of respondents indicated the<br />

use of either a <strong>GS1</strong> or HIBCC<br />

standard. <strong>The</strong> majority reported the<br />

use of a Code 128 (linear)<br />

symbology.<br />

Available data from New Zealand<br />

suggest similar rates of prevalence;<br />

however, the study did not indicate<br />

the relative use of <strong>GS1</strong> vs HIBCC.<br />

<strong>The</strong> audit, conducted by <strong>GS1</strong> New<br />

Zealand, indicated that, “46 percent<br />

of items destined to be used in local<br />

hospital and community pharmacy<br />

channels were packaged with<br />

- 42 -<br />

machine readable barcodes [sic] at<br />

‘retail’ package level [unit dose].”<br />

(Anderson 2007)<br />

This suggests that there are bar<br />

codes available <strong>for</strong> those in the<br />

healthcare arena to use. Adoption<br />

and implementation of the technology<br />

at the hospital level is another<br />

question.<br />

A study conducted by the American<br />

Hospital Association (AHA) indicates<br />

that bar coding, or some other <strong>for</strong>m<br />

of product identification management,<br />

is being implemented by a majority<br />

of hospitals. <strong>The</strong> survey noted,<br />

“more than half of all hospitals<br />

[surveyed] have adopted barcoding<br />

technologies <strong>for</strong> at<br />

least one purpose… twentysix<br />

percent of those surveyed<br />

had fully implemented or partially<br />

implemented bar-coding<br />

<strong>for</strong> pharmaceutical administration<br />

in 2006.” (American Hospital<br />

Association 2007)<br />

<strong>The</strong> survey went on to note that<br />

adoption and implementation was<br />

largely dependent on the hospital<br />

type, with larger hospitals, teaching<br />

hospitals, those in urban areas<br />

and hospitals with favorable<br />

margins using health in<strong>for</strong>mation<br />

technology (HIT) more frequently.<br />

(American Hospital Association<br />

2007)<br />

Bar codes were used in a variety<br />

of ways. (see Figure 7) Most<br />

hospitals already use bar code<br />

scanners <strong>for</strong> inventory control,<br />

purchasing and stock keeping<br />

activities. Within a hospital, there<br />

are many centers of ordering and<br />

stock. <strong>The</strong> products arrive<br />

through centralized procurement


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Figure 7-Percentage of Responding<br />

Hospitals that indicate either<br />

Full or Partial Implementation of<br />

Bar Codes <strong>for</strong> Varying Purposes-<br />

Source (American Hospital Association<br />

2007)<br />

organizations which may or may<br />

not have physical distribution<br />

centers. <strong>The</strong> total inventory level<br />

in hospitals has been estimated<br />

at $544.02 billion. Automatic<br />

identification can increase the<br />

transparency of a hospital material<br />

handling system and reduce<br />

the costs associated with ordering<br />

and receiving the correct<br />

quantity. It can increase inventory<br />

velocity and reduce inventory<br />

levels.<br />

Two organizations conducted surveys<br />

of hospitals to learn gain insights<br />

regarding the implementation<br />

of auto-ID. <strong>The</strong> results of the surveys<br />

are summarized in Appendix G<br />

and highlights from them are written<br />

here.<br />

<strong>The</strong> <strong>GS1</strong> HUG Auto-ID Data Work<br />

Team conducted a hospital survey of<br />

110 hospitals in 17 countries, using 8<br />

languages. <strong>The</strong> hospitals had<br />

37,000 beds. (see “Auto ID Data:<br />

Hospital Survey” in Appendix G).<br />

<strong>The</strong> hospital responses showed that<br />

18% scanned codes <strong>for</strong> patient safety<br />

uses while 23 % scanned <strong>for</strong> other<br />

uses (presumably business applications).<br />

Sixty percent (60%) reported<br />

that they manually record in<strong>for</strong>mation<br />

from packages <strong>for</strong> patient safety.<br />

<strong>The</strong> respondents agreed on four data<br />

items that are needed on the<br />

package <strong>for</strong> patient safety: product<br />

ID, lot or batch number, and expiry<br />

<strong>for</strong> both drugs and devices. Devices<br />

require a serial number in addition.<br />

<strong>The</strong> second survey was conducted<br />

by EUCOMED (Device Manufacturers).<br />

(see “EUCOMED (<strong>The</strong> voice of<br />

the Medical Technology In Europe)”<br />

in G). <strong>The</strong>irs consisted of 210 responses<br />

from at least 19 countries in<br />

5 languages. <strong>The</strong> survey found that<br />

6 Auto ID standards are in use. Thirty<br />

nine percent (39%) used <strong>GS1</strong><br />

- 43 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

codes, 19% used HIBCC, while 20%<br />

used both, so 59% of the respondents<br />

used <strong>GS1</strong> codes, and 39%<br />

used HIBCC. A total of 78% of the<br />

respondents are using these two automatic<br />

identification standards. <strong>The</strong><br />

respondents reported that they consider<br />

the HIBCC code to be US driven.<br />

<strong>The</strong> respondents report that<br />

they would prefer to standardize on a<br />

single code.<br />

As mentioned, adoption and implementation<br />

of an AIDC system requires<br />

a thoughtful analysis of both<br />

cost and benefit. In the words of the<br />

Department of Health (DOH- UK),<br />

although the “use of AIDC within<br />

healthcare is still restricted to some<br />

specific applications, and the evidence<br />

base is still limited, the evidence<br />

we do have, though, is powerful.”<br />

(Department of Health 2007)<br />

A review of the available studies<br />

consistently suggests favorable returns<br />

<strong>for</strong> implementing AIDC. One<br />

question that providers must consider<br />

as they engage AIDC is RFID,<br />

bar codes or both?<br />

Radio Frequency Identification<br />

Alan Carlson, Providence Health<br />

Center’s Director of Business<br />

technology described how his<br />

hospital’s RFID system has helped<br />

to uncover inefficient processes and<br />

understand its staffing, patient and<br />

room needs, stating, "This has really<br />

been an eye-opener.” (Bacheldor<br />

2007b) Providence Healthcare<br />

Center in Waco, Texas, has put into<br />

operation a real time locating system<br />

(RTLS) that utilizes active tags to<br />

track patients, staff and equipment.<br />

<strong>The</strong> data on the 433 MHz tags from<br />

Radianse use a proprietary airinterface<br />

protocol to communicate<br />

- 44 -<br />

with Radianse receivers, and the<br />

in<strong>for</strong>mation is then relayed to a<br />

Radianse server. In October 2006,<br />

the hospital began running the<br />

system in the 170-bed acute-care<br />

facility, with additional floors going<br />

‘live’ in November. Nearly 500<br />

receivers and 2,000 active tags with<br />

a battery life reported to be 7 years<br />

have been deployed. 850 tags have<br />

been given to the staff to wear, with<br />

some tags going onto equipment<br />

such as beds, wheelchairs and<br />

infusion pumps. In addition, the<br />

hospital is ordering 20,000<br />

disposable tags with a battery life of<br />

about 30 days to give to patients<br />

upon check-in. Patient identification<br />

will be housed in the system<br />

software, and will focus on lab<br />

reporting, order management<br />

systems, patient discharge and room<br />

cleaning. (Bacheldor 2007b)<br />

Patient tracking is being piloted in<br />

Belgium at the University Hospital of<br />

Ghent. <strong>The</strong> 1,000 bed facility is<br />

using 2.45 GHz active tags<br />

combined with exciters in rooms,<br />

hallways, nurse stations and other<br />

hospital areas to trigger the tags<br />

emitter. Patient identity is linked to<br />

the tag’s ID and kept in the<br />

underlying software program. What<br />

makes this real time location system<br />

(RTLS) unique is that it is designed<br />

to respond to a medical event, which<br />

is why it will eventually be expanded<br />

to all cardiology patients. (Bacheldor<br />

2007a)<br />

St. Olav’s Hospital in Trondheim,<br />

Norway, is tracking work garments<br />

<strong>for</strong> its staff. It owns and maintains<br />

more than 130,000 work garments,<br />

encompassing robes, gowns and<br />

scrubs. St. Olav’s has installed an<br />

RFID-based uni<strong>for</strong>m-tracking system


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

offering real-time inventory visibility,<br />

and the hospital claims it led to<br />

savings in inventory space, labor and<br />

operation costs. This system uses<br />

readers from Feig Electronic and<br />

13.56 MHz tags from Texas<br />

Instruments that are sewn into the<br />

garments and comply with ISO<br />

15693 and ISO 18000-3 standards.<br />

<strong>The</strong> system started in 2005 and was<br />

fully deployed in September 2006.<br />

<strong>The</strong> employees access the<br />

respective garment lockers using<br />

their hospital ID card, which operates<br />

at 125 kHz. When they remove the<br />

uni<strong>for</strong>ms and close the locker door, a<br />

Feig reader is activated so that it<br />

reads the remaining contents and<br />

updates the inventory count. A<br />

resupply alert is sent if the count of<br />

garments falls below a preset<br />

number. <strong>The</strong> new system has saved<br />

an estimated 40 million kroner ($6<br />

million) in space savings alone, and<br />

the hospital expects to save several<br />

million kroner through inventory<br />

accuracy and labor reductions.<br />

(O’Connor 2007)<br />

Chang-Gung Memorial Hospital<br />

(CGMH) in Taipei, Taiwan uses<br />

RFID-enabled patient wristbands to<br />

correctly identify surgical patients as<br />

well as track their operations to<br />

ensure they get the correct<br />

procedures and medications, at the<br />

right time. <strong>The</strong> wristbands utilize<br />

13.56 MHz passive inlays that<br />

support ISO 15693, and contain<br />

patient name, medical-record<br />

number, gender, age, doctor’s name,<br />

and additional in<strong>for</strong>mation where<br />

warranted. Again, the tag ID number<br />

is associated with the patient via the<br />

hospital’s back-end in<strong>for</strong>mation<br />

system. <strong>The</strong> use of RFID began in<br />

the surgery department and is<br />

currently expanding into neonatal<br />

- 45 -<br />

care, the emergency room and inpatient<br />

management services. <strong>The</strong><br />

primary goal of this system is “to<br />

improve patient care and safety”,<br />

according to Hewlett-Packard team<br />

members. <strong>The</strong>y worked with tag<br />

manufacturer Precision Dynamics<br />

Corporation and report that the RFID<br />

wristbands have been 100 percent<br />

accurate, while “saving CGMH<br />

medical staff an average of 4.3<br />

minutes per patient in per<strong>for</strong>ming<br />

patient identification and verification<br />

processes.” (Bacheldor 2007c)<br />

<strong>The</strong> Mayo Clinic in Rochester,<br />

Minnesota, is implementing a<br />

passive 13.56 MHz RFID system to<br />

track gastrointestinal tissue samples<br />

in all of its endoscopy surgical suites.<br />

A trial with 3M in 2006 affixed tags<br />

that comply with the ISO 18000-3<br />

standard to the bottom of specimen<br />

bottles. <strong>The</strong> specimens were<br />

tracked from their collection point in<br />

one building to the pathology lab in<br />

another building. <strong>The</strong> interrogation<br />

occurred as they entered a<br />

pneumatic tubing system to timestamp<br />

the process, then again when<br />

they arrived at the sampling<br />

destination. <strong>The</strong>y were again<br />

interrogated when they arrived at the<br />

pathology lab. Mayo reports that the<br />

pilot “demonstrated increased<br />

operational efficiencies”, and as a<br />

result, Mayo’s Rochester hospital is<br />

implementing the system across all<br />

of its endoscopy suites. (Bacheldor<br />

2007d)<br />

Chelsea and Westminster Hospital in<br />

London reported on their experience<br />

with an electronic system with an Auto<br />

ID carrier <strong>for</strong> the in<strong>for</strong>mation. (see<br />

“RFID in Hospital” in Appendix G).<br />

<strong>The</strong> hospital uses a fully electronic<br />

system from admission to prescrip-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

tion writing to prescription checking<br />

to administration to discharge of the<br />

patient. <strong>The</strong> hospital chose RFID as<br />

the data carrier. <strong>The</strong> hospital attributes<br />

the success of the operation to<br />

the fact that they used a standard<br />

code system.<br />

pilot also demonstrated that Aegate's<br />

system is technology agnostic; it<br />

worked with a range of RFID- and<br />

barcode-based mass serialization<br />

approaches.<br />

A three month pilot by Aegate, a PA<br />

Group Company, showed that fraudulent<br />

medicines can be identified at<br />

the point of dispensing by implementing<br />

auto-ID into the supply<br />

chain. Benefits included enhanced<br />

safety and improved service. <strong>The</strong><br />

pilot confirmed that radio-frequency<br />

identification (RFID) tags and printed<br />

barcodes can be fully utilized, and<br />

that pharmacists are supportive of<br />

these technologies.<br />

“Forty-four pharmacies across<br />

England and Wales took part<br />

in the pilot between October<br />

2004 and January 2005.<br />

<strong>The</strong>se included independent<br />

community pharmacies,<br />

pharmacy chains, hospital<br />

pharmacies and doctors' dispensaries.<br />

Six drug manufacturers<br />

took part including<br />

Merck Generics UK, Merck<br />

Pharmaceuticals, Novartis,<br />

Schering Health Care and<br />

Solvay. More than 180,000<br />

pharmaceutical products,<br />

ranging from needles to Nurofen,<br />

were scanned at the point<br />

of dispensing.”(Anonymous)<br />

<strong>The</strong> pilot demonstrated that authentication<br />

at the point of dispensing<br />

(see Figure 5) is a simple scanning<br />

process, can reduce the risk of errors,<br />

and alert dispensers to illegal,<br />

expired or recalled products be<strong>for</strong>e<br />

they are given to the patient. <strong>The</strong><br />

- 46 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Bar Codes<br />

Most care facilities that are planning<br />

to transition from manual to<br />

automated processes still consider<br />

bar codes, not RFID, to be the next<br />

step because bar coding systems<br />

have a lengthy track record and best<br />

practice guidelines have been<br />

established <strong>for</strong> their use. For<br />

example, Georgetown University has<br />

decided, because of the high cost of<br />

RFID, to invest in 2D bar codes to<br />

verify blood transfusions and track<br />

medication administration.<br />

used in digital cameras and<br />

cell phones driving the cost. In<br />

volume. [sic] <strong>The</strong>se scanners<br />

are as low as $250 - $300.<br />

<strong>The</strong>se scanners are used in<br />

retail pharmacies and other<br />

end use applications. Both<br />

types are selling as modules<br />

to be integrated in other<br />

devices <strong>for</strong> well under $100 in<br />

volume. I believe integration<br />

of this type has a lot of value<br />

in healthcare as it enables<br />

hands free operation.“(Brady<br />

2007)<br />

Some within the industry cite the expense<br />

of scanners that are capable<br />

of reading 2D codes as a hindrance<br />

to their adoption. Scanners <strong>for</strong> 2D<br />

bar codes cost four times as much<br />

as linear bar code readers. (Schuerengerg<br />

2006) However, they will<br />

become more af<strong>for</strong>dable, as implementation<br />

becomes more widespread,<br />

pricing becomes more af<strong>for</strong>dable.<br />

Tom Brady, of <strong>GS1</strong>, suggests<br />

that this is already happening,<br />

“Imaging may still be 10% to<br />

20% above laser scanners,<br />

but the gap is closing fast due<br />

to the camera technologies<br />

Questions of market adoption <strong>for</strong> bar<br />

codes generally boil down to<br />

economics. Table 5 depicts a basic<br />

alignment of incentives <strong>for</strong> the use of<br />

bar coding on shipping and<br />

warehouse units, but a major upward<br />

skewing of cost and benefit <strong>for</strong> unitof-use.<br />

(HIMSS 2003)<br />

Table 5: Economics and Market<br />

Adoption of Bar Codes<br />

Table 5- Economics and Market Adoption of Bar Codes<br />

Shipping<br />

Unit-of-Use<br />

Constituent Implementation Expected Implementation<br />

Cost Benefits Cost<br />

Manufacturer $$$ $$$$ $$$$$$<br />

Expected<br />

Benefits<br />

Distributor $$ $$$$ $$<br />

Provider $$ $$$$ $$$$ $$$$$$$<br />

Software<br />

$ $$ $ $$$<br />

vendor<br />

- 47 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Perhaps the most detailed cost analysis<br />

regarding the implementation of<br />

bar codes comes from New Zealand.<br />

(Anderson 2007; Anderson 2007)<br />

<strong>The</strong> study hypothesized the gross<br />

cost of introducing and operating<br />

bedside verification system that employed<br />

bar codes at all District<br />

Health Board (DHB) hospitals. Researchers<br />

estimated that the gross<br />

cost over 12 years would be approximately<br />

$101M, consisting of a<br />

capital expenditure of $44M; implementation<br />

costs of $10M and annual<br />

operating costs from $3.5-$5M. Ultimately,<br />

they calculated the net savings<br />

over twelve years to be $115M,<br />

with the majority of savings being the<br />

result of significant reductions in medication<br />

error. This reduction in error<br />

translated to 1,050 lives saved,<br />

2,800 permanent disabilities averted<br />

and the avoidance of 29,000 short<br />

term disabilities.<br />

Similar trends were reported in a<br />

cost-benefit analysis that was conducted<br />

at Brigham and Women’s<br />

Hospital (US) after a bar code system<br />

was implemented. (Maviglia,<br />

Yoo et al. 2007) Researchers reported<br />

total 5 year costs <strong>for</strong> the hospital<br />

were $2.24 M, and, as with the<br />

New Zealand estimates, the primary<br />

benefit of implementation was found<br />

to be a reduction in ADEs. “After<br />

implementing bar coding, the rate of<br />

potential ADEs from dispensing errors<br />

decreased to 0.07%. With approximately<br />

6 million doses dispensed<br />

annually, this represents approximately<br />

7260 averted potential<br />

ADEs annually.” (Maviglia, Yoo et al.<br />

2007) <strong>The</strong> reduction in ADEs resulted<br />

in an annual net savings of<br />

$2.20 M. <strong>The</strong> net benefit after 5<br />

years was $3.49 M and the break<br />

- 48 -<br />

even point occurred within 1 year of<br />

the system being fully operational.<br />

Favorable results were also found in<br />

England, where <strong>The</strong> Department of<br />

Health has agreed a set of standards<br />

on which all future NHS 10-digit ID<br />

systems will operate. "This document<br />

sets out a clear case <strong>for</strong> the use of<br />

auto identification and capture technology<br />

by industry and the NHS in<br />

order to save lives, reduce mistakes,<br />

and improve efficiency," said Health<br />

Minister Lord Hunt.<br />

<strong>The</strong> department announced a deal<br />

with <strong>GS1</strong>UK to use the <strong>GS1</strong> coding<br />

system <strong>for</strong> bar codes and RFID tags.<br />

It is not mandating the use of tags,<br />

but is recommending them and recommending<br />

the adoption of a common<br />

technical standard.<br />

<strong>The</strong> decision to partner with <strong>GS1</strong>,<br />

and encourage the use of a standardized<br />

system <strong>for</strong> data collection<br />

and sharing was undoubtedly influenced<br />

by benefits that are being reported<br />

throughout the world. For instance,<br />

a recent trial in the UK<br />

showed medical staff made far fewer<br />

mistakes when patients' medical details<br />

were encoded in barcodes <strong>for</strong><br />

wristbands.<br />

David Morgan, consultant & surgeon,<br />

said, "This guards against misidentification<br />

errors, such as patients having<br />

the wrong drugs, the wrong blood<br />

transfusion or indeed the wrong operation<br />

[see Figure 5]. It improves<br />

theatre efficiency by making sure the<br />

actual process is managed more efficiently."<br />

(CCTV.com 2007)<br />

Hospitals in England are also exploring<br />

the benefits of automated systems<br />

that attempt to reduce prepara-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

tion and dispensing errors (see Figure<br />

5). <strong>The</strong> Musgrove Park Hospital<br />

pharmacy in Taunton, England, installed<br />

a robot to fill patients' prescriptions.<br />

<strong>The</strong> robot ‘pharmacist’<br />

used barcodes to identify and sort<br />

medication. <strong>The</strong> robot also tracks<br />

every item in stock, and is able to<br />

check and sort all incoming orders to<br />

keep records up-to-date. Still, it was<br />

reported that the robot has an error<br />

rate of one in 10,000, so the hospital<br />

has two people check the prescriptions<br />

be<strong>for</strong>e they are given to patients.<br />

(Gutierrez 2007)<br />

Three other hospitals, St Alexius in<br />

Bismark, North Dakota, U.S.A. (ERG<br />

2006) International Medical Center,<br />

Japan (Akiyama and Kondo 2007)<br />

and Midden-Brabant in <strong>The</strong> Netherlands<br />

(Lenderink 2007) all report<br />

substantial savings as a result of use<br />

of systems that incorporate automatic<br />

identification. St Alexius<br />

claims inventory cost savings paid<br />

<strong>for</strong> the system, International Medical<br />

Center claims savings of $4,000,000<br />

per year, and Midden-Brabant shows<br />

a payback period of 3.2 years on a<br />

system installed there.<br />

Studies at the Department of<br />

Veterans Affairs (VA) Hospitals (US)<br />

provide more evidence of benefits of<br />

implementing bar codes into the<br />

supply chain. Researchers indicated<br />

a “drastic reduction in medication<br />

errors" was obtained when bar code<br />

systems were implemented in VA<br />

hospitals. This encouraged US FDA<br />

to implement a rule that required the<br />

use of bar codes <strong>for</strong> certain<br />

healthcare products (see Appendix<br />

G). (Meadows 2003)<br />

VA study hospitals employed the<br />

following model:<br />

"When patients enter the hospital,<br />

they get a bar-coded identification<br />

wristband that can<br />

transmit in<strong>for</strong>mation to the hospital's<br />

computer... Nurses have<br />

laptop computers and scanners<br />

on top of medication carts that<br />

they bring to patients' rooms.<br />

Nurses use the scanners to<br />

scan the patient's wristband<br />

and the medications to be given.<br />

<strong>The</strong> bar codes provide<br />

unique, identifying in<strong>for</strong>mation<br />

about drugs given at the patient's<br />

bedside. ' Be<strong>for</strong>e giving<br />

the medications, nurses use<br />

the scanner to pull up a patient's<br />

full name and social security<br />

number on the laptops,<br />

along with the medications... If<br />

there is not a match between<br />

the patient and the medication<br />

or some other problem, a warning<br />

box pops up on the screen."<br />

(Meadows 2003)<br />

One VA medical center in Topeka,<br />

KS (U.S.) reported "bar coding reduced<br />

its medication error rate by 86<br />

percent over a nine-year period."<br />

(Meadows 2003)<br />

Largely as a result of the success<br />

demonstrated in the VA hospitals,<br />

the US FDA initiated a rule requiring<br />

linear bar codes on human drugs<br />

and biologics. (See Appendix G <strong>for</strong><br />

more complete details on the creation<br />

of the bar coding regulation). To<br />

analyze the costs and the benefits of<br />

this regulation, the FDA contracted<br />

with the Eastern Research Group<br />

(ERG); who collected data and interviewed<br />

industry experts to estimate<br />

the costs and benefits of the pro<br />

- 49 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

posed rule (21 CFR 201, 606 and<br />

610). A summary of the findings is<br />

shown in Table 8.<br />

It was also estimated that the rule<br />

will help prevent nearly 500,000<br />

ADEs and transfusion errors over the<br />

next 20 years, saving approximately<br />

$93 billion in healthcare costs.<br />

<strong>The</strong>re are clear indications that incorporation<br />

of a bar code provide<br />

cost and patient safety benefits.<br />

However, one study suggests that to<br />

achieve maximum benefits, it is important<br />

to consider the system configuration<br />

prior to implementation.<br />

<strong>The</strong> study focused on dispensing error<br />

rates (see Figure 5) in a large<br />

hospital pharmacy. Findings were<br />

consistent with those already reported,<br />

indicating that the introduction<br />

of a bar code assisted dispensing<br />

system markedly reduced error<br />

rates. However, one of the possible<br />

system configurations resulted in a<br />

lesser reduction and an increase in<br />

potential adverse events.<br />

- 50 -<br />

Table 6- Estimated Impacts of the<br />

Proposed Rule Over a 20-Year Period<br />

at 7% Discount Rate (FDA<br />

2003)<br />

Researchers evaluated the impact of<br />

installing the bar code technology in<br />

a large US hospital pharmacy. Direct<br />

observation was used to determine<br />

its effect (be<strong>for</strong>e and after installation)<br />

on dispensing errors and<br />

ADEs.<br />

“Three potential system configurations<br />

were studied, depending<br />

on the type of medication<br />

- two in which all doses<br />

were scanned at least once<br />

during the process, and one in<br />

which only one dose was<br />

scanned if several doses of<br />

the same medication were being<br />

dispensed. All dispensed<br />

doses were inspected to look<br />

<strong>for</strong> and record dispensing errors;<br />

detected adverse events<br />

were subsequently classified<br />

<strong>for</strong> severity. Outcomes were<br />

the rates of target (i.e. that the


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

- 51 -<br />

system was designed to address)<br />

potential dispensing errors<br />

and target adverse drug<br />

events. Be<strong>for</strong>e and after system<br />

implementation, the authors<br />

observed 115,164 and<br />

253,984 dispensed doses respectively.<br />

<strong>The</strong> results<br />

showed an overall decrease<br />

in target potential adverse<br />

events and all adverse<br />

events. <strong>The</strong> two configurations<br />

that required each dose<br />

to be scanned at some point<br />

led to over 90% reductions in<br />

the rates of target dispensing<br />

errors (93% and 96%), with<br />

consequent large reductions<br />

in target adverse events (86%<br />

and 97%). <strong>The</strong> system that<br />

did not require scanning of<br />

every dose reduced dispensing<br />

errors by 60%, but markedly<br />

increased the incidence<br />

of target adverse events (from<br />

0.068% to 0.16%), including<br />

several errors that were potentially<br />

life-threatening.<br />

Based on their results, the authors<br />

conclude that bar code<br />

technology substantially reduced<br />

the rate of dispensing<br />

errors and overall rate of potential<br />

adverse drug events.<br />

<strong>The</strong> implementation that did<br />

not scan each dose at least<br />

once during the total dispensing<br />

process was, however,<br />

associated with an increase in<br />

adverse drug events and<br />

should there<strong>for</strong>e be avoided.<br />

<strong>The</strong> increase in potential adverse<br />

events with one of the<br />

configurations is of concern,<br />

and they suggest that it may<br />

indicate the risk of overreliance<br />

on technology. <strong>The</strong><br />

authors note a number of potential<br />

limitations, including<br />

use of surrogate outcomes<br />

and lack of blinding, but suggest<br />

that the technology compares<br />

favourably with other<br />

proposed patient-safety interventions.”<br />

(Poon, Cina et al.<br />

2006)<br />

China is also implementing requirements<br />

<strong>for</strong> bar codes and healthcare<br />

products. (see “Shanghai New Regulation<br />

on Medical Devices” in Appendix<br />

G). <strong>The</strong> regulation is SFDA<br />

(2006) No 751 “Opinions on Further<br />

Strengthening Management on Implantable<br />

Medical Devices in Shanghai”,<br />

Issued November 7, 2006. It<br />

calls <strong>for</strong> unique identification, tracking<br />

and tracing, and lists 8 identification<br />

data items that should be included<br />

with the device. <strong>The</strong> regulation<br />

strongly recommends that bar<br />

code technologies be used. Among<br />

the points made: implants in Shanghai<br />

must have one unique code as a<br />

tracking indicator – GTIN and batch<br />

or lot number (or serial number) are<br />

mandatory, Manufacturers, operators<br />

and medical institutions should create<br />

tracking and tracing systems.<br />

In a review of the impact of the FDA<br />

bar code rule in Point of Care, Mark<br />

Neuenschwander made a number of<br />

telling points. New model hospital<br />

packaging machines can produce<br />

bar coded unit dose solid orals more<br />

efficiently and more accurately than<br />

human selection of unit dose blisters<br />

from bins at manual picking stations.<br />

Virtually every ampoule, vial and syringe<br />

is now bar-coded by manufacturer.<br />

However, he reports, too<br />

many medications are not available<br />

in single item packaging; many bar<br />

codes cannot be read by scanners;<br />

many unit dose packages have no


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

bar codes at all. (Neuenschwander,<br />

2007)<br />

Neuenschwander also reported that<br />

the American Society of Hospital<br />

Pharmacists (ASHP) now has an<br />

electronic system <strong>for</strong> reporting when<br />

drug packages have unreadable bar<br />

codes or no codes at all. Go to<br />

ASHP Drug Product Bar Code Problem<br />

Reporting Center,<br />

www.ashp.org/s_ashp/doc1c.asp?CI<br />

D=4060&DID=7025.<br />

Other researchers have echoed the<br />

concerns regarding bar codes <strong>for</strong><br />

medical products that were expressed<br />

by Neuenschwander. Based<br />

on experience at Midden-Brabent<br />

Hospital in Tilburg, <strong>The</strong> Netherlands,<br />

Bertil Lenderink makes the statement,<br />

“Bedside bar code scanning<br />

prevents errors and even deaths”.<br />

(See “From cow to C.O.W.” in Appendix<br />

G). Lenderink reports that<br />

bar codes are used mostly to support<br />

the distribution process, and not<br />

much <strong>for</strong> patient safety. Less than<br />

50% of medication units are available<br />

in unit dose, and less than 50%<br />

of those have bar codes. At the<br />

same time some CPOE systems<br />

cannot use <strong>GS1</strong> DataBar TM , and<br />

most af<strong>for</strong>dable scanners cannot<br />

read <strong>GS1</strong> DataBar TM or 2D bar<br />

codes. <strong>The</strong> system needs expansion<br />

and standardization of auto ID.<br />

In Germany, the Association of Hospital<br />

Pharmacists (ADKA) and the<br />

European Association of Hospital<br />

Pharmacists (EAHP) have together<br />

requested the production of single<br />

dose units of medications. (see “Machine-readable<br />

marking of the single<br />

dose of per<strong>for</strong>ated tablet-blisters” in<br />

Appendix G). <strong>The</strong>y call <strong>for</strong> the mandatory<br />

inclusion of a bar code on<br />

- 52 -<br />

each single dose of medication, indicating<br />

that machine readable codes<br />

are needed to verify prepared medications<br />

with the electronic prescriptions.<br />

European pharmacists are anticipating<br />

hospital (community) wide<br />

use of electronic systems in the<br />

medical practice. ADKA advocates<br />

<strong>for</strong> bar coding single doses with variable<br />

data to identify every dose,<br />

package and bundle.<br />

St Jan Hospital in Brugge, Belgium<br />

established a bar code workgroup<br />

whose target was to choose a bar<br />

code and standardize hardware.<br />

(see “Optimising the Hospital Pharmaceutical<br />

Distribution and Supplies<br />

Process by Automated Identification<br />

and Data transmission” in Appendix<br />

G). <strong>The</strong> hospital has 909 beds, providing<br />

28,000 treatments a year.<br />

<strong>The</strong> hospital judges bar codes to be<br />

inexpensive while providing rapid<br />

identification, cost reduction and error<br />

reduction. <strong>The</strong> group chose as a<br />

standard code EAN 13 (now <strong>GS1</strong>-<br />

13), <strong>for</strong> reasons given in the report,<br />

with the result that the hospital could<br />

change from manual data entry to<br />

scanning data into the computer.<br />

<strong>The</strong> conclusion was that “Bar code<br />

increases the quality of data transmission<br />

if coding is unique and international<br />

and if the applications are<br />

generalized in the hospital.”<br />

On May 5, 2007 WHO announced a<br />

new core program of the WHO World<br />

Alliance <strong>for</strong> Patient Safety, Patient<br />

Safety Solutions. <strong>The</strong> purpose of the<br />

program is to help reduce the death<br />

toll of healthcare-related harm affecting<br />

millions of patients world-wide. It<br />

lists nine solutions <strong>for</strong> patient safety.<br />

One solution addresses the problem<br />

of look-alike, sound-alike medication<br />

names. Another is patient identifica-


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

tion. Two others address communication<br />

issues when the patient progresses<br />

through stages of the<br />

healthcare system. (Anonymous<br />

2007) Auto ID technologies are not<br />

required to implement the solutions,<br />

but where they are available, existing<br />

auto ID technologies can act as carriers<br />

of the in<strong>for</strong>mation used. All nine<br />

of the solutions can be implemented<br />

in systems utilizing Auto ID, and all<br />

of them enhance patient safety. Auto<br />

ID should be especially effective in<br />

solving the look-alike, sound-alike<br />

medication name problem.<br />

Despite the body of evidence that<br />

suggests the implementation of Auto<br />

ID provides benefits, hospitals hesitate<br />

to invest because setting up<br />

readers, procedures and integrated<br />

systems in so many locations adds<br />

cost. One study estimated that the<br />

initial cost <strong>for</strong> a typical 11 hospital <strong>for</strong><br />

scanners, readers, software and<br />

training would be $377,000. (Food<br />

and Drug Administration 2003) FDA<br />

estimates that its proposed rule <strong>for</strong><br />

NDC codes would cost hospitals<br />

$0.6 million annually, with a total<br />

cost of $6.1 million.<br />

Costs such as these may be prohibitive<br />

to those that currently can’t even<br />

af<strong>for</strong>d the cost of regulating their<br />

healthcare industry. <strong>The</strong>re is concern<br />

that the developing world may<br />

not be financially or technically ready<br />

to take advantage of the new, sophisticated<br />

medical technologies, including<br />

Auto ID.<br />

This issue, among others was addressed<br />

at a WHO international<br />

meeting of technology vendors in<br />

11 Typical hospital based on bed capacity of 191<br />

beds.<br />

Prague, Czech Republic in March,<br />

2007. <strong>The</strong>re, Aegate, Ltd, a division<br />

of the international consultancy, PA<br />

Group, announced a new product.<br />

<strong>The</strong> company deployed a bar codeand-database<br />

system to authenticate<br />

product at the pharmacy counter. It<br />

is now in use in Belgium. In Prague,<br />

Aegate demonstrated the capability<br />

to run the authentication system off a<br />

mobile telephone, which is an attractive<br />

<strong>for</strong>mat to WHO because it <strong>for</strong>esees<br />

limitations in adopting new<br />

technology systems in the developing<br />

world.<br />

As technology and the global market<br />

set a blistering pace, the many<br />

stakeholders of the healthcare supply<br />

chain are independently doing<br />

what they can to maximize efficiencies,<br />

prevent errors and reduce<br />

costs. Much of this work, however,<br />

appears to be happening in local<br />

pockets, potentially sub optimizing<br />

the system. This variation in approach<br />

is also occurring in the area<br />

of standardization.<br />

<strong>Standards</strong> and Technology Advancements<br />

In July 2006, the International<br />

<strong>Standards</strong> Organization (ISO) as<br />

part of its ISO/IEC 18000-6 standard<br />

approved EPCglobal’s Gen 2 Class<br />

1 protocol standard. Based on the<br />

ISO ratification, the US Department<br />

of Defense (DOD) opted to<br />

discontinue the use of Gen 1 tags<br />

and equipment.<br />

While this development does not<br />

directly impact either the<br />

pharmaceutical or medical device<br />

industry, it is noteworthy because<br />

what impacts markets in the US will<br />

likely impact global markets,<br />

regardless of their product line. It<br />

- 53 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

further rein<strong>for</strong>ces the need to<br />

develop and adopt true global<br />

standards.<br />

Today, the technology is functionally<br />

capable, and current IT (in<strong>for</strong>mation<br />

technology) can be used to achieve<br />

pedigrees (though not necessarily e-<br />

pedigrees).<br />

Authentication<br />

mechanisms are available and<br />

proven, as are automated<br />

identification technologies, including<br />

RFID technologies and bar codes<br />

that enable the encoding of vital<br />

in<strong>for</strong>mation, such as the NDC.<br />

Overall, the FDA timelines on<br />

pedigree and RFID are technically<br />

feasible (Engels 2006), though<br />

technology and adoption do not<br />

always go hand in hand.<br />

On a global scale, both bar coding<br />

and RFID are used, though the predominant<br />

technology is still bar<br />

codes. Here, there are a variety of<br />

data standards in existence. According<br />

to the <strong>GS1</strong> Healthcare User<br />

Group Summary of Legal/Regulatory<br />

Requirements (2005), there are several<br />

data structure/data carrier symbologies<br />

in use today. <strong>The</strong> list includes<br />

UPC, UPN/HIBCC, <strong>GS1</strong> DataBar<br />

TM , <strong>GS1</strong> DataMatrix, Code 39, I<br />

2 of 5, linear bar codes, proprietary<br />

bar codes <strong>GS1</strong>-13, <strong>GS1</strong>-14, and<br />

<strong>GS1</strong>-128.<br />

<strong>The</strong> plethora of symbologies is,<br />

potentially, a driver <strong>for</strong> the move to<br />

standardize Auto ID on a global<br />

scale.<br />

For RFID applications, there are<br />

lessons to be gleaned from the bar<br />

code development. Different RF<br />

systems exist (LF, HF, UHF and<br />

Microwave) and each has been<br />

- 54 -<br />

effectively used in the healthcare<br />

industry. Similarly, standards<br />

organizations include (in alphabetical<br />

order) <strong>The</strong> American National<br />

<strong>Standards</strong> Institute (ANSI), the<br />

American Society of Testing and<br />

Materials (now ASTM International),<br />

the European Committee <strong>for</strong><br />

Standardization (CEN), the<br />

European Telecommunication<br />

<strong>Standards</strong> Institute (ETSI), <strong>GS1</strong>, and<br />

the International Organization <strong>for</strong><br />

Standardization (ISO). Related to<br />

these are the industry organizations<br />

that have direct input into RF. <strong>The</strong>y<br />

include the Automotive Industry<br />

Action Group (AIAG), the European<br />

Conference of Postal and<br />

Telecommunications Administrations<br />

(CEPT), the International Air<br />

Transport Association (IATA), the<br />

International Electrotechical<br />

Commission (IEC), the Smart Card<br />

Alliance, the Universal Postal Union<br />

(UPU) and the Voluntary Industry<br />

Commerce <strong>Standards</strong> Association<br />

(VICS). Add to this the<br />

governmental bodies (National<br />

Telecommunications and In<strong>for</strong>mation<br />

Administration) and professional<br />

organizations (AIDC 100, APICS,<br />

IEEE, RFIDba and RFID Tribe), and<br />

the complexity of building a single<br />

international standard <strong>for</strong> healthcare<br />

becomes more difficult. This again<br />

points to the advantage of improving<br />

the process control and allowing the<br />

technology to develop, with all global<br />

partners actively participating.<br />

<strong>The</strong> creation of a standardized<br />

system <strong>for</strong> delivering in<strong>for</strong>mation<br />

about the varied products of<br />

healthcare, is challenging, and must<br />

consider the view points of multiple<br />

stakeholders (see Figure 6) to be<br />

truly effective. Additionally, the<br />

system will need to effectively


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

integrate with Computerized<br />

Physician Order Entry (CPOE)<br />

systems; it will also consider<br />

emerging system <strong>for</strong> tracking<br />

electronic health records (EHR) and<br />

Bedside Point of Care Systems<br />

(BPOC). Without effective<br />

integration into these emerging, data<br />

management systems, the process<br />

will be suboptimal.<br />

Not only must the new standard<br />

consider all of these electronic<br />

structures, which are focused around<br />

patient care, to be truly effective, it<br />

will successfully integrate with supply<br />

chain management systems such as<br />

Enterprise Resource Planning (ERP)<br />

and Warehouse Management<br />

Systems (WMS).<br />

Additionally, the process will have to<br />

consider the many regulatory and<br />

legislative activities that are<br />

occurring throughout the world that<br />

have the potential to impact<br />

harmonization (or lack thereof). For<br />

instance, will the 10-digit patient ID<br />

in the UK be able to effectively<br />

integrate with the Unique Device<br />

Identification (UDI) system that is<br />

being proposed by the US FDA?<br />

Will requirements regarding the<br />

“minimum data set of in<strong>for</strong>mation,”<br />

the data carrier, the data standard<br />

and the symbology vary from country<br />

to country, or even state to state?<br />

Will there be a global system <strong>for</strong><br />

identifying these products, or will<br />

manufacturers assign their own<br />

numbers? If codes are proprietary,<br />

and managed and held centrally,<br />

who will maintain this in<strong>for</strong>mation?<br />

Clearly, many questions must be<br />

answered, and it will be to the benefit<br />

of the new system to gain insights<br />

from stakeholders with varied<br />

- 55 -<br />

perspectives. One logical place to<br />

start is with a standards writing<br />

organization. <strong>The</strong>se organizations<br />

have guidelines <strong>for</strong> the structure and<br />

approach to achieving consensus<br />

based standards.<br />

Standardization<br />

International standards writing<br />

organizations agree that a global<br />

standard must meet certain<br />

requirements which have been<br />

established by the World Trade<br />

Organization (WTO). <strong>Global</strong><br />

standards must be constructed in<br />

such a way as to avoid creating<br />

trade barriers by virtue of their<br />

existence. This is expressed in<br />

WTO’s Technical Barriers to Trade<br />

(TBT) Agreement.<br />

<strong>The</strong> requirements are few:<br />

the<br />

standards must be prepared in an<br />

atmosphere of openness, impartiality<br />

and consensus, and they must be<br />

effective and relevant to the activity<br />

or item <strong>for</strong> which they are written.<br />

(ASTM International)<br />

• Openness means that all<br />

affected parties must have free<br />

access to the process and the<br />

work of the standard writers<br />

must be available <strong>for</strong> view by all<br />

affected and interested parties.<br />

• Impartiality means that all<br />

affected parties must be able to<br />

contribute on an equal basis<br />

with all other affected parties –<br />

there must be no privilege or<br />

favor given to the interests of<br />

any particular supplier, user,<br />

country or region.<br />

• Consensus means that the<br />

procedures of the standards<br />

writing organization must take<br />

into account the views of all<br />

parties and that a real ef<strong>for</strong>t is


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

made to reconcile conflicting<br />

arguments.<br />

• Effectiveness and relevance<br />

mean that the standard must<br />

not distort the global market or<br />

have an adverse effect on fair<br />

competition. <strong>The</strong> standard<br />

must not stifle innovation and<br />

technological development.<br />

<strong>The</strong> standard must not give<br />

preference to the characteristics<br />

or requirements of specific<br />

regions when relevant needs or<br />

interests exist in other regions.<br />

A global standard <strong>for</strong> automatic<br />

identification that meets these<br />

requirements will be a robust<br />

standard that can fulfill the need <strong>for</strong><br />

free communication in a common<br />

language to all healthcare<br />

stakeholders around the world.<br />

Such a standard will facilitate<br />

business communication, not hinder<br />

it.<br />

<strong>The</strong> term harmonization is used<br />

occasionally in conjunction with<br />

global standards. In WTO’s<br />

Technical Barriers to Trade<br />

Agreement, it means<br />

internationalization; when automatic<br />

identification is “harmonized” we can<br />

think of it as being<br />

“internationalized,” or “globalized.”<br />

Interoperability<br />

“Interoperability” is used frequently in<br />

discussions of automatic<br />

identification of drugs and devices.<br />

In its report, “Current and future<br />

standardization issues in the e-<br />

Health domain: Achieving<br />

interoperability.” CEN/TC 251 on<br />

Health In<strong>for</strong>matics says, “A primary<br />

goal of standardization is to make<br />

interoperability and integration<br />

possible.” <strong>The</strong> report defines<br />

integration as a “combination of<br />

diverse application entities into a<br />

relationship which functions as a<br />

whole.” (CEN 2000)<br />

Interoperability is defined in the CEN<br />

report as “a state which exists<br />

between two application entities<br />

when, with regard to a specific task,<br />

one application entity can accept<br />

data from the other and per<strong>for</strong>m that<br />

task in an appropriate and<br />

satisfactory manner without the need<br />

<strong>for</strong> extra operator intervention.” <strong>The</strong><br />

authors of this CEN report point out<br />

that this view matches an IEEE and<br />

ISO definition of interoperability: “the<br />

ability of two or more systems to<br />

exchange data and to mutually use<br />

the in<strong>for</strong>mation that has been<br />

exchanged.”<br />

<strong>Global</strong> standards, harmonization,<br />

interoperability and automatic<br />

identification are bound together to<br />

<strong>for</strong>m a system that enables supply<br />

chain members to share in<strong>for</strong>mation<br />

and consequent data processing,<br />

without human intervention. This<br />

removes from the system a major<br />

error source – human error. This<br />

state of affairs is achieved when the<br />

global automatic identification<br />

system is interconnected by means<br />

of a common language, global<br />

standards <strong>for</strong> automatic<br />

identification.<br />

<strong>The</strong> question to be addressed is<br />

WHAT should be standardized? It<br />

makes no sense to standardize<br />

everything, thereby making Auto ID a<br />

utilitarian device, since technologies<br />

will continue to develop and outdate<br />

whatever is currently being used.<br />

However, it does make sense to<br />

- 56 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

standardize the business process of<br />

data collection and transmission.<br />

<strong>The</strong> value of standards is analogous<br />

to the question of which of several<br />

vehicle types is best <strong>for</strong><br />

transportation to work. Since there<br />

are many vehicles with which to<br />

commute to work, the key factor<br />

becomes not which vehicle to use,<br />

but how to ensure that any vehicle<br />

does the job done <strong>for</strong> which it is<br />

intended. 12 To allow this, standards<br />

would need to be developed that<br />

enable multiple vehicle types to<br />

operate, while allowing a common<br />

process among them. By focusing<br />

on the process, the specific<br />

technology is not a roadblock and<br />

users can drive the vehicle which<br />

best fits their individual commuting<br />

needs. <strong>Standards</strong> need to be created<br />

<strong>for</strong> Auto ID, but the focus should be<br />

on the business process and<br />

intelligence control, not on<br />

technology requirements. In other<br />

words, the need is <strong>for</strong><br />

interoperability.<br />

<strong>The</strong> movement toward global<br />

standardization takes place among<br />

interrelated business interests and<br />

societal organizations. Each of<br />

these organizations provides expert<br />

knowledge in its own area, but the<br />

process is not necessarily a true<br />

consensus one. <strong>The</strong>re is not a<br />

single consensus organization.<br />

Since the membership is limited to<br />

those who have corporate support,<br />

the outcome of decisions could be<br />

construed as self-promoting,<br />

perhaps even predatory. While there<br />

is no written public evidence to<br />

support this idea, by no means<br />

12 <strong>The</strong> job being the delivery of a person to<br />

the workplace.<br />

- 57 -<br />

should this concern be ignored as<br />

the movement toward global<br />

healthcare unity occurs.<br />

Regardless, standardization must<br />

occur <strong>for</strong> the goal to be met. <strong>The</strong><br />

question on what to standardize<br />

becomes critical. <strong>The</strong> most<br />

geopolitical and industry neutral<br />

solution may be to standardize the<br />

business process of data collection,<br />

and recommend a technology while<br />

leaving alternative methods<br />

dependent on local concerns and<br />

availability of options. Further,<br />

recommended technologies give<br />

global users the ability to upgrade to<br />

a feasible solution, even if it is still a<br />

generation or two behind the industry<br />

leaders.<br />

Conclusions<br />

Legitimate actors in the healthcare<br />

supply chain, from the beginning to<br />

end, throughout the entire world, are<br />

calling <strong>for</strong> in<strong>for</strong>mation about products.<br />

<strong>The</strong>y want in<strong>for</strong>mation to be<br />

readily and quickly available in standard<br />

<strong>for</strong>mat that can be accurately<br />

read. <strong>The</strong>y want in<strong>for</strong>mation available<br />

from all departments of the hospital<br />

to all departments of the hospital.<br />

Hospitals in Europe, North America,<br />

South America, Asia, have announced<br />

that they have such systems<br />

installed in isolated locations.<br />

<strong>The</strong>y are calling <strong>for</strong> more.<br />

<strong>The</strong> literature reviewed <strong>for</strong> this report<br />

suggests that standard automatic<br />

identification can be af<strong>for</strong>dable, and<br />

potentially provides a satisfactory<br />

return on investment.<br />

<strong>The</strong> following action items are recommended<br />

to the industry:


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

• Automatic identification should<br />

be expanded into all elements<br />

of healthcare<br />

• Automatic identification should<br />

be standardized<br />

• Automatic identification should<br />

be interoperable with all computer<br />

driven systems<br />

• <strong>The</strong> automatic identification<br />

standards should be achieved<br />

in a manner that is open, transparent<br />

and consensus driven<br />

• <strong>The</strong> standards should be written<br />

so that they do not become<br />

technical barriers to trade, in violation<br />

of the WTO Technical<br />

Barriers to Trade Agreement<br />

Finally, a broader finding: <strong>The</strong>re is a<br />

lack of consistent terminology that<br />

creates challenges on several levels.<br />

• Differences in definitions and<br />

reporting systems make it virtually<br />

impossible to precisely<br />

quantify the magnitude or costs<br />

associated with illicit activities<br />

and medication errors as they<br />

relate to patient safety, but they<br />

are real.<br />

• Differences in definitions create<br />

loopholes in the laws, which allow<br />

offenses to go unpunished<br />

in some countries<br />

• Differences in definitions make<br />

meaningful conversations regarding<br />

proposed strategies<br />

and solutions difficult<br />

• Differences in definitions makes<br />

measuring the impact of solutions<br />

implemented to improve<br />

patient safety challenging<br />

Recognizing the importance of the<br />

lack of a consistent global language<br />

around the issues associated with<br />

patient safety, the World Health<br />

Organization, various researchers,<br />

the Eastern Research Group and the<br />

Institute of Medicine, have all issued<br />

calls <strong>for</strong> standardized language.<br />

This is the logical first step in<br />

standards writing. Standardization of<br />

definitions will result in:<br />

• <strong>The</strong> generation of goodwill (all<br />

countries, regardless of<br />

economic status) can<br />

participate,<br />

• <strong>The</strong> elimination of existing<br />

loopholes in regulation and<br />

legislation<br />

• <strong>The</strong> enhanced protection of<br />

intellectual property and brand<br />

identity on a global level<br />

• <strong>The</strong> creation of a foundation<br />

upon which data standards can<br />

be built<br />

<strong>The</strong> use of automatic identification<br />

systems offers great benefits, both<br />

human and financial, to the global<br />

supply network. However, such a<br />

system is doomed to failure if the<br />

complex, multi-echelon supply chain<br />

is not operating globally with<br />

efficiency and interoperability. Since<br />

the global supply chain is not able to<br />

offer “equivalence” in the way of<br />

in<strong>for</strong>mation flow, the chain cannot<br />

operate efficiently throughout the<br />

world. It is unrealistic to insist that<br />

developing countries that have<br />

minimal regulation and hospitals with<br />

- 58 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

multiple patients in a single bed<br />

purchase electronic readers -- bar<br />

code, RFID, or any other type.<br />

Recognizing that it is necessary to<br />

crawl be<strong>for</strong>e walking, and walk<br />

be<strong>for</strong>e running, the primary focus <strong>for</strong><br />

product identification should be a<br />

global standard in which all countries<br />

can participate, regardless of<br />

technology or income. We can<br />

then strive <strong>for</strong> interoperability<br />

through all segments of a global<br />

system, with those too poor to<br />

participate being included as they<br />

are able.<br />

This report does not advocate <strong>for</strong> a<br />

specific technology to which the<br />

standard should apply, since supply<br />

chain partners should be free to<br />

adopt the technology that best suits<br />

their processes. Whether<br />

identification codes are conveyed by<br />

human readable characters, bar<br />

codes or radio frequency will be<br />

based on available technology and<br />

economic justification, but<br />

interoperability can be ensured by<br />

adopting data standards and<br />

definitions that can be used<br />

throughout the world.<br />

This study of the healthcare supply<br />

chain and the in<strong>for</strong>mation systems<br />

which support it has led the researchers<br />

to a conclusion that is not<br />

often, if ever, articulated. Healthcare<br />

and the in<strong>for</strong>mation technologies that<br />

serve it must become a closely connected<br />

network that provides global<br />

flow of accurate, uni<strong>for</strong>m in<strong>for</strong>mation<br />

about every element of the healthcare<br />

system. And the in<strong>for</strong>mation<br />

must be readily available to every<br />

operating element of the system.<br />

Human healthcare is a vast, global<br />

enterprise; it is a scientific enterprise,<br />

it is a commercial enterprise, it is a<br />

social enterprise. Healthcare is<br />

practiced in every nation, on every<br />

continent. Healthcare is practiced in<br />

developed, industrialized economies<br />

and in undeveloped agricultural<br />

economies. <strong>The</strong>se differences alone<br />

cause a wide diversity of healthcare<br />

practices. Yet, every nation and<br />

economy strives to deliver the best<br />

medical care it can.<br />

As a commercial enterprise, healthcare<br />

delivery is accomplished<br />

through a variety of supply chains,<br />

sometimes short and simple, sometimes<br />

long, complex and multilayered.<br />

This commercial enterprise<br />

is focused on logistics, inventories,<br />

delivery schedules and making a fair<br />

monetary return on the money invested<br />

in product and facilities. This<br />

focus is the same whether the product<br />

is drug, medical device, diagnostic,<br />

biological or blood product.<br />

As a scientific and social enterprise,<br />

healthcare is constrained to encompass<br />

all that is implied in these two<br />

categories. Effective therapy, rapid<br />

recovery, and patient safety are all<br />

wrapped into the scientific and social<br />

fabric of the enterprise.<br />

Medical devices, pharmaceuticals,<br />

diagnostics, biologics and blood<br />

products are often treated as independent,<br />

unrelated entities in the<br />

healthcare matrix. <strong>The</strong>y are frequently<br />

manufactured by entirely different<br />

organizations and regulated<br />

by different governing bodies. But<br />

healthcare providers use all of them<br />

on the patients they treat. For the<br />

patients and their caregivers, the<br />

- 59 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

healthcare system is a single system.<br />

All within this legitimate system, from<br />

the manufacturer to patient, need<br />

in<strong>for</strong>mation regarding the identity<br />

and the condition of healthcare<br />

products. Some of the players make<br />

them, some ship them, some buy<br />

them, some prescribe them, some<br />

dispense them, some administer<br />

them. At the end of this chain is the<br />

patient who receives the treatment –<br />

and <strong>for</strong> the patient, patient safety is<br />

paramount.<br />

- 60 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Appendix A – Issues of Intellectual Property and Pricing<br />

in Russia<br />

Other concerns exist regarding the protection of intellectual property rights.<br />

“Despite concerted ef<strong>for</strong>ts to put into place a strong legislative framework<br />

<strong>for</strong> intellectual property rights protection, several deficiencies remain in<br />

Russia’s legal regime…Upon completion of its WTO [World Trade<br />

Organization] accession, Russia would be required by Article 39.3 of the<br />

Agreement on Trade-Related Aspects of Intellectual Property Rights<br />

(TRIPS Agreement) to protect against unfair commercial use of undisclosed<br />

data submitted to government authorities to obtain marketing approval of<br />

pharmaceutical and agricultural chemical products. Russia does not<br />

currently provide such protection. <strong>The</strong> United States is working with the<br />

Russian government in the WTO accession negotiations to amend its Law<br />

on Medicines so that Russia complies with the TRIPS agreement.”<br />

(Anonymous 2005)<br />

This creates a climate where drugs can be reproduced very accurately by entities<br />

other than the intellectual property owner. Russian counterfeits are known <strong>for</strong><br />

their quality; John <strong>The</strong>riault, Vice President <strong>for</strong> <strong>Global</strong> Security at Pfizer and a<br />

<strong>for</strong>mer Federal Bureau of Investigation (US FBI) Agent, has been quoted as<br />

saying, “<strong>The</strong> stuff we saw in the Russian market wasn’t made in a garage. <strong>The</strong><br />

counterfeits we got in the survey [from Russia] were the finest counterfeits I’ve<br />

seen.” (Kramer 2006)<br />

<strong>The</strong> accuracy of Russian counterfeits contributes to a lack of public outrage. For<br />

example, 3,000 doses of fake Cavinton that were administered at a large<br />

research hospital in Siberia during 2006 were similar to the legitimate medication<br />

and did not harm patients. (Kramer 2006) “Inside Russia, the high quality of the<br />

counterfeit drugs has blunted any sense of outrage or urgency by authorities to<br />

make arrests according to two industry groups in Moscow [<strong>The</strong> Association of<br />

International Pharmaceutical Manufacturers and the International Federation of<br />

Pharmaceutical Manufacturers and Associations].” (Kramer 2006)<br />

<strong>The</strong>re is some indication that this will soon change. According to in<strong>for</strong>mation<br />

released from the US Office of the Trade Representative, “Russia will work to<br />

enact legislation by June 1, 2007, to protect undisclosed in<strong>for</strong>mation (such as<br />

test data) submitted to obtain marketing approval of pharmaceuticals.”<br />

(Anonymous 2006)<br />

Another group that is working to protect the rights of intellectual property holders<br />

is the UNECE 13 Advisory Group on Market Surveillance (MARS). <strong>The</strong> MARS<br />

group has drafted a proposal that they are urging governments to adopt. <strong>The</strong><br />

13 United Nations Economic Commission <strong>for</strong> Europe<br />

- 61 -


proposal suggests that those involved with ensuring product safety should be<br />

active participants in the fight against counterfeit and pirated goods. Specifically,<br />

after the product has been found to meet all existing legal requirements,<br />

“market surveillance officers should verify that the product is genuine; i.e.<br />

that it has been produced legally and that the use of a trademark or logo<br />

has been authorized by its legal owners. If results proved otherwise, the<br />

approval process would be suspended and the officers would promptly<br />

in<strong>for</strong>m the intellectual property rights (IPR) holders concerned that<br />

counterfeit goods had been detected.” (UNECE Working Party on<br />

Regulatory Cooperation and Standardization Policies (Working Party 6)<br />

2007)<br />

<strong>The</strong> proposal will be submitted <strong>for</strong> final consideration and approval as a new<br />

UNECE Recommendation by Working Party 6 at its annual session in Geneva on<br />

November 5-7, 2007.<br />

An additional legal issue that influences grey market trade is the pricing structure<br />

of Russian pharmaceuticals. <strong>The</strong> Russian government regulates the pricing of<br />

medicines by determining a base price at which they will purchase medicines<br />

from manufacturers. Pricing is further adjusted by the administrative entity<br />

(regions, republics, etc.). Each administrative entity has<br />

“its own specific legislative acts that determine the extent of extra charges<br />

added to the base price. For instance, in the Smolensk region extra<br />

charges account <strong>for</strong> 20% over the base price wholesale and 30%-40% <strong>for</strong><br />

retail, whereas in the neighboring Tula region, extra charges correlate with<br />

the base price; the bigger the base price, the smaller the extra charge.”<br />

(Stratchounski and Rozenson 1999)<br />

This sets up an environment of differential pricing across borders in a region<br />

where people have difficulty af<strong>for</strong>ding medications.<br />

Another factor that has undoubtedly influenced the pharmaceutical sector in<br />

Russia was the introduction of a 10% Value-Added Tax (VAT) on medicine in<br />

January of 2002. “Russia’s pharmaceutical market is estimated at US $3 billion<br />

per year, and the levying of VAT on pharmaceuticals was seen as an important<br />

source of revenues.” (Maksimova 2002) However, many from the pharmaceutical<br />

sector suspected that the higher cost of goods, as the result of the VAT would<br />

also carry negative ramifications. One third of pharmaceutical executives that<br />

participated in a AIPM/CIPR 14 survey indicated that they believed that<br />

counterfeiting had increased as a result of the tax, and concerns were expressed<br />

that the VAT created a situation where some consumers increasingly opted <strong>for</strong><br />

“cheaper and lower quality medicines as prices continue to rise.” (AIPM and<br />

CIPR 2002)<br />

14 Association of International Pharmaceutical Manufacturers and the Coalition <strong>for</strong> Intellectual Property<br />

Rights<br />

- 62 -


Russia is not the only country to levy a VAT on pharmaceuticals; many Western<br />

countries levy 15-17 percent (Maksimova 2002) However, the difference in the<br />

Western countries is that medical insurers frequently cover the cost of prescribed<br />

drugs.<br />

“Russia does not have a developed system of government reimbursement<br />

<strong>for</strong> drugs, and the majority of patients pay the full price <strong>for</strong> prescribed<br />

drugs… [as such,] many pharmaceutical industry analysts believe that the<br />

VAT would lead not only to a price rise, but also to an increase of<br />

counterfeit medicines and illegal imports.” (Maksimova 2002)<br />

As a result of the concerns, on June 3, 2002 the State Duma (parliament)<br />

Committee on Health and Sport held a hearing on the “Difficult Situation in the<br />

Russian Pharmaceutical Market Caused by the Imposition of a 10% VAT on<br />

Medicines and Pharmaceutical Products.” (AIPM and CIPR 2002). <strong>The</strong><br />

committee recommended that the VAT on medicines, medical equipment and<br />

devices be repealed. In<strong>for</strong>mation about the current state of the repeal was not<br />

found at the time of writing.<br />

- 63 -


Appendix B- Incidents of Counterfeit or Substandard<br />

Medication from around the Globe<br />

Appendix A - Incidents of Counterfeit or Substandard Medication from<br />

around the Globe<br />

Year Source Product Country of<br />

Incidence<br />

1984 (Farley 1990) Ovulen-21 United<br />

States<br />

1985 (Conlon 2001) Ceclor United<br />

States<br />

1990 (Erhun 2001) Paracetamol,<br />

an influenza<br />

therapy<br />

1992 (Bogdanich<br />

and Hooker<br />

2007)<br />

“Fever<br />

medication”<br />

- 64 -<br />

Nigeria<br />

Bangladesh<br />

Impact/Finding<br />

Seizure of 1.5<br />

million bogus<br />

(subpotent)<br />

tablets and 7<br />

convictions under<br />

the FFDCA. This<br />

is one of two high<br />

profile cases that<br />

triggers the<br />

Prescription Drug<br />

Marketing Act of<br />

1987<br />

FDA seizes 1,800<br />

bottles of<br />

counterfeit Ceclor<br />

during a US<br />

Customs<br />

Inspection<br />

109 children die<br />

after ingesting<br />

counterfeit<br />

paracetamol<br />

made with<br />

ethylene glycol<br />

instead of<br />

propylene glycol<br />

solvent<br />

Investigators find<br />

poison in several<br />

brands of fever<br />

medication after<br />

several children<br />

die. Dr. Bennish,<br />

the “whistle<br />

blower” on this<br />

incident has been<br />

quoted as<br />

indicating that<br />

given the amount


1994 (<strong>The</strong><br />

Partnership <strong>for</strong><br />

Safe Medicines<br />

2005)<br />

1995 WHO-Media<br />

Centre, 2006<br />

1995 WHO-<br />

Counterfeit<br />

Medications<br />

1996 (O'Mathuna<br />

and McAuley<br />

2005)<br />

1998 (Wertheimer,<br />

Santella et al.<br />

2004)<br />

1998 WHO<br />

Counterfeit<br />

Medications<br />

1999 (World Health<br />

Organization<br />

2006)<br />

2000 (Newton, Proux<br />

et al. 2001)<br />

Zantac<br />

Vaccines,<br />

received as a<br />

gift from<br />

Nigeria<br />

Counterfeit<br />

birth control<br />

Paracetamol<br />

cough syrup<br />

prepared with<br />

diethylene<br />

glycol<br />

Antimalarial<br />

prepared with<br />

sulphadoxinepyrimethamine<br />

(less effective<br />

antimalarial) is<br />

sold as<br />

Artusenat<br />

Artesunate<br />

samples<br />

- 65 -<br />

United<br />

Kingdom<br />

Niger<br />

Haiti<br />

United<br />

States<br />

Brazil<br />

India<br />

of medication<br />

distributed deaths<br />

must be in the<br />

thousands or tens<br />

of thousands<br />

50,000 people<br />

inoculated with<br />

fake vaccines-<br />

2,500 deaths<br />

89 children die<br />

from the ingestion<br />

of diethylene<br />

glycol<br />

Drugs from an<br />

unapproved<br />

source in China<br />

cause at least 66<br />

deaths and<br />

hundreds of<br />

severe reactions<br />

200 unwanted<br />

pregnancies<br />

30 infants die<br />

Cambodia At least 30<br />

people die<br />

Cambodia,<br />

Laos,<br />

Myanmar,<br />

Thailand<br />

and<br />

Vietnam<br />

38% of samples<br />

purchased have<br />

no active<br />

ingredient<br />

2000 (Conlon 2001) Serostim United Pharmacies in


2000 (Aldhous 2005) Samples of<br />

differing drug<br />

types on the<br />

Cambodian<br />

market<br />

- 66 -<br />

States<br />

Cambodia<br />

seven states find<br />

counterfeit<br />

Serostim, an<br />

AIDS medication<br />

Official surveys<br />

conducted by the<br />

Cambodian<br />

Health Ministry<br />

with the backing<br />

of the WHO finds<br />

that 3.5% of<br />

samples tested<br />

(including pain<br />

killers and<br />

antibiotics) had<br />

less than 60% of<br />

the labeled<br />

quantity of active<br />

ingredients.<br />

2001 (Pitts 2005) China “It was reported<br />

that Chinese<br />

Authorities closed<br />

1,300 factories<br />

while<br />

investigating<br />

480,000 cases of<br />

counterfeit drugs<br />

worth $57 million<br />

2001 (Conlon 2001) Epogen United<br />

States<br />

2001 (Conlon 2001) Neupogen United<br />

States<br />

2001 (Conlon 2001) Nutropin United<br />

States<br />

2001 (Conlon 2001) IV<br />

Chemotherapy<br />

United<br />

States<br />

Contents<br />

replaced with<br />

non toxic, non<br />

sterile solution<br />

Contents<br />

replaced with non<br />

toxic non sterile<br />

solution<br />

Pharmacies in<br />

Cali<strong>for</strong>nia, Indiana<br />

and Florida<br />

uncover bogus<br />

lots of the drug<br />

Pharmacist found<br />

to dilute at least<br />

150 IV<br />

Chemotherapy<br />

bags to boost<br />

profits


2002 (Akunyili 2006) Infusions<br />

manufactured<br />

by a Nigerian<br />

company<br />

2002 Dempsey, 2004<br />

in a Statement<br />

to the DHHS<br />

2002 (Dempsey<br />

2004)<br />

2002 (O'Mathuna<br />

and McAuley<br />

2005)<br />

PROCRIT<br />

PROCRIT<br />

Viagra<br />

2002 (Mudur 2003) Various<br />

samples<br />

2003 (O'Mathuna<br />

and McAuley<br />

2005)<br />

Lipitor<br />

- 67 -<br />

Nigeria<br />

United<br />

States<br />

United<br />

States<br />

United<br />

States<br />

India<br />

United<br />

States<br />

3 people react<br />

adversely to<br />

contaminated<br />

infusions<br />

NAFDAC- the<br />

Nigerian FDAfinds<br />

three<br />

batches to be<br />

heavily<br />

contaminated<br />

Uplabeling of<br />

PROCRIT of<br />

2,000 units to<br />

40,000 units<br />

(Patients receive<br />

medications 20<br />

times less potent<br />

that intended)<br />

A counterfeiting<br />

operation was<br />

uncovered that<br />

produced<br />

counterfeit vials<br />

that were filled<br />

with contaminated<br />

water<br />

Ohio police seize<br />

36,000 bogus<br />

Viagra tablets<br />

traced to China<br />

Testing by state<br />

government<br />

inspectors reveals<br />

9 % of samples to<br />

be poor quality<br />

and 0.3%<br />

counterfeit<br />

Nearly 200,000<br />

bottles of<br />

counterfeit Lipitor<br />

were found in US<br />

markets<br />

2003 (Eban 2005) Florida Grand jury<br />

investigation finds<br />

that 800<br />

pharmaceutical<br />

wholesalers are


February,<br />

2003<br />

(Dondrop,<br />

Newton et al.<br />

2004)<br />

Artesunate<br />

samples<br />

2003 (Aldhous 2005) Repeat study<br />

of the 2000<br />

study with<br />

wider variety of<br />

drugs<br />

2003 BBC- Bad<br />

Medicine<br />

2003 (Dempsey<br />

2004)<br />

Counterfeit<br />

Adrenaline<br />

Ortho Evra<br />

- 68 -<br />

Cambodia,<br />

Laos,<br />

Myanmar,<br />

Thailand<br />

and<br />

Vietnam<br />

Camboia<br />

Nigeria<br />

United<br />

States<br />

operating in the<br />

state, many with<br />

no experience or<br />

credentials.<br />

Licensing<br />

involved a <strong>for</strong>m<br />

and fee system<br />

and there was no<br />

due diligence as<br />

long as no<br />

criminal record<br />

within the county<br />

was noted.<br />

Follow up study<br />

(to the 2000<br />

study) finds 53%<br />

of samples to be<br />

useless<br />

Repeat survey<br />

(of the 2000<br />

study) with a<br />

wider range of<br />

drug types<br />

reveals that 11%<br />

of samples have<br />

less than 60% of<br />

the labeled<br />

quantity of active<br />

ingredients<br />

3 children die<br />

during open heart<br />

surgery-<br />

Counterfeit<br />

Adrenaline<br />

purchased<br />

through<br />

questionable<br />

sources is<br />

implicated by<br />

NAFDAC, but the<br />

hospital maintains<br />

a protective<br />

stance<br />

Adhesive<br />

bandage patch is<br />

marketed as<br />

Ortho Evra birth


control patch and<br />

sold through<br />

internet<br />

pharmacies<br />

2003 (Akunyili 2006) Suxametonium Nigeria Further<br />

contributing to the<br />

3 deaths<br />

associated with<br />

the previously<br />

mentioned<br />

Adrenaline is the<br />

low potency of the<br />

Suxametonium<br />

and several<br />

batches of<br />

infusions were<br />

found to be<br />

contaminated with<br />

microorganisms.<br />

147 out of 149<br />

brands of water<br />

<strong>for</strong> injection are<br />

found to be<br />

unsterile<br />

2003 Lipitor United<br />

States<br />

2003 FDA Public<br />

Health Web<br />

Notification<br />

Dempsey, 2004<br />

in testimony<br />

be<strong>for</strong>e DHHS<br />

Prolene Mesh<br />

- 69 -<br />

United<br />

States<br />

2003 FDA, 2005 Lipitor United<br />

States<br />

Just prior<br />

to 2004<br />

(Wertheimer,<br />

Santella et al.<br />

2004)<br />

Columbia<br />

Batches of Lipitor<br />

recalled that are<br />

found to be<br />

counterfeit<br />

Mesh used to<br />

repair hernias and<br />

other fascial<br />

deficiencies is<br />

found to be<br />

counterfeit and<br />

potentially nonsterile.<br />

Approximately<br />

100 hospitals in<br />

30 states identify<br />

the counterfeit<br />

mesh in their<br />

inventory<br />

A Belize citizen is<br />

sentenced to 10<br />

months in jail<br />

Instituto Nacional<br />

de Vigilancia de<br />

Medicamentos y


2004 FDA, 2005 Alabama,<br />

US<br />

September,<br />

2004<br />

September,<br />

2004<br />

(O'Mathuna<br />

and McAuley<br />

2005)<br />

(O’Mathuna<br />

and McAuley,<br />

2005)<br />

2004 (O’Mathuna<br />

and McAuley,<br />

2005)<br />

2004 (World Health<br />

Organization<br />

2006);<br />

2004 (World Health<br />

Organization<br />

2006)<br />

2004 (World Health<br />

Organization<br />

2006)<br />

Reductil<br />

Cialis<br />

Viagra<br />

- 70 -<br />

United<br />

Kingdom<br />

United<br />

Kingdom<br />

United<br />

Kingdom<br />

Peru<br />

Mexico<br />

Alimentos<br />

(INVIMA)<br />

confiscates 6<br />

million doses of<br />

counterfeit<br />

Voltren<br />

Drug wholesaler<br />

is convicted of<br />

selling counterfeit<br />

drugs.<br />

Sentenced to 5<br />

years probation<br />

and fined<br />

$24,000.<br />

Batches of<br />

Reductil recalled<br />

as being<br />

counterfeit<br />

Batches of Cialis<br />

recalled as being<br />

counterfeit<br />

British authorities<br />

shut down a<br />

factory in London<br />

that produced ½<br />

million Valium,<br />

Viagra and<br />

Steroid tablets<br />

per day<br />

Ministry of Health<br />

seizes ten tons of<br />

adulterated<br />

pharmaceuticals<br />

Federal Agents<br />

seize 60 tons of<br />

stolen, expired<br />

and counterfeit<br />

pharmaceutical<br />

products in<br />

Sahuayo,<br />

Michoacán, and<br />

in Guadalajara,<br />

Jalisco<br />

Iron Injections Argentina 2 women died<br />

after receiving<br />

toxic counterfeit<br />

iron injections, a


Prior to<br />

2005<br />

Early 2005-<br />

2006<br />

Partnership <strong>for</strong><br />

Safe<br />

Medicines,<br />

2005<br />

(Pitts 2006)<br />

2005 (Food and Drug<br />

Administration<br />

2005)<br />

2005 (Food and Drug<br />

Administration<br />

2005)<br />

Human growth<br />

hormones,<br />

anabolic<br />

steroids and<br />

cancer<br />

therapies<br />

Spain<br />

Leizhou,<br />

China<br />

Cali<strong>for</strong>nia,<br />

United<br />

States<br />

Cali<strong>for</strong>nia<br />

and Florida,<br />

United<br />

States<br />

third, pregnant<br />

woman survived<br />

but gave birth to a<br />

premature baby<br />

during her 26 th<br />

week of<br />

pregnancy<br />

Spanish police<br />

raid six<br />

laboratories in the<br />

northeastern<br />

region of<br />

Catalonia capable<br />

of producing<br />

20,000 doses an<br />

hour<br />

Since early 2005<br />

officials have<br />

seized 308 types<br />

of fake and<br />

substandard<br />

medications and<br />

medical devices<br />

San Diego man is<br />

sentenced to 51<br />

months in prison<br />

<strong>for</strong> his role in an<br />

internet<br />

counterfeiting<br />

ring. Ring<br />

involved<br />

ingredients made<br />

in China and India<br />

and product<br />

produced in<br />

Mexico and<br />

shipped and sold<br />

in US<br />

Counterfeit drugs<br />

made in India and<br />

Pakistan entered<br />

the U.S. via the<br />

Bahamas. At<br />

least 14 other<br />

individuals were<br />

prosecuted in<br />

Cali<strong>for</strong>nia or<br />

Florida as part of<br />

- 71 -


2005 (Food and Drug<br />

Administration,<br />

2005)<br />

2005 (World Health<br />

Organization<br />

2006)<br />

Viagra<br />

- 72 -<br />

United<br />

States<br />

Peru<br />

this international<br />

conspiracy.<br />

A person guilty of<br />

conspiring with a<br />

manufacturer in<br />

Beijing to import<br />

thousands of<br />

counterfeit Viagra<br />

tablets into the<br />

United States,<br />

was sentenced to<br />

18 months in<br />

prison.<br />

<strong>The</strong> General<br />

Directorate of<br />

Medicines,<br />

Supplies and<br />

Drugs (DIGEMID)<br />

of the Department<br />

of Health<br />

(MINSA) seizes<br />

approximately<br />

460,00<br />

adulterated and<br />

expired<br />

medications<br />

2005 (Pitts 2005) China From January-<br />

November 2005<br />

the SFDA banned<br />

114,000<br />

unlicensed drug<br />

manufacturers<br />

and destroyed<br />

461 illegal<br />

pharmaceutical<br />

factories<br />

2005 (Pitts, 2005) China “It is estimated<br />

that in China<br />

between 200,000<br />

to 300,000<br />

people die each<br />

year due to<br />

counterfeit or<br />

substandard<br />

medication.”<br />

2005 (O’Mathuna<br />

and McAuley,<br />

2005)<br />

Lipitor UK Medicines and<br />

Healthcare<br />

Products


2005 (Pitts 2006) Glucobay- a<br />

diabetes<br />

treatment<br />

2006 (World Health<br />

Organization<br />

2006)<br />

Tamiflu<br />

2006 (MHRA 2006) Durex<br />

Condoms<br />

- 73 -<br />

China<br />

<strong>The</strong><br />

Netherlands<br />

United<br />

Kingdom<br />

2006 (Pitts 2006) Tamiflu United<br />

States<br />

Regulatory<br />

Authority (MHRA)<br />

and Pfizer,<br />

Limited issue a<br />

recall <strong>for</strong> a batch<br />

of Lipitor that was<br />

known to be<br />

counterfeit<br />

Inspection of the<br />

fraudulent<br />

manufacturer<br />

revealed four<br />

counterfeit boxes<br />

(of ineffective<br />

product), and<br />

records indicating<br />

that 10,826 boxes<br />

worth 680,000<br />

yuan had already<br />

been sold<br />

Dutch Health<br />

Inspectorate<br />

warns consumers<br />

not to buy Tamiflu<br />

through the<br />

internet after<br />

counterfeit<br />

capsules<br />

containing no<br />

active ingredient<br />

are found<br />

MHRA issues a<br />

public safety alert<br />

indicating that<br />

counterfeit<br />

condoms have<br />

been found on the<br />

market<br />

US Customs<br />

Agents intercept<br />

more than 50<br />

shipments of<br />

counterfeit<br />

Tamiflu. Product<br />

has no active<br />

ingredients and<br />

labeling is in<br />

Chinese


April 29,<br />

2006<br />

(Pitts, 2006)<br />

2006 (Bogdanich<br />

and Hooker<br />

2007)<br />

<strong>The</strong>rapy<br />

purported to<br />

lower blood<br />

sugar<br />

Diethylene<br />

Glycol used as<br />

an ingredient<br />

<strong>for</strong> cold<br />

medication<br />

2006 (Pitts, 2006) Cold<br />

medications,<br />

gastrointestinal<br />

medications,<br />

anti-obesity<br />

medications,<br />

erectile<br />

dysfunction<br />

drugs and<br />

sedatives,<br />

along with<br />

210,000<br />

“unknown” pills<br />

April, 2006<br />

(Bogdanich<br />

and Hooker,<br />

2007)<br />

Amillarisin A.<br />

(a gall bladder<br />

treatment)<br />

- 74 -<br />

China<br />

Panama<br />

Taiwan<br />

China<br />

Chinese<br />

Department of<br />

Health announces<br />

at least 3 cases of<br />

blood poisoning<br />

were the result of<br />

medicines that<br />

were marketed to<br />

lower blood sugar<br />

Panamanian<br />

officials<br />

unwittingly mixed<br />

diethylene glycol<br />

into 260,000<br />

bottles of cold<br />

medicine.<br />

Families have<br />

reported 365<br />

deaths from the<br />

poison, 100 of<br />

which have been<br />

confirmed so<br />

far. <strong>The</strong><br />

ingredient was<br />

provided by China<br />

and sold as<br />

glycerin.<br />

Criminal<br />

Investigations<br />

Bureau (CBI)<br />

announces that<br />

$9 million in<br />

counterfeit drugs<br />

are seized in<br />

Tapei<br />

Guangzhou, a<br />

hospital in<br />

Guangdong<br />

Province<br />

administers the<br />

medication, which<br />

was made with<br />

diethylene glycol,


2006 (World Health<br />

Organization<br />

2006)<br />

2006 FDA Web<br />

Notification<br />

March,<br />

2007<br />

BBC- Bad<br />

Medicine<br />

2007 (Food and Drug<br />

Administration<br />

2007)<br />

Tamiflu<br />

One Touch<br />

Blood Glucose<br />

Strips<br />

Xenical<br />

2007 (Jack 2007) Zyprexa<br />

(olanzapine)<br />

United<br />

Kingdom<br />

United<br />

Kingdom<br />

and United<br />

States<br />

Nigeria<br />

United<br />

States<br />

Britain<br />

at least 18<br />

people die<br />

Officials seize<br />

5,000 packets of<br />

counterfeit<br />

Tamiflu in early<br />

2006<br />

FDA issues a<br />

recall notice <strong>for</strong><br />

One Touch<br />

Basic/Profile and<br />

Ultra Blood<br />

Glucose strips<br />

NAFDAC shuts<br />

down the<br />

Bridgehead<br />

Market- Netting<br />

82 semi loads of<br />

counterfeit<br />

pharmaceuticals<br />

valued at $60<br />

million USD<br />

Xenical obtained<br />

24 related web<br />

sites were found<br />

to have no active<br />

ingredient. One<br />

capsule was<br />

found to have the<br />

active ingredient<br />

of another drug<br />

Three batch<br />

numbers of<br />

Zyprexa are<br />

shown to have<br />

only 60% of the<br />

active<br />

pharmaceutical<br />

ingredient.<br />

Indicated to be<br />

the first time<br />

counterfeits have<br />

been linked to<br />

parallel trade.<br />

- 75 -


Appendix C- Types of Hospital Supply Chains<br />

Standard Supply Chain<br />

<strong>The</strong> standard supply chain represents a model where all inventories are controlled<br />

by the hospital using varying personnel <strong>for</strong> purchase, management and<br />

handling of said inventories. Under this model, materials are delivered in bulk<br />

using various suppliers and transported to a main storage facility. <strong>The</strong> materials<br />

are then transferred to secondary store rooms, usually located within the wards<br />

as stocks are diminished. “Typically, hospitals do not track perpetual inventory,<br />

but rather use visual cues to decide when to place an order <strong>for</strong> more material.<br />

Various hospital employees can pull inventory as they see fit with no record or<br />

accountability.” (DeScioli 2005)<br />

Lack of an organized inventory system and little incentive or time to be concerned<br />

with hospital inventory leads to inflated inventories and high occurrences<br />

of stock outs. Additionally, lack of transparency throughout the entire hospital<br />

campus makes it impossible to accurately assess what is in excess or short supply,<br />

leading to inefficiencies in ordering and restocking.<br />

Stockless Inventory Systems<br />

As a result of the a<strong>for</strong>ementioned difficulties, and in response to pressures discussed<br />

previously, the distributors of healthcare products began to offer stockless<br />

inventory programs. In a stockless system, inventory is not delivered in<br />

bulk, as it is <strong>for</strong> the standard supply chain, but in pieces, as ordered by the hospital.<br />

Orders are initiated from the ward and delivered to the ward. Under this<br />

model, the distributor assumes the role of holding and replenishing the inventory<br />

(previously held by the central hospital storage facility), resulting in fewer redundancies.<br />

(DeScioli 2005) Distributors benefit from this by marking up products<br />

between 3-7% <strong>for</strong> this service, and by capturing a greater share of orders. Hospitals<br />

benefit from reductions in inventory, labor costs and stockouts. (DeScioli<br />

2005)<br />

Benefits of the move away from standard systems to stockless inventory systems<br />

are documented. Rivard-Royer et al. indicated that such a switch reduced fulltime<br />

equivalents (FTEs) by 45%. (2002) Inventory reductions of 40-80% have<br />

also been noted (Wilson, Cunningham et al. 1992). Reduced inventories and<br />

fewer employees impact the financial sheets, estimates of yearly savings range<br />

from $400,000 to $1,000,000 (DeScioli 2005); it has also been suggested that<br />

removal of the centeralized store room can be better-leveraged as revenue generating<br />

space than a warehouse <strong>for</strong> supplies.<br />

Vendor Managed Inventory<br />

One potential problem associated with the stockless inventory system described<br />

in the previous section is that there is not incentive <strong>for</strong> ordering efficiencies.<br />

Supplies can be ordered a piece at a time. As such, distributors increase their<br />

charges to account <strong>for</strong> these inefficiencies.<br />

- 76 -


A third option of inventory management employed by hospitals is the vendor managed<br />

inventory (VMI) system. “Under VMI, the distributor hires employees to<br />

work in the hospital and assumes all material operation duties, including material<br />

handling, warehousing and purchasing. <strong>The</strong> distributor not only purchases material<br />

from its own facilities, but also from manufacturers and their competitors.”<br />

(DeScioli 2005)<br />

<strong>The</strong> benefit of a VMI approach, the distributors, who have a vested interest in optimizing<br />

order size and inventory, are in charge of these processes. As such, the<br />

VMI stockless system offers the advantage of cost reduction.<br />

Consignment<br />

Consignment is a condition that can be applied to the standard supply chain, the<br />

stockless inventory supply chain or the VMI model of inventory management.<br />

Consignment has the advantage of decreasing the inventory assets of the hospital.<br />

Under a consignment paradigm, the supplier owns the inventory until its use.<br />

(DeScioli 2005)<br />

- 77 -


Appendix D- Bar Codes and RFID<br />

Automatic identification offers multiple technology choices <strong>for</strong> solutions.<br />

All offer significant upgrades over human data collection, and a choice should<br />

focus on which offer the most upside. In some ways, it is like arguing over<br />

whether walking, a bike, a Ferrari, a truck or a limousine is best <strong>for</strong> transporting<br />

someone from home to work. All mechanisms will get you there; the difference is<br />

in the ease with which this will happen; of course, the costs are quite different.<br />

What people <strong>for</strong>get is that the key concerns are local conditions and the<br />

transportation infrastructure, not the type of vehicle used. Each vehicle has its<br />

benefits and detriments depending on living and commuting differences, but all<br />

vehicles need travel ways and common rules of the road. <strong>The</strong> same can be said<br />

when comparing Auto ID. However, a comparison of technologies is necessary<br />

to examine their respective abilities to move over the so-called required terrain.<br />

Radio Frequency Identification (RFID)<br />

<strong>The</strong>re is little prescriptive guidance on how to effectively implement and utilize<br />

RFID even though there is clear pressure and incentive to adopt the technology.<br />

Because retail outlets like Wal-Mart and Metro, regulators 15 and legislators 16 are<br />

pushing <strong>for</strong> the adoption of RFID; the expectation is rapid technological<br />

refinement and improvement. History demonstrates that new technologies go<br />

through a dynamic period of development, fallout and improvement. It is likely<br />

15 <strong>The</strong> FDA Counterfeit Drug Task Force Report in 2006 clearly recommended RFID. <strong>The</strong> document<br />

was reviewed and endorsed by the acting Commissioner of the FDA, Andrew C. von Eschnenbach,<br />

MD<br />

16 H.R. 4829, Reducing Fraudulent and Imitation Drugs Act of 2006 was introduced by the Honorable<br />

Dan Burton (Indiana) and is intended to “direct the Secretary of Health and human Services<br />

to require incorporation of counterfeit-resistant technologies into the packaging of prescription<br />

drugs, and <strong>for</strong> other purposes.” RFID was listed as a required technology<br />

- 78 -


that the use of RFID in the supply chain will follow a similar pattern, given that<br />

two assumptions are met:<br />

1. That costs decrease substantially.<br />

2. That the technology and read rates <strong>for</strong> tags prove to be highly<br />

reliable. (Clarke, Twede et al. 2006)<br />

RFID, as an automated identification technology, is a carrier of in<strong>for</strong>mation<br />

and other functionality, is cost prohibitive <strong>for</strong> many items (e.g., OTC aspirin 100<br />

tablet). It has functionality and frequencies that will vary greatly, and its use will,<br />

at least in the <strong>for</strong>eseeable future, require visual backup. <strong>The</strong> most immediate<br />

role it will likely play in the healthcare supply chain is one of asset tracking. In<br />

this capacity, tags can be used to locate medical equipment in near real-time,<br />

enhancing the efficiency of their use.<br />

<strong>The</strong> battle <strong>for</strong> the pharmaceutical and medical device RFID market has<br />

largely been fought between high frequency (HF, 13.56 MHz) and ultra high<br />

frequency (UHF, 860-960 MHz). <strong>The</strong>re are benefits to each frequency range that<br />

make them particularly well suited <strong>for</strong> the healthcare supply chain applications.<br />

HF readers use magnetic coupling to power the tags, though this limits the<br />

effective read distance to about a meter. HF does, however, prevent signal<br />

attenuation from occurring around metals and water-based products. <strong>The</strong><br />

primary use <strong>for</strong> this is near field reads, which typically means item level or case<br />

level reads in a controlled environment such as on a conveyor. <strong>The</strong> maximum<br />

read capability <strong>for</strong> this frequency is currently around 200 tags per second.<br />

UHF readers utilize a passive backscatter (far field) approach that operates<br />

over longer distances than HF (8-9 meters), but the signal is not very good<br />

- 79 -


around water, and metals can also be deleterious due to wave reflection. UHF is<br />

better <strong>for</strong> reads requiring longer distances and, thus, is used extensively in the<br />

warehousing and transportation arenas. UHF has a read rate capability of up to<br />

1,000 tags per second.<br />

<strong>The</strong>se seemingly incongruous needs have fostered development of a<br />

newer approach to handle both concerns; that of using UHF <strong>for</strong> both near field<br />

and far field settings. <strong>The</strong> overriding benefit to this is that such a system gives<br />

the ability to work in the far field with current Gen 2 equipment while at the same<br />

time, allowing the tags to work in the near field <strong>for</strong> item and case applications.<br />

This application offers to reduce system costs since both applications could be<br />

taken advantage of by a single tag requirement. However, as of this writing, near<br />

field UHF systems are not commercially available <strong>for</strong> testing or implementation.<br />

Regardless, the system cost benefits of utilizing a single frequency tag to read in<br />

both near field and far field is keeping interest in this development.<br />

Bar Codes<br />

A bar code is a graphic representation of data (alpha, numeric, or both)<br />

that is machine-readable. Bar codes encode numbers and letters into different<br />

types of symbologies. Linear (or one-dimensional) codes, two-dimensional<br />

codes (e.g., Data Matrix), and composite codes (a combination of one- and twodimensional<br />

symbologies) are available. (HIMSS 2003; ECRI 2005b) <strong>The</strong> primary<br />

advantage of two-dimensional and composite codes is that they can encode<br />

more in<strong>for</strong>mation than one-dimensional bar codes within the same space<br />

allotment.<br />

- 80 -


Bar codes are not fully utilized throughout the pharmaceutical and medical<br />

device supply chain, though some market channels are saturated with effective<br />

uses. It is important to note that the pressure to implement RFID conveniently<br />

ignores that bar codes have yet to be fully implemented in the healthcare<br />

industry.<br />

A survey published by AdvaMed in 2004 indicates that on the<br />

manufacturer side, 78% (of 41 respondents representing 37 different<br />

manufacturing firms) already apply bar codes at some level of packaging. In<br />

addition, 83% of FDA Class I medical devices, 86% of FDA Class II devices, and<br />

76% of FDA Class III devices made by the respondents were identified as having<br />

some <strong>for</strong>m of bar code. More than 80% of firms with more than $30 million in<br />

sales per year indicated that they use bar codes, though that figure drops to 54%<br />

<strong>for</strong> companies with revenues of less than $30 million. (AdvaMed 2004)<br />

Although the percentage of manufacturers who applied bar codes to unitof-use<br />

packaging was lower than that reported <strong>for</strong> shelf packs, the AdvaMed<br />

survey indicated that a number of manufacturing firms are applying bar codes at<br />

the unit-of-use level. According to the survey results, over 40% of FDA Class I<br />

products and approximately 50% of FDA Class II products are bar coded at the<br />

unit-of-use level. (AdvaMed 2004)<br />

Still, there are many areas of the global pharmaceutical supply chain that<br />

are not set up <strong>for</strong> implementation and use. This fact should not be <strong>for</strong>gotten, nor<br />

ignored. Rather, it should be considered such that when a noncompliant market<br />

channel does have the ability to implement or upgrade, the move should then be<br />

to a recommended global standard.<br />

- 81 -


Bar code technology can be of benefit to healthcare supply chains <strong>for</strong><br />

inventory control and asset locating, though not in real-time. Bar code technology<br />

lends itself very well <strong>for</strong> supply inventory control, especially <strong>for</strong> disposable items<br />

such as dressings, catheters, and IV tubing, where those items are usually kept<br />

in the same location (e.g., stockroom). (ECRI 2005b)<br />

Another key consideration is the size of the medical device that needs to<br />

be identified. Smaller devices may have specific requirements that certain<br />

automatic identification technologies are not yet able to accommodate.<br />

As summarized by ECRI, each technology has its own set of strengths<br />

and disadvantages that should be considered, depending on the characteristics<br />

of the medical devices involved, as well as the intended application. In some<br />

cases, one technology may be the preferred solution over another; in other<br />

cases, both technologies may be used in combination to achieve a particular<br />

goal. (ECRI 2005b)<br />

One dimensional (linear) bar codes are a type of Auto ID technology.<br />

Many types of codes exist in this category, all of which are considered bar codes,<br />

but all of which fall into distinct sub-classifications. <strong>The</strong> most common bar code<br />

currently seen in the United States is the 12 character numerical Universal<br />

Product Code, or the UPC. (Kapoor 2000) <strong>The</strong> UPC is considered a linear, or<br />

1D, bar code. Along with the UPC, other current 1D bar codes include European<br />

Article Number (EAN), Code 39, Interleaved 2/5, and ITF 14 along with many<br />

others. <strong>The</strong>se additional codes may contain letters, numbers, and symbols<br />

depending on the system being used. One-dimensional linear bar codes typically<br />

- 82 -


consist of a contrasting series of dark and light bars and are read by scanners<br />

such as laser scanners. (ECRI 2005a)<br />

According to HIBCC, two-dimensional (2-D) bar code technologies have<br />

desirable applications that RFID does not. For example, a data matrix symbol<br />

can be etched onto metal surfaces whereas most current generation RFID tags<br />

are difficult to implement in such applications. As many medical devices are<br />

manufactured from metal, HIBCC believes that this is an important issue to<br />

consider when reviewing the characteristics of bar code technologies versus<br />

RFID in applications involving medical devices. (Polansky 2005)<br />

Two-dimensional bar codes do, however, have some characteristics that<br />

prevent them from being a generic solution <strong>for</strong> an e-pedigree. First,<br />

counterfeiters can easily replicate linear 2-D bar codes by simply scanning and<br />

printing them . Secondly, a 2-D bar code may not be readable if it is printed onto<br />

a curved surface such as a small syringe, or if the product is positioned such that<br />

the bar code is not visible.<br />

A recent study conducted by a US university found that the chance of a<br />

misread on a 2-D code was less than 1 in 10.5 million. 2-D codes can even be<br />

read if the label has growth or compression in either axis, making them<br />

particularly useful in extreme environments, as seen with the printing of codes<br />

directly onto surgical instruments.<br />

From a healthcare provider perspective, RFID and bar code technologies<br />

can be used <strong>for</strong> many of the same applications, but they may serve different<br />

roles in those applications. For example, bar code labels applied at the unit-ofuse<br />

level may be more cost-effective than applying RFID tags because bar code<br />

- 83 -


labels are currently less than $0.01 per label, based on quantity purchased,<br />

compared to about $0.13 per basic passive RFID tag commonly used <strong>for</strong> this<br />

purpose. (ECRI 2005b; Clarke & Falls 2007)<br />

Though both technologies can be used <strong>for</strong> locating assets, RFID may offer<br />

certain characteristics relevant to this application that may justify its higher price.<br />

For example, equipment bar codes can be scanned manually to provide location<br />

in<strong>for</strong>mation, but only up to the last time the device was scanned. RFID can allow<br />

automatic scanning in certain locations or simplify more frequent manual scans<br />

as the (active) tags can be read from long distances and need not require direct<br />

line-of-sight. (ECRI 2005b)<br />

<strong>The</strong> ability of bar codes and RFID tags to withstand various environmental<br />

conditions differs. Reportedly, RFID tags are less susceptible to damage from<br />

exposure to ice, snow, and dirt when compared to bar codes. (ECRI 2005b)<br />

However, with RFID, there may be issues related to sterilization, as certain types<br />

of sterilization methods (gamma radiation) may cause damage to RFID tags. In<br />

addition, RFID technology may be susceptible to interference from metals or<br />

liquids that can impact the accuracy and reliability of RFID if the application is not<br />

well planned. (ECRI 2005b; Clarke, Twede, et al 2005) While ongoing research<br />

and work continues to overcome these factors, one must remember that not all<br />

global supply chains partners will be able to implement the newest, best, and<br />

probably more expensive solution.<br />

A perspective from industry seems to demonstrate congruence with this<br />

belief. From SysTech, the following in<strong>for</strong>mation is given.<br />

“<strong>The</strong> encoding of EPCs and other in<strong>for</strong>mation on the package may<br />

take one or more of a number of <strong>for</strong>ms. <strong>The</strong>se include electronic<br />

- 84 -


encoding on an RFID tag, printed or lasered bar codes, or printed<br />

human readable text. <strong>The</strong> selection of what <strong>for</strong>m or <strong>for</strong>ms to use<br />

will depend on a number of factors. Some of these factors include;<br />

the level of security desired, the manner in which supply chain<br />

partners or end customers will need to access the in<strong>for</strong>mation on<br />

the package, and the level of redundancy required to ensure<br />

access to the in<strong>for</strong>mation as the product moves through the supply<br />

chain. As you move from RFID to bar codes to human readable<br />

text, the level of security and the ability to confidently authenticate<br />

real product versus counterfeits decreases. It is much easier and<br />

cheaper <strong>for</strong> a counterfeiter to replicate human readable text or a<br />

bar code on a package than it is to create an RFID tag containing<br />

the correct in<strong>for</strong>mation. At the same time, a trading partner may<br />

have bar code readers and be able to read bar codes but not RFID<br />

tags. Finally, RFID technology is still evolving and readability issues<br />

can sometimes arise. A secondary means of providing the product<br />

in<strong>for</strong>mation and EPC decreases the risk that at some point in the<br />

supply chain, the in<strong>for</strong>mation will be inaccessible to someone who<br />

needs it. This is where the inclusion of a bar code, replicating the<br />

in<strong>for</strong>mation on the RFID tag provides added security.<br />

“In addition to providing a more secure process, RFID tags provide<br />

other advantages over bar codes. However, it is not required that<br />

RFID tags be used to enable item level serialized product tracking.<br />

Some companies have implemented successful product tracking<br />

projects using 2-D Data Matrix or Reduced Space Symbology<br />

(RSS) bar coding only.” (SysTech 2006)<br />

- 85 -


Appendix E- Financial Benefits of Implementing Auto<br />

Identification into the Healthcare Supply Chain<br />

Studies Estimating the Financial Benefits of Implementing Auto Identification into<br />

the Healthcare Supply Chain<br />

(Chappell,<br />

Ginsburg et<br />

al. 2002)<br />

(HDMA 2004)<br />

(Barua, Mani<br />

et al. 2006)<br />

(Barua, Mani<br />

et al. 2006)<br />

(Anderson<br />

2007)<br />

(ERG 2006)<br />

Accenture<br />

study<br />

University of<br />

Texas, USA<br />

University of<br />

Texas, USA<br />

New Zealand<br />

Study <strong>for</strong> US<br />

FDA<br />

Benefits <strong>for</strong> Manufacturers<br />

Better control of stock- Stock outs are estimated<br />

to cost $3.41 billion, of which, 16% may be<br />

eliminated by the use of RFID. Overstock<br />

situations are common to maintain a high level<br />

of service, increasing the carrying costs and<br />

expired product. Estimates RFID would reduce<br />

inventory levels by 10-30%, potentially resulting<br />

in an annual savings of $15.78 billion<br />

Estimate savings resulting from the<br />

implementation of a combined EPC/RFID<br />

system is between $200-$400 million <strong>for</strong> the<br />

healthcare industry by avoiding damage to<br />

brand value and public confidence through the<br />

prevention of counterfeiting<br />

“<strong>The</strong> benefits of RFID far outweigh the cost,<br />

even at the current adoption levels.” Benefits<br />

include counterfeit avoidance. $4.31 billion is<br />

lost due to counterfeiting shrinkage and parallel<br />

trade. Study estimates $1.85 billion in cash<br />

flow savings and $6.32 billion in brand<br />

protection benefits<br />

Increased efficiencies in recall targeting: Based<br />

on an AT Kearney study that estimates savings<br />

from a targeted recall, verses a broad cast<br />

recall, savings range from $50,000 to $100,000<br />

per year per 10 billion in revenue (based on<br />

more than 50% tagging penetration at the item<br />

or unit level). Savings include time <strong>for</strong><br />

administration- Potential annual value estimated<br />

to be $16.77 billion<br />

Study hypothesizes the costs and benefits of<br />

implementing a bar coding system at bedside in<br />

all DHB hospitals throughout New Zealand. It is<br />

estimated that the total net discounted savings<br />

over 12 years would be $115M.<br />

UDI (unique device identification) combined<br />

with auto-identification technology can result in<br />

more accurate and faster product delivery and<br />

improved quality control.<br />

- 86 -


(ERG, 2006)<br />

(HDMA 2004)<br />

(Poon, Cina et<br />

al. 2005)<br />

(Kilzer, 2005<br />

as indicated<br />

by ERG)<br />

(Kaushal, Jha<br />

et al. 2006)<br />

(Barua, Mani<br />

et al. 2006)<br />

(ERG, 2006)<br />

(Barua, Mani<br />

et al. 2006)<br />

(Barua, Mani<br />

et al. 2006)<br />

(Lenderink<br />

2007)<br />

Study <strong>for</strong> US<br />

FDA<br />

Benefits <strong>for</strong> Direct Providers – Hospitals, etc<br />

Study at a 735<br />

bed tertiary<br />

academic<br />

hospital<br />

St. Alexis<br />

Medical<br />

Center-<br />

Bismarck, ND<br />

Study at<br />

Brigham and<br />

Women’s<br />

Hospital<br />

University of<br />

Texas- USA<br />

Veterans<br />

Administration<br />

University of<br />

Texas- USA<br />

University of<br />

Texas- USA<br />

<strong>The</strong><br />

Netherlands<br />

Manufacturers will be able to conduct recalls<br />

more efficiently and completely.<br />

Estimate savings between $200-$400 million <strong>for</strong><br />

the healthcare industry by avoiding damage to<br />

brand value and public confidence through the<br />

prevention of counterfeiting<br />

Error rate of dispensing medications decreased<br />

by 85% and <strong>for</strong> all potential ADEs related to<br />

dispensing of medications decreased by 60%<br />

Inventory losses have been reduced to a rate of<br />

less than 1 percent, compared with the national<br />

average of 15 to 20 percent. Improved<br />

inventory control has paid the cost of the bar<br />

coding system <strong>for</strong> the hospital.<br />

Researchers implement a Computerized<br />

Physician Order Entry System (CPOE) at a cost<br />

of 11.8 million, resulting in a 9.5 million dollar<br />

savings over a period from 1993-2002; saving<br />

1.05 million in prevention of ADEs, 2.24 million<br />

with guidance in renal dosage 0.96 million in<br />

utilization of nursing time and 0.88 million in<br />

drug guidance<br />

Estimate RFID could enable $44.8 million in<br />

hospital inventory savings<br />

<strong>The</strong> VA calculated that in a system with a<br />

unique identifier <strong>for</strong> medical devices in place<br />

and Auto ID, their hospitals could realize a 26%<br />

return on investment (ROI) as a result of<br />

savings in many sectors of their operation<br />

Estimate that RFID tracking can eliminate noncompliance<br />

costs, resulting in an estimated<br />

$165.12 billion in savings (not including the<br />

value of the lives lost)<br />

Estimate the benefits of RFID in asset tracking<br />

(<strong>for</strong> hospitals) to be $3.63 billion in “found”<br />

equipment plus a value of $8.72 billion in<br />

increased asset utilization<br />

A study at Midden-Brabant in Tilburg showed<br />

an annual cost of US $1,576,800 <strong>for</strong> a 400 bed<br />

hospital under best case scenario of 1% error<br />

rate producing 21,024 errors per year and $75<br />

cost per error. Most if not all of this could be<br />

saved by fully implementing auto-ID. <strong>The</strong> study<br />

projects a payback period of 3.2 years on the<br />

investment in such a system.<br />

- 87 -


(Meuleman<br />

2007)<br />

(Akiyama and<br />

Kondo 2007)<br />

(Akiyama and<br />

Kondo 2007)<br />

(Anderson<br />

2007)<br />

(Maviglia, Yoo<br />

et al. 2007)<br />

Belgium<br />

Japan<br />

Japan<br />

New Zealand<br />

Brigham and<br />

Women’s<br />

USA<br />

St Jan Hospital in Brugge, a 900 bed hospital,<br />

reporting on patient safety felt compelled to<br />

make the public statement “No bar code, no<br />

business” to reflect the economic importance of<br />

this patient safety issue.<br />

Computer system installed in International<br />

Medical Center of Japan in 2001. It uses bar<br />

code to identify patient, medical activities,<br />

medicines, personnel. When 40% of some<br />

treatment instructions were changed, the<br />

automatic machine change capability nurse<br />

workload did not increase, overtime was<br />

reduced to zero and accidents fell to zero<br />

because automation eliminated manual tasks.<br />

Computer system installed in International<br />

Medical Center of Japan in 2001. It uses bar<br />

code to identify patient, medical activities,<br />

medicines, personnel. Cost savings effect alone<br />

is over four million dollars per year. Qualities of<br />

care and improved outcomes have shown<br />

equally significant improvement.<br />

Study hypothesizes the costs and benefits of<br />

implementing a bar coding system at bedside in<br />

all DHB hospitals throughout New Zealand. It is<br />

estimated that the total net discounted savings<br />

over 12 years would be $115M.<br />

Researchers investigate the effects on the<br />

implementation of bar code assisted medication<br />

dispensing system. It is estimated that the net<br />

benefit after 5 years was $3.49 million.<br />

Benefits <strong>for</strong> Insurers<br />

(ERG, 2006) US “Medicare and Medicaid reimbursement is<br />

based on broad billing codes that might not<br />

differentiate between inexpensive and<br />

expensive medical devices… UDI provides an<br />

opportunity to improve this system by uniquely<br />

identifying each product…UDI will help the<br />

Centers <strong>for</strong> Medicare and Medicaid Services<br />

(CMS) to combat other incidences of fraud and<br />

abuse. Other insurers may also be able to take<br />

advantage of UDI in a similar manner.”<br />

Benefits <strong>for</strong> Distributors<br />

(Pleasant<br />

2003)<br />

<strong>The</strong> 1996<br />

Efficient<br />

Healthcare<br />

Consumer<br />

Response<br />

More than $11 Billion in healthcare supply chain<br />

costs are avoidable process costs, and a major<br />

contributor to the inefficiency is the absence of<br />

a bar code<br />

- 88 -


(HDMA 2004)<br />

(HDMA 2004)<br />

(Barua, Mani<br />

et al. 2006)<br />

Survey<br />

University of<br />

Texas<br />

“Supports the establishment of a consistent,<br />

industry-wide initiative… It is recommended that<br />

healthcare distributors develop the appropriate<br />

infrastructure <strong>for</strong> tracking and tracing of<br />

products utilizing the EPC.”<br />

Estimates annual benefits to an individual<br />

distributor with $10 billion in sales could be as<br />

high as $15.5 million… Overall benefits of a<br />

combined EPC/RFID would be between $200<br />

million and $400 annually <strong>for</strong> healthcare<br />

distributors.<br />

In the US alone, the visibility that would be<br />

provided by an RFID system would yield a<br />

$1.78 billion inventory savings <strong>for</strong> the<br />

distribution industry and that it has the potential<br />

to reduce annual distribution labor costs by<br />

$563.54 million (including savings in receiving,<br />

check in, cycle counting and order filling<br />

- 89 -


Appendix F- Patient Safety Benefits of Implementing Automatic<br />

Identification into the Healthcare Supply Chain<br />

Studies Estimating the Patient Safety Benefits of Implementing Auto<br />

(Johnson<br />

2002; U.S.<br />

Food and<br />

Drug<br />

Administration<br />

2003; HDMA<br />

2004)<br />

(Meadows<br />

2003)<br />

(Towner<br />

2004)<br />

(U.K.<br />

Healthcare<br />

Quality<br />

Directorate<br />

2007)<br />

(Meuleman<br />

2007)<br />

(Lenderink<br />

2007)<br />

(Hoyle and<br />

Hay 2007)<br />

Identification into the Healthcare Supply Chain<br />

USA<br />

Bar codes found to reduce hospital<br />

medication errors by 70-90%<br />

USA<br />

Britain<br />

Belgium<br />

<strong>The</strong><br />

Netherlands<br />

A survey of<br />

110 hospitals<br />

in<br />

17 countries<br />

8 languages<br />

A Veteran’s Administration (VA) hospital in<br />

Topeka, KS reports an 86% reduction in<br />

error rate after implementing bar codes<br />

Improved visibility of clinical trials. If RFID<br />

were to reduce dosage and data entry<br />

errors, stock outs and the duration of the<br />

trial by 5%, the estimated revenue gain<br />

could be nearly $370 million with an<br />

additional cash flow saving estimated at<br />

$159 million<br />

“Strongly recommends establishment of a<br />

global standard which will reduce errors,<br />

improve record keeping, improve stock<br />

rotation <strong>for</strong> products like vaccines and<br />

blood, improve efficiency and reduce<br />

bureaucracy<br />

St Jan Hospital: A global standard bar code<br />

was the key to hospital-wide applications<br />

that led to ability to identify articles,<br />

patients, activities, and locations within the<br />

hospital.<br />

<strong>The</strong> study found that only 35% of<br />

manufacturers bar code; 100% is needed.<br />

More attention must be placed on making a<br />

uni<strong>for</strong>m standard <strong>for</strong> medication bar codes.<br />

<strong>The</strong> report calls <strong>for</strong> expansion of automatic<br />

identification systems and <strong>for</strong> standards<br />

that will eliminate technology differences.<br />

60% of respondents now manually record<br />

data related to patient safety – this must be<br />

reduced. 18 % of respondents use scans<br />

<strong>for</strong> patient safety. 23% use scans <strong>for</strong> other<br />

purposes. Auto ID will: reduce errors in<br />

- 90 -


data capture, provide better<br />

documentation, provide bed side scanning<br />

to enhance the 5 patient rights <strong>for</strong> drugs or<br />

the 8 patient rights <strong>for</strong> devices, alert <strong>for</strong><br />

allergies, avoid wrong blood transfusion.<br />

(Hardy 2007) UK This hospital chose to use RFID. Standard<br />

codes are an integral part of the electronic<br />

communication system. It integrates patient<br />

records, Rx writing, pharmacist verification,<br />

robot picking of Rx orders, nurse charting,<br />

bedside identification of the patient.<br />

(Huang 2007) China In Shanghai FDA (2006) No 751, is<br />

ordering that implantable medical devices<br />

be bar coded with patient safety<br />

in<strong>for</strong>mation such as: product characteristic<br />

code, tracing code, expiry date, etc<br />

(Kreuzer<br />

2007)<br />

(De Vries<br />

2007)<br />

A survey of<br />

210<br />

respondents<br />

in at least 19<br />

countries and<br />

5 languages<br />

<strong>The</strong><br />

Netherlands<br />

This survey by EUCOMED found that only<br />

9% of respondents do not use any code.<br />

39% use <strong>GS1</strong> codes, 19% use HIBC, and<br />

there are some proprietary codes. 6 auto<br />

ID standards are in use.<br />

<strong>The</strong> Association <strong>for</strong> the Advancement of<br />

Pharmacy (KNMP) created ZorgDAS to<br />

stimulate use of a standard automatic<br />

identification system and to organize data<br />

synchronization of business data system<br />

with patient safety data system.<br />

(Kittlaus 2007) Europe <strong>The</strong> German Association of Hospital<br />

Pharmacists (ADKA) and the European<br />

Association of Hospital Pharmacists<br />

(EAHP) demand that drugs be packed in<br />

unit dose, with bar code on each single<br />

dose. This, they say in necessary to<br />

improve patient safety in drug therapy and<br />

to ensure the highest quality in medical<br />

treatment in European hospitals.<br />

Douglas, 2007 U.S. Bedside bar coding provided data: to<br />

support a redefinition of late dose to grace<br />

period, which better served patient safety,<br />

to reduce omitted dose by 22%, and to<br />

prevent 1300 medication errors during a<br />

nine month period.<br />

(HDMA 2004)<br />

Computerized Physician Order Entry<br />

(CPOE) utilizes bar code. When used,<br />

CPOE has reduced serious medication<br />

errors by 55 % in all phases of the<br />

- 91 -


(Akiyama<br />

2007)<br />

(Anderson<br />

2007)<br />

(Maviglia, Yoo<br />

et al. 2007)<br />

Japan<br />

Brigham and<br />

Women’s<br />

USA<br />

medication process. As of 2004, only 2.5%<br />

of hospitals had fully implemented CPOE.<br />

Computer system installed in International<br />

Medical Center of Japan in 2001. It helps<br />

prevent medical errors by making it<br />

possible to cross-check such data as<br />

patient identification, medical activities,<br />

medicines, professionals who per<strong>for</strong>m<br />

medical activities. Bar codes are used by<br />

the system to uniquely identify each<br />

pertinent element in the hospital<br />

environment.<br />

<strong>The</strong> theoretical research created estimates<br />

of what a bar code system would cost and<br />

save, if implemented throughout all of New<br />

Zealand’s DHB hospitals. It was estimated<br />

that over the first 12 years: 1,050 lives<br />

would be saved, 2,800 people would be<br />

prevented from being permanently disabled<br />

and 29,000 short term disabilities would be<br />

averted.<br />

Researchers estimate that the<br />

implementation of a bar code assisted<br />

medication dispensing system reduced 517<br />

ADEs annually, resulting in an annual<br />

savings of $2.20 million<br />

RFID, as an automated identification technology, is a carrier of in<strong>for</strong>mation<br />

and other functionality, is cost prohibitive <strong>for</strong> many items (e.g., OTC aspirin 100<br />

tablet). It has functionality and frequencies that will vary greatly, and its use will,<br />

at least in the <strong>for</strong>eseeable future, require visual backup. It may require human<br />

readable linear bar codes <strong>for</strong> National Drug Code (NDC) or Health Industry Bar<br />

Codes (HIBC), or repeated in<strong>for</strong>mation such as 2-D bar codes encoding unique<br />

object identifiers. <strong>The</strong> FDA should mandate 2-D bar code and recommend RFID<br />

and, further, the FDA should create congruency between 2-D and linear bar code<br />

timelines. (Engels 2006)<br />

- 92 -


<strong>The</strong> battle <strong>for</strong> the pharmaceutical and medical device RFID market has<br />

largely been fought between high frequency (HF, 13.56 MHz) and ultra high<br />

frequency (UHF, 860-960 MHz). <strong>The</strong>re are benefits to each frequency range that<br />

make them particularly well suited <strong>for</strong> the healthcare supply chain applications.<br />

HF readers use magnetic coupling to power the tags, though this limits the<br />

effective read distance to about a meter. HF does, however, prevent signal<br />

attenuation from occurring around metals and water-based products. <strong>The</strong><br />

primary use <strong>for</strong> this is near field reads, which typically means item level or case<br />

level reads in a controlled environment such as on a conveyor. <strong>The</strong> maximum<br />

read capability <strong>for</strong> this frequency is currently around 200 tags per second.<br />

UHF readers utilize a passive backscatter (far field) approach that operates<br />

over longer distances than HF (8-9 meters), but the signal is not very good<br />

around water, and metals can also be deleterious due to wave reflection. UHF is<br />

better <strong>for</strong> reads requiring longer distances and, thus, is used extensively in the<br />

warehousing and transportation arenas. UHF has a read rate capability of up to<br />

1,000 tags per second.<br />

<strong>The</strong>se seemingly incongruous needs have fostered development of a<br />

newer approach to handle both concerns; that of using UHF <strong>for</strong> both near field<br />

and far field settings. <strong>The</strong> overriding benefit to this is that such a system gives<br />

the ability to work in the far field with current Gen 2 equipment while at the same<br />

time, allowing the tags to work in the near field <strong>for</strong> item and case applications.<br />

This application offers to reduce system costs since both applications could be<br />

taken advantage of by a single tag requirement. However, as of this writing, near<br />

field UHF systems are not commercially available <strong>for</strong> testing or implementation.<br />

- 93 -


Regardless, the system cost benefits of utilizing a single frequency tag to read in<br />

both near field and far field is keeping interest in this development.<br />

Bar Codes<br />

A bar code is a graphic representation of data (alpha, numeric, or both)<br />

that is machine-readable. Bar codes encode numbers and letters into different<br />

types of symbologies. Linear (or one-dimensional) codes, two-dimensional<br />

codes (e.g., Data Matrix), and composite codes (a combination of one- and twodimensional<br />

symbologies) are available. (HIMSS 2003; ECRI 2005b) <strong>The</strong> primary<br />

advantage of two-dimensional and composite codes is that they can encode<br />

more in<strong>for</strong>mation than one-dimensional bar codes within the same space<br />

allotment.<br />

Bar codes are not fully utilized throughout the pharmaceutical and medical<br />

device supply chain, though some market channels are saturated with effective<br />

uses. It is important to note that the pressure to implement RFID conveniently<br />

ignores that bar codes have yet to be fully implemented in the healthcare<br />

industry.<br />

A survey published by AdvaMed in 2004 indicates that on the<br />

manufacturer side, 78% (of 41 respondents representing 37 different<br />

manufacturing firms) already apply bar codes at some level of packaging. In<br />

addition, 83% of FDA Class I medical devices, 86% of FDA Class II devices, and<br />

76% of FDA Class III devices made by the respondents were identified as having<br />

some <strong>for</strong>m of bar code. More than 80% of firms with more than $30 million in<br />

sales per year indicated that they use bar codes, though that figure drops to 54%<br />

<strong>for</strong> companies with revenues of less than $30 million. (AdvaMed 2004) Although<br />

- 94 -


the percentage of manufacturers who applied bar codes to unit-of-use packaging<br />

was lower than that reported <strong>for</strong> shelf packs, the AdvaMed survey indicated that<br />

a number of manufacturing firms are applying bar codes at the unit-of-use level.<br />

According to the survey results, over 40% of FDA Class I products and<br />

approximately 50% of FDA Class II products are bar coded at the unit-of-use<br />

level. (AdvaMed 2004) Similar data was found in a <strong>GS1</strong> audit conducted in New<br />

Zealand, which indicated that 46 percent of items destined to be used in local<br />

hospital and community pharmacy channels were packaged with machine<br />

readable barcodes [sic] at ‘retail’ package level.”(Anderson 2007)<br />

Still, there are many areas of the global pharmaceutical supply chain that<br />

are not set up <strong>for</strong> implementation and use. This fact should not be <strong>for</strong>gotten, nor<br />

ignored. Rather, it should be considered such that when a noncompliant market<br />

channel does have the ability to implement or upgrade, the move should then be<br />

to a recommended global standard.<br />

Bar code technology can be of benefit to healthcare supply chains <strong>for</strong><br />

inventory control and asset locating, though not in real-time. Bar code technology<br />

lends itself very well <strong>for</strong> supply inventory control, especially <strong>for</strong> disposable items<br />

such as dressings, catheters, and IV tubing, where those items are usually kept<br />

in the same location (e.g., stockroom). (ECRI 2005b)<br />

Another key consideration is the size of the medical device that needs to<br />

be identified. Smaller devices may have specific requirements that certain<br />

automatic identification technologies are not yet able to accommodate.<br />

As summarized by ECRI, each technology has its own set of strengths<br />

and disadvantages that should be considered, depending on the characteristics<br />

- 95 -


of the medical devices involved, as well as the intended application. In some<br />

cases, one technology may be the preferred solution over another; in other<br />

cases, both technologies may be used in combination to achieve a particular<br />

goal. (ECRI 2005b)<br />

One dimensional (linear) bar codes are a type of Auto ID technology.<br />

Many types of codes exist in this category, all of which are considered bar codes,<br />

but all of which fall into distinct sub-classifications. <strong>The</strong> most common bar code<br />

currently seen in the United States is the 12 character numerical Universal<br />

Product Code, or the UPC. (Kapoor 2000) <strong>The</strong> UPC is considered a linear, or<br />

1D, bar code. Along with the UPC, other current 1D bar codes include <strong>GS1</strong><br />

Code 39, Interleaved 2/5, and ITF 14 along with many others. <strong>The</strong>se additional<br />

codes may contain letters, numbers, and symbols depending on the system<br />

being used. One-dimensional linear bar codes typically consist of a contrasting<br />

series of dark and light bars and are read by scanners such as laser<br />

scanners.(ECRI 2005a)<br />

According to HIBCC, two-dimensional (2-D) bar code technologies have<br />

desirable applications that RFID does not. For example, a data matrix symbol<br />

can be etched onto metal surfaces whereas most current generation RFID tags<br />

are difficult to implement in such applications. As many medical devices are<br />

manufactured from metal, HIBCC believes that this is an important issue to<br />

consider when reviewing the characteristics of bar code technologies versus<br />

RFID in applications involving medical devices. (Polansky 2005)<br />

Two-dimensional bar codes do, however, have some characteristics that<br />

prevent them from being a generic solution <strong>for</strong> an e-pedigree. First,<br />

- 96 -


counterfeiters can easily replicate linear 2-D bar codes by simply scanning and<br />

printing them. Secondly, a 2-D bar code may not be readable if it is printed onto<br />

a curved surface such as a small syringe, or if the product is positioned such that<br />

the bar code is not visible.<br />

A recent study conducted by a US university found that the chance of a<br />

misread on a 2-D code was less than 1 in 10.5 million. 2-D codes can even be<br />

read if the label has growth or compression in either axis, making them<br />

particularly useful in extreme environments, as seen with the printing of codes<br />

directly onto surgical instruments.<br />

From a healthcare provider perspective, RFID and bar code technologies<br />

can be used <strong>for</strong> many of the same applications, but they may serve different<br />

roles in those applications. For example, bar code labels applied at the unit-ofuse<br />

level may be more cost-effective than applying RFID tags because bar code<br />

labels are currently less than $0.01 per label, based on quantity purchased,<br />

compared to about $0.13 per basic passive RFID tag commonly used <strong>for</strong> this<br />

purpose.(ECRI 2005b; Clarke and Falls 2006)<br />

Though both technologies can be used <strong>for</strong> locating assets, RFID may offer<br />

certain characteristics relevant to this application that may justify its higher price.<br />

For example, equipment bar codes can be scanned manually to provide location<br />

in<strong>for</strong>mation, but only up to the last time the device was scanned. RFID can allow<br />

automatic scanning in certain locations or simplify more frequent manual scans<br />

as the (active) tags can be read from long distances and need not require direct<br />

line-of-sight. (ECRI 2005b)<br />

- 97 -


<strong>The</strong> ability of bar codes and RFID tags to withstand various environmental<br />

conditions differs. Reportedly, RFID tags are less susceptible to damage from<br />

exposure to ice, snow, and dirt when compared to bar codes. (ECRI 2005b)<br />

However, with RFID, there may be issues related to sterilization, as certain types<br />

of sterilization methods (gamma radiation) may cause damage to RFID tags. In<br />

addition, RFID technology may be susceptible to interference from metals or<br />

liquids that can impact the accuracy and reliability of RFID if the application is not<br />

well planned. (Clarke, Twede et al. 2005; ECRI 2005b) While ongoing research<br />

and work continues to overcome these factors, one must remember that not all<br />

global supply chains partners will be able to implement the newest, best, and<br />

probably more expensive solution.<br />

A perspective from industry seems to demonstrate congruence with this<br />

belief. From SysTech, the following in<strong>for</strong>mation is given.<br />

“<strong>The</strong> encoding of EPCs and other in<strong>for</strong>mation on the package may<br />

take one or more of a number of <strong>for</strong>ms. <strong>The</strong>se include electronic<br />

encoding on an RFID tag, printed or lasered bar codes, or printed<br />

human readable text. <strong>The</strong> selection of what <strong>for</strong>m or <strong>for</strong>ms to use<br />

will depend on a number of factors. Some of these factors include;<br />

the level of security desired, the manner in which supply chain<br />

partners or end customers will need to access the in<strong>for</strong>mation on<br />

the package, and the level of redundancy required to ensure<br />

access to the in<strong>for</strong>mation as the product moves through the supply<br />

chain. As you move from RFID to bar codes to human readable<br />

text, the level of security and the ability to confidently authenticate<br />

real product versus counterfeits decreases. It is much easier and<br />

cheaper <strong>for</strong> a counterfeiter to replicate human readable text or a<br />

bar code on a package than it is to create an RFID tag containing<br />

the correct in<strong>for</strong>mation. At the same time, a trading partner may<br />

have bar code readers and be able to read bar codes but not RFID<br />

tags. Finally, RFID technology is still evolving and readability issues<br />

can sometimes arise. A secondary means of providing the product<br />

in<strong>for</strong>mation and EPC decreases the risk that at some point in the<br />

supply chain, the in<strong>for</strong>mation will be inaccessible to someone who<br />

needs it. This is where the inclusion of a bar code, replicating the<br />

in<strong>for</strong>mation on the RFID tag provides added security.<br />

- 98 -


“In addition to providing a more secure process, RFID tags provide<br />

other advantages over bar codes. However, it is not required that<br />

RFID tags be used to enable item level serialized product tracking.<br />

Some companies have implemented successful product tracking<br />

projects using 2-D Data Matrix or Reduced Space Symbology<br />

(RSS) bar coding only.”(SysTech 2006)<br />

- 99 -


Appendix G- US Electronic Pedigree and Bar Coding<br />

Requirements<br />

Tracking and tracing are actually two separate processes although many<br />

discussions presume them to be identical. Tracking examines where the device<br />

is destined and focuses on movement further down the supply chain. <strong>The</strong><br />

concept of tracking involves controlling the shipping and receiving process <strong>for</strong><br />

medical devices, drugs and biologics as well as managing assets and inventories<br />

within healthcare facilities. Tracing examines where an item been up to that point<br />

in time, focusing on locations further up the supply chain. Tracing <strong>for</strong> the<br />

healthcare industry relates to building an audit trail <strong>for</strong> the manufacturing,<br />

shipping, receiving and use of the product in patient care.(ECRI 2005a) This is<br />

the basis <strong>for</strong> the interest in electronic tracking via E-pedigrees.<br />

One of the first pieces of legislation enacted in response to the growing<br />

concerns regarding counterfeit medical products was the Prescription Drug Marketing<br />

Act of 1987, Public Law 100-298, 102 Stat 95 (PDMA), a law meant to<br />

prevent substandard, ineffective or counterfeit drugs from entering the United<br />

States (U.S.). <strong>The</strong> US Congress was moved to action, in large part, as a result<br />

of two high-profile cases. One case involved over 2 million doses of a birth control<br />

tablet, Ovulen-21. <strong>The</strong> pills, which were distributed throughout the U.S., were<br />

imported from Panama and were unapproved, potentially unsafe and ineffective.<br />

<strong>The</strong> other case involved Ceclor, an antibiotic, which was also distributed<br />

throughout the U.S. after being imported.<br />

Among other things, the PDMA:<br />

- 100 -


1. Banned the sale, purchase of, trade of (or offer to sell, purchase<br />

or trade) drug samples and drug coupons;<br />

2. Restricted reimportation of prescription drugs to the manufacturer<br />

of the drug product or <strong>for</strong> emergency medical care;<br />

3. Established requirements <strong>for</strong> drug sample distribution and the<br />

storage and handling of drug samples;<br />

4. Required wholesale distributors of prescriptions drugs to be<br />

State licensed and required FDA to establish minimum requirements<br />

<strong>for</strong> State licensing schemes;<br />

5. Established requirements <strong>for</strong> wholesale distribution of prescription<br />

drugs by unauthorized distributors;<br />

6. Prohibited, with certain exceptions, the sale, purchase or trade<br />

(or offer to sell, purchase, or trade) of prescription drugs that<br />

were purchased by hospitals or healthcare entities, or donated or<br />

supplied at a reduced price to charities; and<br />

7. Established criminal and civil penalties <strong>for</strong> PDMA violations<br />

Both regulatory and legislative activity followed, including the publications<br />

of guidelines <strong>for</strong> the state licensing of wholesalers and amendments to the<br />

PDMA. <strong>The</strong> amendments, entitled the Prescription Drug Amendments of 1992<br />

(PDA- Public law 102-353), required a pedigree. However, manufacturers and<br />

“authorized distributors of record” (ADRs)- those with “ongoing relationships” with<br />

the manufacturer- were excluded from this requirement. Debate regarding the<br />

definition of “ongoing relationship” in the context of who would be excluded from<br />

the requirements further delayed implementation of pedigree requirements.<br />

Additional delays resulted when the House Committee on Appropriations<br />

requested that the Agency review the potential impact on the secondary<br />

wholesale pharmaceutical industry. Because not all of the concerns raised by<br />

the secondary wholesalers could be effectively addressed through regulatory<br />

channels, further delays ensued to await statutory changes.<br />

- 101 -


On June 14, 2006, a notice published in the Federal Register indicated<br />

that the FDA did not intend to delay the effective date of 21CFR §203.3u and<br />

21CFR § 203.5 beyond December 1, 2006. This decision was based, in large<br />

part, on reasons that were presented in the Counterfeit Drug Task Force 2006<br />

Update. However, in November 2006, a district court in New York enjoined the<br />

Federal Government from en<strong>for</strong>cing the pedigree requirement on the grounds<br />

that the requirements would effectively put small distributors out of business.<br />

In addition to the impending Federal requirement <strong>for</strong> drug pedigrees, many<br />

states are looking to enact pedigree laws. (Anonymous 2006) Florida’s pedigree<br />

law, which was to enable companies to select either paper or electronic record<br />

keeping, was to take full effect on July 1, 2006. It required full documentation of<br />

the drug from the manufacturer to the store, requiring each shipment to be<br />

accompanied by the amount of the drug, dosage <strong>for</strong>m and strength, lot numbers,<br />

name and address of each owner with owner signature, and complete shipping<br />

in<strong>for</strong>mation. (Federick 2005) Cali<strong>for</strong>nia’s pedigree law, which specifies the<br />

requirement of an electronic pedigree, was to go into effect on January 1, 2007,<br />

but has been delayed <strong>for</strong> one year. (Anonymous 2006)<br />

Other states are considering similar laws, including Arizona, Arkansas,<br />

Illinois, Indiana, Iowa, Kansas, Maryland, Missouri, Nebraska, New Jersey,<br />

Oklahoma, Oregon, Texas, Utah, and Virginia. (Celia 2006) And in March of<br />

2006, a new bill, the Reducing Fraudulent and Imitation Drugs Act of 2006, was<br />

introduced in the U.S. Congress, which if passed, will require the incorporation of<br />

counterfeit-resisting technologies, such as RFID, into the packaging of any<br />

prescription drug. (Anonymous 2006)<br />

- 102 -


<strong>The</strong> FDA also investigated the use of automatic identification as a way to<br />

ease the prevalence of medication errors, and as a possible technology to meet<br />

the spirit of the PDMA’s pedigree requirement<br />

Largely as an outcome of the promising VA hospital study results<br />

(discussed previously in this document), the FDA held a public meeting on July<br />

26, 2002 to solicit input regarding the possibility of requiring bar codes on certain<br />

FDA regulated products. Specifically, the meeting discussed:<br />

• "the impact of such proposed regulation,<br />

• potential costs and benefits,<br />

• technical in<strong>for</strong>mation regarding the feasibility of implementing medical<br />

product bar code labeling."<br />

(http://www.fda.gov/cdrh/meetings/barcode.html)<br />

A proposed rule on bar code labeling was published on March 14, 2003,<br />

that indicated that bar code requirements would apply to prescription drugs, biological<br />

products and over-the-counter drugs <strong>for</strong> institutional use. Manufacturers,<br />

repackers, relabelers and private label distributors of prescription drugs would be<br />

subject to said requirements. Medical devices continue to be discussed, and bar<br />

codes are not required <strong>for</strong> these products at present.<br />

On February 26, 2004, the FDA published a final rule entitled "Bar Code<br />

Label Requirements <strong>for</strong> Human Drug Products and Biological Products." (21 CFR<br />

Parts 201, 314, and 601) <strong>The</strong> final rule required bar codes <strong>for</strong>,<br />

“human drug products and biological products (other than blood,<br />

blood components and devices regulated by the Center <strong>for</strong> Biologics<br />

Evaluation and Research) must contain the National Drug Code<br />

(NDC) number in a linear bar code. <strong>The</strong> rule will help reduce the<br />

number of medication errors in hospitals and other healthcare settings<br />

by allowing healthcare professionals to use bar code scanning<br />

equipment to verify the right drug (in the right dose and right route<br />

of administration) is being given to the right patient at the right time<br />

- 103 -


[i.e. insuring the five patient rights]. <strong>The</strong> rule also requires the use<br />

of machine readable in<strong>for</strong>mation on blood and blood component<br />

container labels to help reduce medication errors.” (FR Vol 69(38)<br />

February 26, 2004)<br />

<strong>The</strong> codes required by the final rule (FR Vol 69 (38) February 26, 2004)<br />

are linear bar codes that meet either Uni<strong>for</strong>m Code Council (UCC) standards or<br />

Health Industry Business Communication Council <strong>Standards</strong> (HIBCC). <strong>The</strong> acceptance<br />

of the use of a HIBCC standard was a change from the proposed rule<br />

(March, 2003), which only required “the bar code to be a linear bar code that<br />

meets EAN/UCC standards.” (<strong>The</strong> EAN/UCC are now <strong>GS1</strong> standards) <strong>The</strong> proposed<br />

rule discussed the need to balance the tension “between trying to create a<br />

bar code requirement that would enable hospitals to buy scanning equipment<br />

with the confidence that their purchased equipment would not be rendered obsolete<br />

by new technology and trying to create a bar code requirement that offered<br />

some room <strong>for</strong> technological innovation (68FR 12500 at 12508-12510).<br />

“<strong>The</strong>re are two principal, yet contradictory, themes. One theme advocates<br />

a specific technology or standard to promote uni<strong>for</strong>mity and<br />

to create the conditions under which hospitals could invest confidently<br />

in their bar code scanning equipment. <strong>The</strong> other theme advocates<br />

innovation so that newer and perhaps better technologies<br />

might be adopted easily. Each them has its advantages, disadvantages<br />

and assumptions.” (FR 69(38) February 26, 2004).<br />

Comments regarding other technologies, symbols and standards were invited<br />

by the March, 2003 proposed rule. <strong>The</strong> use of a standardized symbology<br />

was among the hot topics of discussion <strong>for</strong> the final rule document. Although<br />

comments encompassed both sides of the argument (<strong>for</strong> and against the use of<br />

linear bar codes),<br />

“most comments, however, argued against the use of linear bar<br />

codes or asked us to encompass other technologies or to eliminate<br />

any reference to linear bar codes in the final rule. Many comments<br />

claimed that the rule would discourage or inhibit technological inno-<br />

- 104 -


vation, although they differed as to their preferred alternatives to a<br />

linear bar code.” (FR 69(38) February 26, 2004).<br />

<strong>The</strong> comments generally fell into several categories:<br />

• Two dimensional symbologies, because of their ability to excel on<br />

small packages and increased capacity <strong>for</strong> data were recommended<br />

by some. Proponents also indicated that these can be<br />

printed directly onto solid oral dosage <strong>for</strong>ms. Others recommended<br />

them in addition to the use of linear systems.<br />

• <strong>The</strong> use of EAN/UCC (now <strong>GS1</strong>) was supported because of its<br />

wide usage <strong>for</strong> drug products, defined structures and af<strong>for</strong>dability.<br />

• Those opposed to the use of the EAN/UCC system (now <strong>GS1</strong>) indicated<br />

it to be obsolete and some indicated that specifying this particular<br />

symbology created a “monopoly” <strong>for</strong> the UCC.<br />

• <strong>The</strong> use of RFID was advocated by some comments. Issues associated<br />

with electronic pedigree and the fact that it is a non-line of<br />

site technology is points of its appeal.<br />

• Opponents of RFID sited possible issues of electromagnetic interference<br />

(EMI) and less reliable read rates as potential problems associated<br />

with this particular technology.<br />

• No standard symbology was the suggested course of action by<br />

some of the commenters. Advocates of this approach suggested<br />

“open” or “machine readable” requirements that would allow the<br />

market to settle the issue of standardization.”<br />

Others indicated that a standard must be determined, indicating that,<br />

“failure to prescribe a specific technology might deter hospitals and<br />

other potential users from buying scanning or reading equipment<br />

because there would be no assurance that drug manufacturers<br />

would use the same or compatible technologies.” (FR 69(38) February<br />

26, 2004)<br />

After reviewing the comments, the FDA determined that they would retain<br />

the requirement <strong>for</strong> the linear bar codes, but will consider revising the rule as new<br />

technologies come available. <strong>The</strong> decision was based on the fact that linear bar<br />

codes were an established, widely-used, proven technology that are easily recognized,<br />

use and applied. <strong>The</strong> Agency goes on to indicate, that<br />

- 105 -


“Although most comments opposed the proposed linear bar code<br />

requirement, they failed to agree on alternative technologies. For<br />

example, some comments supported two-dimensional codes, particularly<br />

DataMatrix, but others supported radio frequency identification<br />

chips. Some comments endorsed products that a specific<br />

company had created, while others suggested that we simply require<br />

‘automatic identification’ technology. We believe that if the<br />

rule is to result in any significant benefits, it must specify a technology<br />

so that hospitals and other interested parties can purchase the<br />

correct scanning or reading equipment. We do not agree with the<br />

comment that claimed it would be ‘irrational to tailor these requirements<br />

based upon what hospitals may or may not do. <strong>The</strong> rule’s<br />

expected benefits are realized only if hospitals accept and use bar<br />

code technology. <strong>The</strong>re<strong>for</strong>e, we consider it prudent to consider<br />

what hospitals may or may not do when prescribing a regulation<br />

that is intended to benefit hospitals and their patients.” (FR 69(38)<br />

February 26, 2004).<br />

As mentioned, there was also debate and discussion regarding the standardization<br />

organization; the proposed rule indicated UCC codes would be required.<br />

Comments submitted successfully encouraged the Agency to allow <strong>for</strong><br />

the use of HIBCC standards. Included in the discussion was the fact that most<br />

medical device manufacturers that were voluntarily labeling their products use<br />

the UPN system, a system which comprises both the EAN.UCC (now <strong>GS1</strong>) and<br />

HIBCC standards. It was also suggested that HIBCC, which employs an alphanumeric<br />

code “allows <strong>for</strong> literally-encoded in<strong>for</strong>mation that is inherently safer<br />

(than numeric coding alone-[the UCC] ).” (FR69(38) February 26, 2004).<br />

Others successfully argued that EAN.UCC was not a standards body, but<br />

instead had proprietary interests, providing sponsored bar codes to members at<br />

part of an annual fee and that requiring EAN.UCC “would compel manufacturers<br />

to join the UCC even though adequate bar codes are available in the public domain<br />

and declared the rule would violate unnamed Federal laws by referring to<br />

EAN.UCC standards.” (FR 69(38) February 26, 2004).<br />

- 106 -


<strong>The</strong> Agency decided to allow either EAN.UCC (now <strong>GS1</strong>) or HIBCC data<br />

<strong>for</strong>mats, “because HIBCC is a widely-recognized, nonprofit standards development<br />

organization whose standards, like EAN.UCC standards [now <strong>GS1</strong>], are<br />

accredited by ANSI, and, as the comments suggested, allowing the use of either<br />

EAN.UCC [now <strong>GS1</strong>] or HIBCC standards may encourage further development<br />

and adoption of other automatic identification technologies.” <strong>The</strong> Agency did not<br />

take a stance on whether the use of alphanumeric codes is more or less safe<br />

than their numeric counterparts.<br />

Compliance was indicated within 2 years of the final rule’s effective date<br />

of April 26, 2004. Manufacturers, repackers, relabelers and private label distributors<br />

had to comply with the a<strong>for</strong>ementioned provisions, or demonstrate to the<br />

Agency why it was technically implausible <strong>for</strong> them to comply with the imposed<br />

timeframe.<br />

To analyze the costs and the benefits of this regulation, the FDA contracted<br />

with the Eastern Research Group (ERG); who collected data and interviewed<br />

industry experts to estimate the costs and benefits of the proposed rule<br />

(21 CFR 201, 606 and 610). A summary of the findings is shown in Table 17.<br />

- 107 -


Costs and Benefits estimated regarding implementation of the bar code ruling<br />

It is estimated that the rule will help prevent nearly 500,000 ADEs and<br />

transfusion errors over the next 20 years, saving approximately $93 billion in<br />

healthcare costs.<br />

While specifics about the US market may seem narrow with respect to a<br />

global view, this market must be examined and considered since many of the<br />

global suppliers will have to con<strong>for</strong>m to these rules within the United States.<br />

- 108 -


Appendix H- Selected Presentations from <strong>GS1</strong> HUG Conference<br />

on Auto-ID in Berlin, Germany, January 30 –<br />

February 1, 2007<br />

At the conference in Berlin there were over 35 presentations about various<br />

aspects of the implementation of automatic identification <strong>for</strong> healthcare products.<br />

Eight of them were pertinent to the subject as it is presented in this paper. <strong>The</strong>y<br />

emphasize the global nature of the subject, and they illustrate the close<br />

relationship between pharmaceutical and medical device applications of<br />

automatic identification <strong>The</strong>se eight were summarized by Hugh Lockhart, a<br />

member of the research team who was present at the conference.<br />

<strong>The</strong> summaries are presented on the following pages.<br />

Auto ID Data: Hospital Survey – Hoyle and Hay, February 1<br />

“From cow to C.O.W.” – Lenderink, January 31<br />

Optimising the Hospital Pharmaceutical Distribution and<br />

Supplies Process by Automated Identification and<br />

Datatransmission – Meuleman, January 31<br />

Machine-readable marking of the single dose of per<strong>for</strong>ated<br />

tablet-blisters – Kittlaus, January 30<br />

Wanted the GDSN healthcare extension!! – de Vries,<br />

January 31.<br />

Shanghai New Regulation on Medical Devices – Huang,<br />

January 30<br />

RFID in Hospital – Hardy, January 31<br />

EUCOMED (<strong>The</strong> voice of the Medical Technology Industry in<br />

Europe) – Kreuzer, January 31<br />

<strong>The</strong>se and all of the other presentations can be viewed in<br />

their entirety at www.gs1.org/hug/meetings/300107.<br />

- 109 -


Auto ID Data: Hospital Survey<br />

Mark Hoyle and Christian Hay<br />

<strong>The</strong> <strong>GS1</strong> HUG Auto-ID Data Work Team conducted a hospital survey<br />

17 countries 633 hospitals 8 languages<br />

117 respondents 244,000 beds<br />

Australia, Austria, Belgium, Brazil, Croatia, Finland, France, Germany,<br />

Hong Kong, Japan, Netherlands, Spain, Sweden, Switzerland, UK, US.<br />

Below are comments selected from a report of that survey presented at the <strong>GS1</strong><br />

HUG Conference in Berlin, Germany, on February 1, 2007.<br />

<strong>The</strong> hospitals reported on use of Auto ID <strong>for</strong> patient safety and <strong>for</strong> business<br />

needs. <strong>The</strong>re is use of auto ID <strong>for</strong> patient safety; but currently it is used more <strong>for</strong><br />

business applications than <strong>for</strong> patient safety. (See Table 1)<br />

Table 1<br />

Question: Does your area scan any bar codes?<br />

Percent of respondents<br />

Scan and use <strong>for</strong> patient safety 18<br />

Scan but do not use <strong>for</strong> patient safety 23<br />

No, but plan to use 43<br />

No plans <strong>for</strong> future use 17<br />

60 % of respondents report that they now manually record data regarding patient<br />

safety. Compare this with the 18% who scan <strong>for</strong> patient safety, and the 23%<br />

who scan <strong>for</strong> other purposes. <strong>The</strong> intent of the 43% who plan to use bar code<br />

scanning was not specified. Growth in scanning <strong>for</strong> patient safety is inevitable.<br />

<strong>The</strong> survey respondents reported the six data items in Table 2 as data needed<br />

on unit of use and on multiple unit packaging <strong>for</strong> patient safety. An example of a<br />

National Registration Number (item 5 in the list) is the PZN in Germany.<br />

- 110 -


Table 2<br />

Question: What data do you need on product packages <strong>for</strong> patient safety?<br />

(Table entries are in percent of respondents selecting the item)<br />

Drugs<br />

Devices<br />

Data Needed Unit of Use Multiple Unit Unit of Use Multiple Unit<br />

Product ID 68 64 84 78<br />

Serial No 30 25 60 43<br />

Lot or Batch 87 75 86 77<br />

Expiry Date 93 79 95 90<br />

Nat’l Reg No 40 42 28 23<br />

Other 30 36 24 25<br />

Penetration of RFID in these hospitals is limited; only 6% of respondents report<br />

use of RFID <strong>for</strong> capturing data regarding patient safety.<br />

<strong>The</strong> hospital respondents reported the following improvements in patient safety<br />

factors could be made by using automatic identification <strong>for</strong> data capture to replace<br />

manual data entry:<br />

Fewer errors in data capture<br />

Better (more reliable) documentation<br />

Avoid documenting a wrong patient file<br />

Bedside scanning to enhance right product, right patient, right dose, right<br />

route, right time<br />

Can alert <strong>for</strong> allergies, etc<br />

Avoid wrong blood transfusion<br />

Provides more time <strong>for</strong> proactive quality measures<br />

Table 3 summarizes the hospital responses to a series of questions posed in the<br />

survey. In the left column are the reasons why the four most critical items listed<br />

in Table 2 are needed <strong>for</strong> patient safety. In the right column are listed the reasons<br />

why those items must be on a data carrier available <strong>for</strong> integration and interoperability<br />

with other systems. Given this broad range of need and application,<br />

it is clear that standard data codes, methods and procedures are essential<br />

to effective functioning of any healthcare system.<br />

- 111 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Table 3<br />

Reasons <strong>for</strong> Having Four Data Items on Package and Need to Have <strong>The</strong>m in A<br />

Data Carrier<br />

Why the Four Data Items Are Required on Packaging<br />

Why is a product Number required?<br />

Stock management, logistics, re-ordering,<br />

stock picking<br />

Traceability, transparency, data management,<br />

access product<br />

in<strong>for</strong>mation<br />

Avoid errors<br />

Allow stock management at all pack levels<br />

(primary, secondary)<br />

Avoid errors (differentiation by color is not<br />

reliable)<br />

To notify narcotic trade – controlled drug<br />

record keeping<br />

Blood and blood derivatives same as implants<br />

Why is a serial number required?<br />

To trace specific devices (implants) to the<br />

patient<br />

To identify pieces belonging to an equipment<br />

To link reusable devices to sterilization<br />

steps<br />

Stock management, recalls, consignment<br />

To track maintenance of devices<br />

Traceability and link to supplier<br />

Traceability to the patient (biologics and<br />

blood derivatives need<br />

full traceability)<br />

Why is a lot number required?<br />

Traceability, recalls, vigilance, documentation,<br />

accounting<br />

For equipment calibration with reagents<br />

Regulatory requirement<br />

Logistics and stock management<br />

Documentation of patient file<br />

Why the Four Data Items Are Needed on A Data Carrier<br />

Faster processing, including recalls<br />

Reduction of errors<br />

Avoid key entries which avoids error – simpler integration<br />

into data base<br />

Improve reliability of traceability<br />

One scan captures all of the necessary in<strong>for</strong>mation<br />

Faster processes<br />

Greater reliability of stock, accounting, ordering<br />

Improved capture of delivery at ward<br />

Administration to patient, traceability<br />

Last check at bedside of patient<br />

Reduction of medication errors<br />

Support stock management processes (deliveries, picking,<br />

inventory)<br />

Security of drug supply chain, manufacturer to patient<br />

Real standardization would allow effective use of data<br />

with<br />

bar codes (or RFID) in the administration process<br />

Why is the expiration date required?<br />

Patient safety, traceability, security, duration<br />

of sterility<br />

Logistics and stock management<br />

For chemicals and reagents<br />

Regulatory requirement<br />

Stock control at the ward<br />

Overall stock control, especially <strong>for</strong> low<br />

turnover drugs<br />

Manual control of expiration date is a long<br />

task with a high<br />

degree of error risk<br />

Reduce waste of drugs (react be<strong>for</strong>e expiration<br />

date)<br />

112


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

“From cow to C.O.W.”<br />

Bedside Bar code Scanning prevents errors and even deaths<br />

Bertil Lenderink, Director of Pharmacy<br />

Hospital Pharmacy Midden-Brabant, Tilburg, <strong>The</strong> Netherlands<br />

Presented at <strong>GS1</strong> HUG Conference in Berlin, Germany, January 31, 2007<br />

This was an extensive report about hospital systems <strong>for</strong> patient care and patient<br />

safety, including unit dose medications and automatic identification. Following<br />

are items selected from the presentation that are closely related to patient safety<br />

and automatic identification.<br />

From the Tilburg study of 1971, these were at that time causes of medication errors:<br />

Failed communication (55%)<br />

Mistakes by pharmacy or nursing staff (5%)<br />

Failed organization (6%)<br />

And these lead to<br />

Incorrect drug administration (34%)<br />

Not given, unnecessarily given, wrong time, wrong dose<br />

And Mr Lenderink concluded that<br />

“Since that time, 25 years of unit dose systems have diminished the<br />

number of medication errors in some countries tremendously . . . but it is<br />

still possible to further decrease this number by introducing a unit-dose<br />

package containing a bar code (and a pictograph) on the cell which can be<br />

used at the time of administration of the drug.”<br />

Mr Lenderink presented a summary of in<strong>for</strong>mation prepared by EAHP (European<br />

Association of Hospital Pharmacists)<br />

Bar code standards <strong>for</strong> medicaments exist in 43% of EC countries<br />

In another 43% initiatives on standardization are taken<br />

Bar code is used mostly to support the distribution process<br />

Bar code is used mostly on “outer/inner package”<br />

Pictographs are seldom used<br />

<strong>The</strong> use of standard bar codes (automatic identification) is well under way in Europe,<br />

but the bar codes are not yet much used <strong>for</strong> patient safety - - they should<br />

be.<br />

- 113 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Mr Lenderink presented a list of best practice recommendations from the IOM<br />

report.<br />

Pharmacists should participate in patient care rounds<br />

<strong>The</strong>re should be no concentrated medications on wards<br />

Improve voluntary reporting<br />

Use a unit dose system<br />

Check patient identity<br />

Implement computerized prescribing<br />

Use bar coding<br />

All three of the italicized entries are a clear call <strong>for</strong> automatic identification, since<br />

patient identity can be done so quickly and accurately with automatic<br />

identification. Also, because standards <strong>for</strong> automatic identification are so firmly<br />

established it Europe, it is clear that they should continue. <strong>The</strong> standards must<br />

also be internationalized, and so this is a clear call <strong>for</strong> global standards <strong>for</strong> automatic<br />

identification.<br />

Mr Lenderink’s report includes the following findings in the Netherlands:<br />

Less than 50% of medication units are available in unit dose<br />

Less than 50% of unit doses have bar codes<br />

Some CPOE systems cannot use <strong>GS1</strong> DataBar TM<br />

Most af<strong>for</strong>dable scanners cannot read <strong>GS1</strong> DataBar TM or 2D bar codes<br />

As with any technology, as implementation becomes more wide-spread, pricing<br />

becomes more af<strong>for</strong>dable. Tom Brady, of <strong>GS1</strong>, suggests that this is already<br />

happening,<br />

“Considering only hand held or scanners integrated with other<br />

components, both imaging and laser scanners are now commodity<br />

items. .Imaging may still be 10% to 20% above laser scanners, but<br />

the gap is closing fast due to the camera technologies used in digital<br />

cameras and cell phones driving the cost. In volume. <strong>The</strong>se<br />

scanners are as low as $250 - $300. <strong>The</strong>se scanners are used in<br />

retail pharmacies and other end use applications. Both types are<br />

selling as modules to be integrated in other devices <strong>for</strong> well under<br />

$100 in volume. I believe integration of this type has a lot of value<br />

in healthcare as it enables hands free operation.“(Brady 2007)<br />

This is another clear call <strong>for</strong> expansion of the automatic identification<br />

systems, and a clear call <strong>for</strong> standards that will eliminate technology<br />

differences, or provide <strong>for</strong> complete interoperability among them.<br />

Mr Lenderink presented a list of challenges in bar coding (automatic identification):<br />

Only 35% of manufacturers bar code<br />

<strong>The</strong>re is a trend toward fewer unit-dose <strong>for</strong>ms<br />

<strong>The</strong>re is no uni<strong>for</strong>m standard <strong>for</strong> medication bar codes<br />

<strong>The</strong>re is no standard <strong>for</strong> relabeling/in house bar coding<br />

- 114 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

In house repackaging is unreimbursed<br />

No af<strong>for</strong>dable scanners<br />

“Floating” nurses<br />

Patient-specific medications<br />

This list includes another clear call <strong>for</strong> expansion of application of<br />

bar codes, and <strong>for</strong> those bar codes to be designed according to a standard. We<br />

can add, that given today’s globalization of human activity and globalization of<br />

both sourcing and marketing <strong>for</strong> healthcare businesses, global standards are<br />

demanded.<br />

Mr Lenderink issued the following challenge to manufacturers from the hospital<br />

sector of the healthcare supply chain:<br />

“Be a trustworthy and reliable partner (together with clients and users of<br />

your products) in the permanent improvement of medication and patientsafety<br />

by offering bar code labeled unit-doses.”<br />

At the end of his presentation, Mr Lenderink displayed a table that shows one<br />

cost scenario <strong>for</strong> medication errors in a 400 bed hospital. That table is reproduced<br />

here:<br />

Medication Administration<br />

Return on Investment (ROI) Model<br />

400 Bed Hospital<br />

Number of beds 400<br />

Occupancy rate 0.90<br />

Average number of patients 360<br />

Meds per patient 4<br />

Daily dose frequency 4<br />

Meds per day 5,760<br />

365 days/year x 365<br />

Meds admin per year 2,102,400<br />

Error rate (1% - 7%, assume best) 1%<br />

Number of medication errors per year 21,024<br />

Cost per year (assume minor) x $75<br />

Total error cost per year (best case) $1,576,800<br />

This table does not give a return on investment, but it makes very clear the size<br />

of the monetary losses that can occur under best case circumstances in just one<br />

hospital of moderate size. This is a cost to the hospital, of course, but it is also a<br />

cost to society, since in most communities, the hospital cost is recovered from a<br />

social insurance of some kind, or public money used to support the less <strong>for</strong>tunate<br />

members of the community.<br />

- 115 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Optimising the Hospital Pharmaceutical Distribution and Supplies Process<br />

by Automated Identification and Datatransmission<br />

Frankie Meuleman, Pharmacy department, AZ St. Jan Hospital, Brugge Belgium<br />

Presented at GS 1 HUG Conference, Berlin, Germany, January 31, 2007<br />

This is a case <strong>for</strong> the value of having a standard automatic identification in place<br />

in a hospital setting.<br />

St Jan is a general hospital of 909 beds, providing 28,000 treatments a year.<br />

<strong>The</strong> hospital uses bar codes they are inexpensive, they provide rapid identification,<br />

cost reduction and error reduction.<br />

<strong>The</strong> hospital established a bar code workgroup whose target was to choose a bar<br />

code, and standardize hardware<br />

<strong>The</strong> workgroup members were from the pharmacy department, patientadministration,<br />

nursing department, laboratory and software services.<br />

Problems with the then current system were: different article databases, different<br />

coding positions, numeric and alphanumeric coding<br />

When the group looked at a standard code (in this case, EAN-13, now <strong>GS1</strong>-13)<br />

they found that the code allowed unique nation identifiers:<br />

US and Canada France Germany<br />

USSR Taiwan Japan<br />

UK and Ireland Greece Belgium<br />

Netherlands<br />

In-store numbers in their own hospital<br />

In addition, the coding system allowed <strong>for</strong> a variety of structures internal to the<br />

hospital. <strong>The</strong>se structures allow <strong>for</strong> the use of prefixes to identify articles, persons,<br />

patients (using a patient number), activities, and places in the hospital<br />

(ward, room, room+bed, physical location.<br />

<strong>The</strong> result was: A unique article code, external and internal codes, and the ability<br />

to incorporate the system in Code-128<br />

<strong>The</strong> work group chose to use EAN-13 (now <strong>GS1</strong>-13), a standard code that allowed<br />

compatibility with Code 39 and Code-128.<br />

<strong>The</strong> choice allowed the hospital to change from manual data entry to scanning<br />

data into the computer.<br />

- 116 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong> standard code chosen enabled:<br />

use of a prefix <strong>for</strong> in-store identity<br />

hospital identification<br />

sequential numbering<br />

batch registration<br />

traceability through multiple codes such as EAN-128 (now <strong>GS1</strong>-128) and<br />

HIBC<br />

elimination of errors by using bedside registration by scanning be<strong>for</strong>e<br />

admission<br />

electronic prescription using integrated software, web base and wireless<br />

network<br />

<strong>The</strong> conclusion, Mr Meuleman said, is that “Bar code increases the quality of data<br />

transmission if coding in unique and international and if the applications are<br />

generalized in the hospital”. Embedded in the evidence presented by Mr<br />

Meuleman is the fact that the coding chosen is a global standard, which enhances<br />

the applicability of the findings of the hospital.<br />

<strong>The</strong> last Power Point slide in this presentation says:<br />

“No Bar code, No Business”<br />

This is a very powerful statement if taken in either of two ways of interpreting it:<br />

1. If there is no bar code on the product (package) this hospital will not<br />

buy from you. <strong>The</strong> business portion of the healthcare supply chain.<br />

OR<br />

2. If there is no bar code on the product (package) the healthcare system<br />

cannot adequately serve patient needs. <strong>The</strong> patient safety portion of<br />

the healthcare supply chain.<br />

Probably in the minds of most of us, both interpretations are appropriate<br />

- 117 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Machine-readable marking of the single dose of per<strong>for</strong>ated tablet-blisters<br />

Dr Werner Kittlaus, ADKA Verpackungsausschuss<br />

GS 1 HUG Conference, Berlin, Germany, 30 January, 2007<br />

<strong>The</strong> German Association of Hospital Pharmacists (ADKA) and the European Association<br />

of Hospital Pharmacists (EAHP) have together requested the production<br />

of single dose units of medications.<br />

Dr Kittlaus presented the following statement from EAHP:<br />

To improve patient safety in drug therapy and to ensure the highest quality<br />

in medical treatment in European hospitals, the General Assembly of the<br />

European Association of Hospitals demands:<br />

<strong>The</strong> production of single dose packed drugs from the pharmaceutical<br />

industry<br />

<strong>The</strong> mandatory inclusion of a bar code on each single dose<br />

<strong>The</strong> problem is that per<strong>for</strong>ated multi-dose blister packs lack complete<br />

in<strong>for</strong>mation on every dividable single part. If the oral medication <strong>for</strong> a<br />

single patient is prepared on the ward by dividing multi-dose blister packs,<br />

a portion of the unique identification is lost.<br />

<strong>The</strong> pharmacists need the substance name, the brand name, the dosage,<br />

the application <strong>for</strong>m [sic], and, perhaps, manufacturer with logo.<br />

<strong>The</strong> pharmacists also need a machine readable code in case of checking<br />

the prepared medication with the electronic prescription,<br />

European pharmacists expect to use electronic prescriptions<br />

against which they can check medications to be administered.<br />

<strong>The</strong> need <strong>for</strong> global standard automatic identification is obvious<br />

if the encodation is to extend to prescription writing.<br />

ADKA advocates also <strong>for</strong> bar-coding single doses with variable data so that the<br />

coding system will identify every dose, package and bundle. Under the constraints<br />

given here and elsewhere, there is not enough space on unit dose packages<br />

<strong>for</strong> one-dimensional codes.<br />

<strong>The</strong>re<strong>for</strong>e, the European pharmacists tell us, they will use twodimensional<br />

codes. <strong>The</strong>y suggest that, from their point of view, <strong>GS1</strong>-<br />

128 and <strong>GS1</strong> Datamatrix are both good standards.<br />

- 118 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong>re can be no question; given the current activity in application of auto-ID<br />

codes, global standards are essential to patient safety in auto-ID. In fact, Dr Kittlaus<br />

calls <strong>for</strong> global standards at the end of his presentation when he says,<br />

“We must handle the variable data down to the patient level”<br />

and<br />

“<strong>The</strong> whole coding system has to be open and accessible to the software<br />

houses”<br />

and<br />

“We need obligatory consensus on the European level.”<br />

- 119 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Wanted: the GDSN healthcare extension!!<br />

Hein Gorter de Vries and Friso van Weelden<br />

<strong>The</strong> Netherlands Calls <strong>for</strong> <strong>Global</strong> <strong>Standards</strong> <strong>for</strong> Automatic Identification<br />

Presented on January 31, 2007, at the Berlin Conference of <strong>GS1</strong> HUG,<br />

<strong>The</strong> authors presented a position statement from the Netherlands Association <strong>for</strong><br />

the Advancement of Pharmacy. A summary of the presentation follows:<br />

<strong>The</strong> Association <strong>for</strong> the Advancement of Pharmacy (KNMP) in the Netherlands<br />

calls <strong>for</strong> the adoption of a global standard <strong>for</strong> automatic identification. In the late<br />

1970’s the association created a data base which they call the “G-standard”.<br />

This standard is used in a supply chain in the Netherlands which is described by<br />

KNMP as follows:<br />

600 – 800 Manufacturers and Importers<br />

4 Wholesalers<br />

50 Health Insurers<br />

1700 Public Pharmacies<br />

80 Hospital Pharmacies<br />

32,500 Doctors<br />

All serving<br />

16,000,000 Patients<br />

With<br />

80,000 Medical Products (Rx, OTC drugs, medical devices and<br />

homeopathic products)<br />

KNMP created ZorgDAS (Data Alignment in Healthcare) <strong>for</strong> the following purposes:<br />

To stimulate use of a standard automatic identification system (<strong>GS1</strong>)<br />

To organize data synchronization of logistical data (business data)<br />

To organize reliable linkage between logistical (business) data and<br />

medical (patient safety) data<br />

All associations of manufacturers, importers, wholesalers, hospitals and<br />

pharmacists participate<br />

Use of the standard automatic identification chosen by ZorgDAS has<br />

Reduced the number of different coding systems<br />

Enabled implementation of electronic business messages<br />

Provided linkages of the national pharma data base with the business data<br />

base, providing <strong>for</strong> the addition of patient safety to the business<br />

communications<br />

As a result of this experience, ZorgDAS and KNMP have concluded that<br />

A global standard is needed to facilitate the international exchange of<br />

medical data among pharmaceutical manufacturers, wholesalers and<br />

medical professionals (doctors and pharmacists).<br />

- 120 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

A global standard is required to facilitate the global distribution of medicines.<br />

This standard must allow the definition of medical to become compliant<br />

with a standard numbering system (KNMP chooses <strong>GS1</strong>’s GDSN).<br />

Once implemented, this global standard will be the basis <strong>for</strong> improvement<br />

of the quality and efficiency of the medical supply chain and of care provided<br />

to patients (KNMP chooses GS 1 GDSN).<br />

- 121 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Shanghai New Regulation on Medical Devices<br />

Zexia Huang, <strong>GS1</strong> China<br />

Presented at <strong>GS1</strong> HUG Conference in Berlin, January 30, 2007<br />

In China, the main regulator on food, pharmaceuticals and medical devices is the<br />

State Food and Drug Administration (SFDA); the Ministry of Health (MoH) serves<br />

the demand side, mainly hospitals.<br />

<strong>The</strong> Shanghai regulation on medical devices was put in place to<br />

Strengthen management of production, operation and usage of implants<br />

Fight against illegal production, sale and use of fake and bad quality<br />

medical devices<br />

restrict business bribery linked with purchasing and marketing<br />

<strong>The</strong> enabling document is Shanghai FDA (2006) No 751 “Opinions on Further<br />

Strengthening Management on Implantable Medical Devices in Shanghai”. It<br />

was issued on November 7, 2006; effective on January 1 2007 <strong>for</strong> implant manufacturers<br />

and operators; effective April 1, 2007 <strong>for</strong> medical institutions.<br />

<strong>The</strong> purpose is to build up a tracking and tracing system <strong>for</strong> implants of all<br />

kinds. Implants on the market should have a unique identification <strong>for</strong><br />

tracking and tracing, and the manufacturer should provide basic product<br />

in<strong>for</strong>mation to their dealers and to medical institutions.<br />

Tracking in<strong>for</strong>mation should include<br />

Product characteristics code<br />

Product tracing code<br />

Manufacturer name and place of business<br />

Product name, type, expiry date, production date and quantity<br />

SFDA license No and expiry date<br />

<strong>The</strong> SFDA strongly recommends that bar code technologies be<br />

used<br />

China has already committed to one global standard code; GTIN 14 is mandatory<br />

as a Product Characteristic Code and a batch or lot number or serial number is<br />

mandatory as a Product Tracing Code<br />

Currently, 12,000 Chinese healthcare companies are using GTIN Allocation<br />

Rules.<br />

- 122 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong> conclusions of this paper make six points. In China;<br />

Implants in Shanghai must have one unique code as a tracking indicator.<br />

GTIN and batch/lot number (or serial number) are mandatory<br />

<strong>GS1</strong>–128 should be applied and is highly recommended to be printed in<br />

two separate lines<br />

Manufacturers, operators, and medical institutions should create tracking<br />

and tracing systems<br />

Manufacturers should update their own patient/product tracking data base<br />

and provide related in<strong>for</strong>mation to the government regularly.<br />

Tracking methods should be documented<br />

Manufacturers should provide tracking in<strong>for</strong>mation to their hospitals or<br />

dealers<br />

<strong>The</strong> regulation stating these rules was put into practice as of January 1,<br />

2007 <strong>for</strong> manufacturers and as of April 1, 2007 <strong>for</strong> hospitals in<br />

Shanghai<br />

- 123 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

RFID in Hospital<br />

India Hardy, Chelsea and Westminster Hospital, London, UK<br />

Presentation at <strong>GS1</strong> HUG Conference in Berlin, January 31, 2007<br />

<strong>The</strong> hospital operates an electronic system of intra-hospital communication which<br />

incorporates and integrates:<br />

electronic patient records<br />

electronic prescription writing<br />

electronic pharmacist verification<br />

robot picking of prescription orders<br />

nurse charting<br />

bedside identification of the patient<br />

<strong>The</strong> hospital has chosen to use RFID in the process. Communication using<br />

standard codes <strong>for</strong> automatic identification is an integral part of the electronic<br />

system.<br />

<strong>The</strong> hospital reports that its association with a standard code system support organization<br />

enables them to:<br />

Best preserve the 5 rights of the patient<br />

Assure authenticity<br />

Achieve traceablity<br />

Interface with manufacturers, wholesalers and other hospitals<br />

Carry out process planning, horizon scanning, workflow design and project<br />

direction<br />

- 124 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

EUCOMED (<strong>The</strong> voice of the Medical Technology Industry in Europe)<br />

Mike Kreuzer, Chairman ETF and Janice Kite<br />

Presented at GS 1 HUG Conference in Berlin, Germany, January 31, 2007<br />

In October and November, 2006, EUCOMED (<strong>The</strong> European Medical Technology<br />

Industry Association) conducted a European survey of stakeholders in the<br />

healthcare industry. Most were medical device manufacturers; also included<br />

were regulators, trade associations, healthcare providers, pharma manufacturers<br />

and distributors of medical devices.<br />

Results were obtained from 210 surveys from at least 19 countries, including <strong>The</strong><br />

Netherlands, France, Norway, Romania, Russia and Spain. <strong>The</strong> survey was<br />

prepared and answered in five languages; French, German, Italian, Spanish and<br />

English.<br />

According to the respondents, six Auto-ID standards are in use; HIBC, <strong>GS1</strong>-128<br />

and 13, 2 D, 3 of 9 and some proprietary codes. Only 9% of the respondents reported<br />

that they do not use any code. <strong>The</strong> <strong>GS1</strong> codes are used by 39% of the<br />

respondents, and HIBC is used by 19%. Both HIBCC and <strong>GS1</strong> codes are used<br />

by 20% (42) of the respondents. <strong>The</strong> responses indicate that use of the HIBCC<br />

code is mainly the result of insistence by U.S. oriented entities.<br />

<strong>The</strong> survey also asked the respondents if they planned to stay with the standard<br />

they were using at the time of the survey (i.e. is there a movement toward standardizing<br />

on one of the code systems?). <strong>The</strong> response was mixed: 33 respondents<br />

(16% of the 33) indicated that they would change. Of those 33, 18 (55%)<br />

that they would change to a <strong>GS1</strong> code, none would change to a HIBCC code and<br />

12 (36%) said they did not know.<br />

<strong>The</strong> survey seems to indicate that the industry is using automatic identification<br />

codes and that the users want to, and will, standardize on a single code (or a few<br />

codes). Implicit in the responses is the idea that the preponderance of sentiment<br />

is in favor of a single code, the <strong>GS1</strong> codes, with the second place code system<br />

being driven by the U.S.<br />

- 125 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Contact<br />

Laura Bix, PhD<br />

Assistant Professor<br />

Michigan State University<br />

School of Packaging<br />

153 Packaging<br />

East Lansing, MI 48824<br />

517-355-4556<br />

bixlaura@msu.edu<br />

Robb Clarke, PhD<br />

Associate Professor<br />

Michigan State University<br />

School of Packaging<br />

151 Packaging<br />

East Lansing, MI 48824<br />

517-355-7613<br />

clarker@msu.edu<br />

Diana Twede, PhD<br />

Professor<br />

Michigan State University<br />

School of Packaging<br />

147 Packaging Building<br />

East Lansing, MI 48824<br />

517-353-3869<br />

twede@msu.edu<br />

Hugh Lockhart, PhD<br />

Professor<br />

Michigan State University<br />

School of Packaging<br />

155 Packaging<br />

East Lansing, MI 48824<br />

517-355-3604<br />

lckhrt@msu.edu<br />

John Spink, MS, CPP<br />

Michigan State University<br />

School of Packaging<br />

517-381-4491<br />

spinkj@msu.edu<br />

- 126 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Acknowledgements<br />

This report has been in the works <strong>for</strong> quite a long time. It could not have been<br />

completed without the help and dedication of a lot of people at the School of<br />

Packaging.<br />

<strong>The</strong> authors also wish to acknowledge the tremendous contribution of the interdisciplinary<br />

team of student researchers that reviewed the literature, providing<br />

insights <strong>for</strong> this document.<br />

Leslie Behm,<br />

Sarah Buelow,<br />

Gaurav Dabholkar,<br />

Monique Edwards,<br />

Reed Eppelheimer,<br />

Katie Fox,<br />

Amit Gadhavi,<br />

Charles Groover,<br />

Kara Gust,<br />

Laura Jaeger,<br />

Shantanu Kelkar,<br />

Ji Yeon Lee,<br />

Scott Merriman,<br />

Jason Robb,<br />

Craig Roehl,<br />

John Severin,<br />

Audrey Whaling,<br />

Caleb Wojcik, and<br />

Wenle Zhang.<br />

- 127 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

References<br />

AAIPM and CIPR (2002). Action Plan to Fight Counterfeit Medicines in Russia: 1-<br />

12.<br />

AdvaMed (2004). Automatic identification in the medical device supply chain. A<br />

survey report. Washington (DC), AdvaMed: 44 p.<br />

AIM. (2007). Retrieved May 31, from http://www.aimglobal.org/technologies.<br />

AIM. (2007). from http://www.aimglobal.org/technologies/barcode.<br />

AIPM and CIPR (2002). Action Plan to Fight Counterfeit Medicines in Russia: 1-<br />

12.<br />

Akiyama, M. and T. Kondo (2007). "Risk Management and Measuring Productivity<br />

with POAS - Point of Act System." Medinfo.<br />

Akunyili, D. (2006). Strategies Employed in Combating Drug Counterfeiting in Nigeria.<br />

World Health Organisation (WHO) in Collaboration with the Italian<br />

Medicines Agency (AIFA) and the International Federation of Pharmaceutical<br />

Manufacturers and Associations (IFPMA). Rome, Italy.<br />

Aldhous, P. (2005). "Murder by Medicine." Nature 434: 132-136.<br />

American Hospital Association (2007). Continued Progress, Hospital Use of In<strong>for</strong>mation<br />

Technology 2007.<br />

Anderson, B. (2007). Improving Medication Safety: Bedside Verification, District<br />

Health Board.<br />

Anderson, B. (2007). Improving Medication Safety: Bedside Verification: Cost<br />

Utility Analysis.<br />

Anonymous. "Successful Aegate Pharma Pilot Demonstrates Potential to Improve<br />

Patient Safety." 2007, from<br />

http://www.cambridgenetwork.co.uk/news/article/default.aspx?objid=1067<br />

5.<br />

Anonymous (2004). Parallel Trade in Medicines: Results of a Social Market<br />

Foundation, Social Market Foundation: 19.<br />

Anonymous (2005). National Trade Estimate Report on Foreign Trade Barriers.<br />

Russia. Washington, Office of the United States Trade Representative:<br />

549-563.<br />

Anonymous (2006). Results of Bilateral Negotiations on Russia's Accession<br />

to the World Trade Organization (WTO)<br />

Action on Critical IPR Issues. Washington, DC, Office of the United States Trade<br />

Representative.<br />

Anonymous. (2006). "RFID and UHF: A Prescription <strong>for</strong> RFID Success in the<br />

Pharmaceutical Industry." from<br />

http://www.pharmaceuticalonline.com/uhg/RFIDUHAPresciption<strong>for</strong>RFIDSu<br />

ccess.pdf.<br />

Anonymous (2006). Trick or Treat? Opportunities <strong>for</strong> European Action on Health<br />

Improvement, Pharmaceutical Innovation and the Threat of Medicines<br />

Counterfeiting. London, <strong>The</strong> School of Pharmacy University of London.<br />

- 128 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Anonymous (2007) "WHO Launches Nine Patient Safety Solutions- Solutions to<br />

Prevent Health Care-related Harm." Medical News Today Volume, DOI:<br />

Appleby, J. (2005). Stolen, Counterfeit Drug Problems Rise. USA Today.<br />

Aspden, P., J. Wolcott, et al. (2006). Preventing Medication Errors: Quality<br />

Chasm Series. Washington, DC, <strong>The</strong> National Academies, Institute of<br />

Medicine.<br />

Bacheldor, B. (2007a). Belgium Hospital Combines RFID, Sensors to Monitor<br />

Heart Patients. RFID Journal,.<br />

Bacheldor, B. (2007b). Providence Health Center Calls Its RFID System an ‘Eye-<br />

Opener’. RFID Journal,.<br />

Bacheldor, B. (2007c). Taiwan’s Chang-Gung Hospital Uses HF RFID to Track<br />

Surgery. RFID Journal,.<br />

Bacheldor, B. (2007d). At Mayo Clinic, RFDI Tracks Biopsies. RFID Journal.<br />

Barker, K. N., E. A. Flynn, et al. (2002). "Medication Errors Observed in 36<br />

Health Care Facilities." Archives of Internal Medicine 162(16): 1897-1903.<br />

Barua, A., D. Mani, et al. (2006, January 3, 2007). "Assessing the Financial Impacts<br />

of RFID Technologies on the Retail and Healthcare Sectors." from<br />

www.463.com/clients/NXP/nxp_rfid_study.pdf.<br />

Bates, D. W., D. J. Cullen, et al. (1995). "Incidence of adverse drug events and<br />

potential adverse drug events. Implications <strong>for</strong> prevention. ADE Prevention<br />

Study Group." JAMA 274(1): 29-34.<br />

Bernstein, I. B. G. (2006). Impact of the PDMA on the Pharmaceutical Supply<br />

Chain, U.S. Food and Drug Administration. NACDS/HDMA RFID Adoption<br />

Summit. Washington, D.C.<br />

Bio (2004). Testimony of the Biotechnology Industry Organization be<strong>for</strong>e the<br />

Committee on Health, Education, Labor and Pensions of the United<br />

States.<br />

Bogdanich, W. and J. Hooker (2007). From China to Panama, a Trail of Poisoned<br />

Medicine New York Times. New York.<br />

Brady, T. (2007). Email regarding scanner Pricing. U. Kreysa.<br />

Burns, L. R. (2002). <strong>The</strong> Health Care Value Chain. San Francisco, CA, Jossey-<br />

Boss.<br />

Burns, L. R. (2002). <strong>The</strong> Health Care Value Chain: Producers, Purchasers and<br />

Providers, San Francisco: Jossey-Bass.<br />

CCTV.com. (2007, 4/2/2007). "UK Bar Codes Reduce Hospital Errors." from<br />

http://www.cctv.com/english/20070403/102822.shtml.<br />

Celia, F. (2006). States Move to Comply with Drug Pedigree Laws. Drug Topics.<br />

CEN (2000). Final draft of CEN Report: Health In<strong>for</strong>matics – Safety procedures<br />

<strong>for</strong> identification of patients and related objects, Committee 251 on European<br />

Standardization of Health In<strong>for</strong>matics.<br />

Chappell, G., L. Ginsburg, et al. (2002). "Auto-ID on Demand: <strong>The</strong> Value of Auto<br />

ID Technology in Consumer Packaged Goods Demand Planning." Retrieved<br />

January 6, 2007, 2007, from<br />

http://www.accenture.com/xdoc/en/industries/products/cgs/insights/autoid<br />

_demand.pdf.<br />

Clarke and Falls (2006). "Methods and Apparatus <strong>for</strong> RFID Hotspot Testing."<br />

Journal of Applied Packaging Research 1(2): 55-90.<br />

- 129 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Clarke, Twede, et al. (2005). "Radio Frequency Identification Per<strong>for</strong>mance: <strong>The</strong><br />

Effect of Tag Orientation and Package Contents." Packaging Technology<br />

& Science 19(1): 45-54, by Robb Clarke, Diana Twede, Jeff Tazelaar and<br />

Kenneth K. Boyer.<br />

Clarke, Twede, et al. (2006). "RFID in the Supply Chain: Separating Fact from<br />

Fiction." Supply Chain Strategy, a newsletter from Harvard Business<br />

School Publishing: 9-10, by Robb Clarke, Diana Twede, Jeff Tazelaar and<br />

Kenneth K. Boyer.<br />

Coleman, N. (2004). Statement of Norm Coleman Senate Committee on Governmental<br />

Affairs Buyer Beware: <strong>The</strong> Danger of Purchasing Pharmaceuticals<br />

Over the Internet. June 17.<br />

Conlon, M. (2001). "How Safe is the Drug Supply?" Drug Topics.<br />

Davis, P., R. Lay-Yee, et al. (2001). Adverse Events in New Zealand Public Hospitals:<br />

Principal Findings from a National Survey (Occasional Paper No.<br />

3). Wellington, Ministry of Health.<br />

De Vries, H. G. (2007). Wanted: the GDSN healthcare extension !! GS 1 Conference.<br />

Berlin, Germany.<br />

Dempsey (2004). US Department of Health and Human Services Task Force on<br />

Drug Importation Transcript.<br />

Department of Health (2007). Coding <strong>for</strong> Success: Simple Technology <strong>for</strong> Safer<br />

Patient Care. London.<br />

DeScioli, D. (2005). Differentiating the Hospital Supply Chain <strong>for</strong> Enhanced Per<strong>for</strong>mance.<br />

Logistics, Massachusetts Institute of Technology. Masters: 56.<br />

Dondrop, A., P. Newton, et al. (2004). "Fake antimalarials in Southeast Asia are<br />

a major impediment to malarial control: Multinational cross-sectional survey<br />

on the prevalence of fake antimalarials." Tropical Medicine and International<br />

Health 9(12): 1241-1246.<br />

Eban, K. (2005). Dangerous doses : how counterfeiters are contaminating America's<br />

drug supply. Orlando, Harcourt.<br />

ECRI (2004). "Bar-coded medication labeling: setting the stage <strong>for</strong> bar-codeenabled<br />

point-of-care systems." Health Devices 2005 33(9): 331-4.<br />

ECRI (2005). Task 4 White Paper - Automatic Identification of Medical Devices -<br />

Final Version P. f. t. F. C. f. D. a. R. Health. Rockville, MD, US Food and<br />

Drug Administration.<br />

ECRI (2005a). Task 4 White Paper - Automatic Identification of Medical Devices -<br />

Final Version: August 17, 2005 (FDA Contract 223-04-6051, Plymouth<br />

Meeting, PA).<br />

ECRI (2005b). "Guidance article: radiofrequency identification devices." Health<br />

Devices 2005 34(5): 149-59.<br />

Engels, D. W. (2006). Drug Pedigree and RFID in the Pharmaceutical Supply<br />

Chain: A Recommendation to the FDA. FDA RFID Workshop. Washington,<br />

D.C.<br />

ERG (2006). Unique Identification <strong>for</strong> Medical Devices, Final Report. Lexington,<br />

MA, Eastern Research Group Inc.<br />

Erhun, W., O. Babalola, et al. (2001). "Drug Regulation and Control in Nigeria:<br />

<strong>The</strong> Challenge of Counterfeit Drugs." Journal of Health & Population in<br />

Developing Countries 4(2): 23-34<br />

- 130 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Euromonitor International and the <strong>Global</strong> Marketing In<strong>for</strong>mation Database (2006).<br />

OTC Healthcare- World.<br />

Farley, D. (1990). "Counterfeit pills buy prison time- Lantor Corp. sells phony<br />

Ovulen-21." FDA Consumer Magazine.<br />

FDA, F. a. D. A. (2003). Bar Code Label Requirement <strong>for</strong> Human Drug Products<br />

and Blood. F. a. D. Administration. 21 CFR Parts 201, 606 and 610.<br />

Federick, J. (2005). Counterfeiting Has States Looking Down Paper Trail. Drug<br />

Store News. August 22, 2005.<br />

Field, M. and H. Tilson (2005). Safe Medical Devices <strong>for</strong> Children, Prepublication<br />

copy of the Institute of Medicine of the National Academies. .<br />

Food and Drug Administration (2003). Barcode Label <strong>for</strong> Human Drugs and<br />

Blood: Proposed Rule, Federal Register. 68: 12499-12534.<br />

Food and Drug Administration. (2005, May 18, 2005). "Combating Counterfeit<br />

Drugs: A Report of the Food and Drug Administration Annual Update."<br />

Retrieved August 27, 2007, from<br />

http://www.fda.gov/oc/initiatives/counterfeit/update2005.html.<br />

Food and Drug Administration. (2007, May 1, 2007). "FDA Warns Consumers<br />

about Counterfeit Drugs from Multiple Internet Sellers." Retrieved August<br />

27, 2007, from<br />

http://www.fda.gov/bbs/topics/NEWS/2007/NEW01623.html.<br />

Forzley, M. (2003). Counterfeit Goods and the Public's Health and Safety. Washington,<br />

DC, International Intellectual Property Institute<br />

United States Patent and Trademark Office.<br />

Frost and Sullivan. (2005). "World RFID-based in Healthcare and Pharmaceutical<br />

Markets." from http://www.frost.com/prod/servlet/report-<br />

homepage.pag?repid=F548-01-00-00-<br />

00&ctxst=FcmCtx1&ctxht=FcmCtx2&ctxhl=FcmCtx3&ctxixpLink=FcmCtx4<br />

&ctxixpLabel=FcmCtx5.<br />

Gansladt, M. and K. Maskus (2004). Parallel Imports and the Pricing of Pharmaceutical<br />

Products:<br />

Evidence from the European Union. Stockholm, Sweden, IUI, <strong>The</strong> Research Institute<br />

of Industrial Economics.<br />

Gottlieb, S. (2006). Speech. Parenteral Drug Association’s Pharmaceutical Counterfeiting<br />

Conference Food and Drug Administration.<br />

Gurwitz, J. H., T. S. Field, et al. (2000). "Incidence and preventability of adverse<br />

drug events in nursing homes." Am J Med 109(2): 87-94.<br />

Gutierrez, D. (2007, March 30, 2007). "Human Pharmacists Replaced by Robot<br />

in UK Hospital." 2007, from http://www.newstarget.com/021758.html.<br />

Hardy, I. (2007). RFID in Hospital. GS 1 HUG Conference. Berlin, Germany.<br />

Haw, C., G. Dickens, et al. (2005). "A Review of Medication Administration Errors<br />

Reported in a Large Psychiatric Hospital in the United Kingdom." American<br />

Psychiatric Assocatiation 56: 1610-1613.<br />

HDMA, H. D. M. A. (2004). Medication Errors and Patient Safety: <strong>The</strong> Bar Code<br />

Connection. Reston, VA, HDMA.<br />

Healthcare Distribution Management Association (2004). Adopting EPC in<br />

Healthcare: Cost & Benefits. Reston VA, Healthcare Distribution Management<br />

Association, HDMA Healthcare Foundation.<br />

- 131 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Healthcare Distribution Management Association (2004). "Annual Economic<br />

Benifits of EPC/RFID Total 1.8 Billion <strong>for</strong> Pharmaceutical Manufacturers,<br />

Distributors."<br />

Healthcare Distribution Management Association (2004). Medication Errors and<br />

Patient Safety: <strong>The</strong> Bar Code Connection. Reston, VA, HDMA.<br />

Healthcare Distribution Management Association. (2007). "Position Statement:<br />

Recommended Utillization of Electronic Product Codes in Healthcare Distribution."<br />

from<br />

http://www.healthcaredistribution.org/position_statements/electronic_prod<br />

uct.asp.<br />

HIMSS (2003). Implementation guide <strong>for</strong> the use of bar code technology in<br />

healthcare. Chicago (IL), Health In<strong>for</strong>mation and Management Systems<br />

Society: 72 p. .<br />

Hoyle, M. and C. Hay (2007). Auto-ID Data: Hospital Survey. <strong>GS1</strong> HUG Meeting<br />

Berlin, Germany.<br />

Hu, P. a. B. G. (2005, May 20th, 2005). "Public Safety Jeopardized by Chinese<br />

Counterfeiters, Experts Say Fake Pharmaceuticals Contradict Notion of<br />

"Victimless" Crime." ", from<br />

http://usinfo.state.gov/eap/Archive/2005/May/20-45620.html.<br />

Huang, Z. (2007). Shanghai New Regulation on Medical Devices. GS 1 HUG<br />

Conference. Berlin, Germany.<br />

Institute of Medicine of the National Academies (2006). Preventing Medication<br />

Errors- Prepublication Copy. Washington, DC, <strong>The</strong> National Academies<br />

Press.<br />

Jack, A. (2007). Schizophrenia fake medicine alert. Financial Times.<br />

Johnson, C., Russell Carlson, et al. (2002). "Using BCMA Software to Improve<br />

Patient Safety in Vetrans Administration Hospitals." Journal of Helathcare<br />

In<strong>for</strong>mation Management 16(1): 46-51.<br />

Kanavos, P., J. Costa-i-Font, et al. (2004). <strong>The</strong> Economic Impact of Pharmaceutical<br />

Parallel Trade in European Union Member States: A Stakeholder<br />

Analysis, LSE Health and Social Care<br />

London School of Economics and Political Science.<br />

Kapoor, B. (2000). "Automatic product identification: bar code technology."<br />

Packag. India 33(1): 51-53, 55-57.<br />

Kaushal, R., A. K. Jha, et al. (2006). "Return on investment <strong>for</strong> a computerized<br />

physician order entry system." J Am Med In<strong>for</strong>m Assoc 13(3): 261-6.<br />

Kimura, K., M. Nishizawa, et al. (1999). "Guidelines <strong>for</strong> the development of<br />

measures to combat counterfeit drugs." Retrieved May 31, 2007, from<br />

http://www.who.int/medicines/library/docseng_from_a_to_z.shtml.<br />

Kittlaus, W., Dr. (2007). Machine-readable marking of the single dose of per<strong>for</strong>ated<br />

tablet-blisters. GS 1 HUG Conference. Berlin Germany.<br />

Kramer, A. (2006). Drug Piracy: A Wave of Counterfeit Medicines Washes Over<br />

Russia. New York Times. New York.<br />

Kreuzer, M. (2007). Eucomed (<strong>The</strong> Voice of the Medical Technology Industry in<br />

Europe). GS 1 Conference. Berlin Germany.<br />

Lara, L. S. (2005). "<strong>The</strong> Supply Chain Side of the Story." World Trade 18(10): 30.<br />

Leape, L., D. W. Bates, et al. (1995). "Systems Analysis of Adverse Drug<br />

Events." Journal of the American Medical Association. 274(1): 35-43.<br />

- 132 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Lenderink, B. (2007). From cow to C.O.W., Bedside Barcode Scanning prevents<br />

errors and even deaths, Hospital Pharmacy Midden-Brabant. <strong>GS1</strong>/ HUG<br />

Meeting. Berlin, <strong>GS1</strong>.<br />

Lesar, T. S., L. Briceland, et al. (1997). "Factors related to errors in medication<br />

prescribing." Journal of the American Medical Association. 277(4): 312-<br />

317.<br />

Lionel, R. (2002). "Pharmaceutical industry - Wholesale & distribution." Logistics<br />

and Transport Focus 4(4): 36.<br />

Lutter, R. (2005). Counterfeit Drug Problems. <strong>The</strong> NACDS/HDMA RFID Healthcare<br />

Adoption Summit.<br />

Maksimova, L. (2002). VAT on Pharmaceuticals and Medical Equipment in Russia,<br />

US and Foreign Commercial Service and US Department of State.<br />

Maviglia, S., J. Yoo, et al. (2007). "Cost-Benefit Analysis of a Hospital Pharmacy<br />

Bar Code Solution." Archives of Internal Medicine 167: 788-794.<br />

Meadows, M. (2003). "Strategies to Reduce Medication Errors." FDA Consumer<br />

Magazine 37(3).<br />

Meuleman, F. (2007). Optimising the Hospital Pharmaceutical Distribution and<br />

Supplies Process by Automated Identification and Datatransmission. GS 1<br />

HUG Conference. Berlin, Germany.<br />

MHRA. (2006, December 19, 2006). "MDA/2006/072- Counterfeit Condoms:<br />

Durex Fetherlite 3 pack lot 21405074, Durex per<strong>for</strong>ma 3 pack lot<br />

TGL4142, Durex gossamer 3 pack lot 21405074." Retrieved August 27,<br />

2007, from<br />

http://www.mhra.gov.uk/home/idcplg?IdcService=SS_GET_PAGE&useSe<br />

condary=true&ssDocName=CON2025535&ssTargetNodeId=365.<br />

Morais, R. C. (2004). "Pssst ... Wanna Buy Some Augmentin?" Forbes.com, Forbes<br />

2000 Section.<br />

Mudur, G. (2003). "India to introduce death penalty <strong>for</strong> peddling fake drugs." BMJ<br />

327(414): 412-414.<br />

Nathan, J. and J. Trinkaus (1996). "Improving health care means spending more<br />

time with patients and less time with inventory." Hospital Material Management<br />

Quarterly 18(2): 66-68.<br />

National Coordinating Council <strong>for</strong> Medication Error Reporting and Prevention.<br />

"About Medication Errors: What is a Medication Error." Retrieved May<br />

31, 2007, from http://www.nccmerp.org/aboutMedErrors.html.<br />

Navas, D. (2006). "Supply Chain Technology Comes to Healthcare " Supply<br />

Chain Manufacturing and Logistics(March 7, 2006).<br />

Newton, P., S. Proux, et al. (2001). "Fake Artesunate in Southeast Asia." <strong>The</strong><br />

Lancet 357(9272): 1948-1950.<br />

O'Mathuna, D. and A. McAuley (2005). Counterfeit Drugs:Towards an Irish Response<br />

to a <strong>Global</strong> Crisis, Dublin City University and the Irish Patient's Association.<br />

O’Connor, M. C. (2007). RFID Tidies Up Distribution of Hospital Scrubs. RFID<br />

Journal,.<br />

Outterson, K. (2004). "Pharmaceuticl Arbitrage: Balancing Access and Innovation<br />

in International Prescription Drug Markets." Yale Journal of Health Policy,<br />

Law and Ethics Draft Version.<br />

- 133 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

Pincock, S. (2003). "WHO tries to tackle problem of counterfeit medicines in<br />

Asia." British Medical Journal 327: 1126.<br />

Pitts, P. (2005). 21ST Century International Drug Terrorism- Testimony be<strong>for</strong>e<br />

the Government Re<strong>for</strong>m<br />

Committee Subcommittee on Criminal Justice, Drug Policy and Human.<br />

Pitts, P. (2006). "Testimony Counterfeit Drugs and China." Retrieved August 28,<br />

2007, from<br />

http://cmpi.org/archives/2007/03/counterfeit_drugs_and_china_my.php.<br />

Pleasant, J. (2003). "Electronic Data <strong>Standards</strong> are Coming." Medical Devicelink.<br />

Polansky, S. (2005). For the Health Industry Busines Communications Council<br />

(HIBCC). (Phoenix, AZ). Personal communication <strong>for</strong> ECRI 2005a, 2005<br />

Jun 1. 3 p. .<br />

Poon, E. G., J. L. Cina, et al. (2005). Effect of bar-code technology on the incidence<br />

of medication dispensing errors and potential adverse drug events<br />

in a hospital pharmacy. AMIA Annual Symposium proceedings / AMIA<br />

Symposium AMIA Symposium (AMIA Annu Symp Proc).<br />

Poon, E. G., J. L. Cina, et al. (2006). "Medication Dispensing Errors and Potential<br />

Adverse Drug Events be<strong>for</strong>e and after Implementing Bar Code Technology<br />

in the Pharmacy." Annals of Internal Medicine 145: 426-434.<br />

PSI Situational Report and Pfizer (2005). Safeguarding the integrity of the medicines<br />

supply chain in Europe.<br />

Radcliffe, S. (2006). Docket No 2005N-0510 Anti-Counterfeit Drug Initiative<br />

Workshop and Vendor Display.<br />

Reuters (2007). China sentences ex-official to death<br />

Zheng Xiaoyu, the <strong>for</strong>mer head of State Food and Drug Administration, was convicted<br />

of accepting bribes from drug companies.<br />

RFID System Components and Costs "RFID System Components and Costs."<br />

RFID Journal.<br />

Ritter, G. (2007). Testimony Be<strong>for</strong>e the Subcommittee on Trade of the House<br />

Committee on Ways and Mans.<br />

Rivard-Royer, H., S. Landry, et al. (2002). "Hybrid stockless: A <strong>Case</strong> Study: Lessons<br />

<strong>for</strong> Health Care Supply Chain Integration." International Journal of<br />

Operations and Production Management 22(4): 412.<br />

Schuerengerg, B. K. (2006). "Bar Codes vs. RFID: A Battle Just Beginning<br />

As bar codes and RFID square off in some arenas, clinical and I.T. leaders weigh<br />

the pros and cons of each." Health Data Management 14(10).<br />

Shepherd, M. (2005). "Drug Quality, Safety Issues and Threats of Drug Importation."<br />

Cali<strong>for</strong>nia Western International Law Journal 36(1): 77-88.<br />

Stratchounski, L. and O. Rozenson (1999). "Pharmacoeconomic Perspectives in<br />

Russia." Value in Health 2(3): 246-248.<br />

SysTech (2006). "Securing the pharmaceutical supply chain with integrated itemlevel<br />

serialized product tracking: a white paper from Systech International,<br />

Cranbury, NJ, USA."<br />

Taxis, K. and N. Barber (2003). "Ethnographic study of incidence and severity of<br />

intravenous drug errors." BMJ 326(7391): 684.<br />

<strong>The</strong> Health Strategies Consultancy LLC (2005). Follow the Pill: Understanding<br />

the US Commercial Pharmaceutical Supply Chain, <strong>The</strong> Kaiser Family<br />

Foundation.<br />

- 134 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

<strong>The</strong> Partnership <strong>for</strong> Safe Medicines. (2005, June 18, 2005). "Counterfeit Drugs in<br />

Europe." Retrieved May 30, 2007, from<br />

http://www.buysafedrugs.info/UploadedFiles/europe.pdf.<br />

Towner, C. J. (2004). "Economic Benefits of EPC in Pharmaceuticals." from<br />

http://www.worldcongress.com/events/NW515/pdf/EPCglobalWhite%20Pa<br />

per.pdf.<br />

U.K. Healthcare Quality Directorate (2007). Coding <strong>for</strong> Success: Simple Technology<br />

<strong>for</strong> Safer Patient Care. London, Healthcare Quality Directorate, UK<br />

Department of Health.<br />

U.S. Food and Drug Administration (2003). Bar Code Label Requirement <strong>for</strong><br />

Human Drug Products and Blood. F. a. D. Administration. 21 CFR Parts<br />

201, 606 and 610.<br />

UNECE Working Party on Regulatory Cooperation and Standardization Policies<br />

(Working Party 6) (2007). Market Surveillance against Counterfeit Goods.<br />

USP (2004). MedMarx 5th Anniversary Data Report: A Chartbook of 2003 Findings<br />

and Trends 1999-2003. Rockville, MD, United States Pharmacopeial<br />

Convention.<br />

Vastag, B. (2003). "Alarm Sounded on Fake, Tainted Drugs: Some Wholesalers<br />

are a Weak Link in a Dangerous Chain." Journal of the American Medical<br />

Association. 290(8): 1015-1016.<br />

Vincent, C., G. Neale, et al. (2001). "Adverse Events in British Hospitals: Preliminary<br />

Retrospective Record Review." British Medical Journal 322: 517-519.<br />

Wechsler, J. (2003). "Inside Washington: Reimport Battle Complicates Anticounterfeiting<br />

Campaign." BioPharm International.<br />

Wertheimer, A., N. and e. a. Chaney (2003). "Counterfeit Pharmaceuticals: Current<br />

Status and Future Projections." J Am Pharm Assoc (Wash) 43(6):<br />

710-718.<br />

Wertheimer, A., N., T. Santella, et al. (2004). "Counterfeit Pharmaceuticals- Update<br />

on Current Status and Future Projections." Touch Breifings- Pharmagenerics:<br />

30-36.<br />

Wilson, J., W. Cunningham, et al. (1992). "Stockless inventory systems <strong>for</strong> the<br />

health care provider: three successful applications." Journal of Health<br />

Care Marketing 12(2): 39-45.<br />

Wirtz, V., K. Taxis, et al. (2003). "An observational study of intravenous medication<br />

errors in the United Kingdom and in Germany." Pharm World Sci<br />

25(3): 104-11.<br />

World Health Organization. "General In<strong>for</strong>mation on Counterfeit Medicines." Retrieved<br />

May 31, 2007, from<br />

http://www.who.int/medicines/services/counterfeit/overview/en/.<br />

World Health Organization "Is a uni<strong>for</strong>m definition of a counterfeit drug necessary?"<br />

Volume, DOI:<br />

World Health Organization. "What are substandard medicines?" Retrieved May<br />

31, 2007, from<br />

http://www.who.int/medicines/services/counterfeit/faqs/06/en/.<br />

World Health Organization. (2006, February 2006). "Counterfeit Medicines." Retrieved<br />

January 6, 2007, 2007, from<br />

http://www.who.int/mediacentre/factsheets/fs275/en/.<br />

- 135 -


<strong>Global</strong> Data <strong>Standards</strong> in the Healthcare Supply Chain: <strong>The</strong> Business <strong>Case</strong><br />

Michigan State University School of Packaging<br />

World Health Organization, W. (2006, February 2006). "Counterfeit Medicines."<br />

Retrieved January 6, 2007, 2007, from<br />

http://www.who.int/mediacentre/factsheets/fs275/en/.<br />

Yankus, W. (2006). Counterfeit Drugs: Coming to a Pharmacy Near You, <strong>The</strong><br />

American Council<br />

- 136 -

Hooray! Your file is uploaded and ready to be published.

Saved successfully!

Ooh no, something went wrong!