Repertoire Magazine

Promoting Excellence in Healthcare Sales

UDI: The Wait is Over

The Unique Device Identifier is here; supply chain needs to adapt rapidly, say experts

CHICAGO–UDI isn’t just for freaks and geeks or your company’s regulatory guys. Sales and marketing executives, supply chain professionals and front-line sales reps need to get up to speed…and fast…not just because the feds are requiring it, but because UDI represents opportunities for all sectors of the supply chain to improve their internal processes and sales and, above all, to help clinicians provide better patient care. That was the message from speakers at the recent Fall Conference of the Healthcare Manufacturers Management Council, or HMMC, whom moderator Kevin Neuman, vice president of marketing and operations for Innovative Healthcare Corp., asked to discuss the strategic implication of UDI.

UDI stands for “Unique Device Identifier.” After years of deliberation, in September 2013 the U.S. Food and Drug Administration issued a final rule on UDI as well as a database for medical devices. And the clock has already begun ticking. Effective September 2014, for example, all newly manufactured Class III devices – considered the riskiest of all – were required to carry a UDI on their packaging. Other important dates are:

But manufacturers – and distributors that private-label – shouldn’t wait for the regulatory deadlines, cautioned Dennis Black, director of e-business for BD. That’s because a growing number of customers – including IDNs and group purchasing organizations – are demanding UDI now.

The UDI system consists of two core items:

  • A unique number assigned by the device manufacturer to identify the version or model of a device. The number must be represented on the label in plain text as well as in a manner that can be read by automatic identification and data capture (AIDC) technology, such as a bar code. The identifier contains two elements: 1) the device identifier, or DI, which describes the manufacturer, product, brand name, number of items (in case, box or each); and 2) the production identifier, or PI (identifying the lot or batch number, date of manufacture, expiration date).
  • A publicly searchable database administered by the FDA, called the Global Unique Device Identification Database (GUDID), which will serve as a reference catalogue for every device with an identifier. GUDID will house only so-called “static” information about manufacturers’ products. No identifying patient information will be stored in this device information center, nor will companies’ sales information – such as volume of goods shipped, customers or pricing, etc. – be represented. For a list of all device information to be submitted to the GUDID, see http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentification/GlobalUDIDatabaseGUDID/default.htm.

The FDA’s rule allows manufacturers to use one of two standards for the UDI:

  • GS1 US, whose UDI system is called the GTIN, or Global Trade Item Number.
    The Health Industry Business Communications Council (HIBCC), whose UDI is the Labeler Identification Code, or LIC.

The FDA requires the use of ICCBBA (the international standards organization, which is related to the World Health Organization) for human cells, tissues, or cellular and tissue-based products (HCT/Ps) that are regulated as devices.

In most cases, the manufacturer – as the “labeler” of a medical product – bears responsibility for ensuring that all of its devices are properly labeled and accounted for in the GUDID. That said, distributors are accountable for their private-label products.

Implications

One of the federal government’s primary reasons for pursuing a UDI is to facilitate product recalls, explained Black. The UDI will provide a way to more easily track which patients received a certain implantable device, for example.

But the UDI has additional implications for the supply chain, offering benefits for providers and suppliers alike.

What customers want is simple, said Black. They want to be able to scan products at the point of receipt, at the bedside or in the lab – just as companies like Walmart and Whole Foods do in their industries. That identifying information can help providers control their inventory better and ensure they are paying accurate prices for contracted items. Once the UDI is integrated into electronic health records, providers can use it to compare one physician’s usage of a particular product to those of his or her peers, and perhaps even to compare the patient outcomes associated with that usage.

For providers, it comes down to “cost, quality and outcomes,” said Ellenmary Martin, chief strategy officer, DUKAL Corp. Traditionally, health systems have been hard-pressed to accurately identify their cost to serve. But with a UDI system in place, they can more accurately identify the materials portion of that care – and bill accordingly. What’s more, by giving them visibility into what products are being used, the IDN can monitor standardization efforts, and can compare product usage from clinician to clinician.

Contracting

UDI represents operational efficiencies for all players in the supply chain. Contracting is one of the most salient examples, according to Denise Odenkirk, senior director, industry solutions, GHX, who participated on a Health Industry Distributors Association-sponsored work group on contract administration. (The group issued a white paper on UDI and the contracting process in September 2014.)

“Today, contract administration is very complex,” said Odenkirk. Most suppliers have “heroes” in the office making Herculean efforts to keep contracts up to date. “Even so, how many of you have gotten a call from an irate customer because the contract terms are wrong?” she asked. Common issues include:

  • Price mismatches.
  • Credits/rebills. (“They’re miserable,” said Odenkirk. “Usually, when you invoice incorrectly for an order, it’s not just one time; you’ve probably invoiced incorrectly for the last three months.”)
  • Rebate denials (stemming from confusion about the accuracy of the price when the product was shipped).

Fixing issues such as these eats up non-value-added time, she said. “Your sales reps are taking care of pricing issues rather than selling.”

The HIDA committee examined how other industries handle contract management, and recommended the healthcare supply chain do three things:

  • Automate all contracting transactions, and redesign those processes that cannot be automated.
  • Adopt industry standards and processes, including UDI.
  • Share updated contract information with trading partners on a timely basis, and use EDI transaction sets where possible (e.g., 845 for contract information, 832 for price/sales catalog, 867 for sales tracings, 849 for chargeback reconciliation, etc.)

Implementing UDI and electronic data interchange may be challenging, but participants in the med/surg supply chain need only look at their counterparts in the pharmaceutical supply chain to see the potential benefits, said Odenkirk. The National Drug Code (NDC) has helped pharmaceutical manufacturers and wholesalers clean up their processes, she said.

“If you take advantage of these standards, you will improve your business processes; you can better meet your customers’ demands; you will be perceived as a leader by adopting standards; and you can position yourself as being easy to do business with, while realizing lower operating costs,” she said.

Marketing and sales executives tend to focus their efforts on this quarter’s performance. “But [it will be in your best interest] to figure out how you will use these standards as a driver to improve operating efficiencies and sales.”

Editor’s note: To read the FDA’s Final Rule on the Unique Device Identification System, issued Sept. 24, 2013, go to https://www.federalregister.gov/articles/2013/09/24/2013-23059/unique-device-identification-system

Timetable for UDI implementation
(Compliance date – Requirement)

One year after publication of final rule (Sept. 24, 2014)

  • The labels and packages of Class III medical devices and devices licensed under the Public Health Service Act must bear a UDI. (A one-year extension may be requested no later than June 23, 2014.)
  • Class III stand-alone software must provide its UDI.

Two years after publication of final rule (Sept. 24, 2015) The labels and packages of implantable, life-supporting, and life-sustaining devices must bear a UDI.

  • A device that is a life-supporting or life-sustaining device that is required to be labeled with a UDI must bear a UDI as a permanent marking on the device itself if the device is intended to be used more than once and intended to be reprocessed before each use.
  • Data for implantable, life-supporting, and life-sustaining devices that are required to be labeled with a UDI must be submitted to the GUDID database.

Three years after publication of final rule (Sept. 24, 2016) •

  • Class III devices required to be labeled with a UDI must bear a UDI as a permanent marking on the device itself if the device is a device intended to be used more than once and intended to be reprocessed before each use.
  • The labels and packages of Class II medical devices must bear a UDI.
  • Data for Class II devices that are required to be labeled with a UDI must be submitted to the GUDID database.

Five years after publication of final rule (Sept. 24, 2018) A Class II device that is required to be labeled with a UDI must bear a UDI as a permanent marking on the device itself if the device is intended to be used more than once and intended to be reprocessed before each use.

  • The labels and packages of Class I medical devices and devices that have not been classified into Class I, Class II, or Class III must bear a UDI.
  • Data for Class I devices and devices that have not been classified into Class I, Class II, or Class III that are required to be labeled with a UDI must be submitted to the GUDID database.
  • Class I stand-alone software must provide its UDI.
    Seven years after publication of final rule (Sept. 24, 2020) Class I devices, and devices that have not been classified into Class I, Class II, or Class III that are required to be labeled with a UDI, must bear a UDI as a permanent marking on the device itself if the device is intended to be used more than once and intended to be reprocessed before each use.

Source: U.S. Food and Drug Administration, “Unique Device Identification,” http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentification/default.htm

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