Unique Device Identifier Rule Could Impact Imaging Equipment Costs

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The U.S. Food and Drug Administration (FDA) proposed rule that all medical devices distributed in the United States carry a unique device identifier (UDI) will come with a small but worthwhile cost says one presenter at the upcoming UDI Conference 2013.

Ken Koldan, business development manager for FLEXcon — an international maker of among other things pressure-sensitive film labeling products for medical equipment — admits that OEMs will likely pass along initial costs to health care providers, but the rule may ultimately lower health care costs and help providers.

According to Koldan, benefits for equipment manufacturers and health care providers include:

  • reduction of medical errors
  • improved medical device reports
  • reduced product counterfeiting
  • more efficient purchasing, reimbursement, and supply chain management

“Even the hospitals are starting to acknowledge that this is not a bad thing,” he says. “Yes, it involves labeling and setting things up. It is always painful as you start in the beginning, but once you get the data populated, you can do a lot of good things with that data.”

Koldan has heard the argument that the rule could raise prices for imaging equipment buyers, but is optimistic that the concerns may be overblown. “Everyone says the costs are going to go through through the roof,” he says. “But if I’m an OEM, and I’m making a CT scanner, there are warning labels and asset serialization labels on there. We are talking about adding about 15% to one of those labels...it’s basically the cost of a label.”

Koldan acknowledges that the IT side of the work flow for manufacturers (connecting to a UDI database that the FDA is hosting, reporting data to verify and validate, and storing records) will necessitate greater spending on the manufacturer side. “I absolutely agree that there is an IT expense there,” he says. “What that IT expense is depends on the medical device manufacturer. Will they pass that cost of IT business on to the medical device users? Absolutely. Do I think that will be such a dramatic increase of expense?...It could be, but I don’t think it will be.

“I think the business benefits will lead to other costs coming down,” continues Koldan. “Ultimately, you might have a slight increase, but nothing dramatic like a CT scanner going up 10%. I don’t see that happening.”

Koldan believes additional concerns about the nuts and bolts of labeling can be readily addressed by the governing bodies. “This is not the first industry to do this,” he says. “Retail, grocery stores, automotive, and aeronautic industries have done this. And there are a lot of automatic identification and data capture standards from ISO and ANCI that document how you make a bar code. A global organization called AIM [Association for Automatic Identification and Mobility] does this, and they have been doing it for 40 years.”

Congress passed legislation in 2007 directing the FDA to develop regulations establishing a UDI system for medical devices. Six years later, the FDA is in “the final step” toward putting out a final rule. The comment period is closed, and the last gate is the Office of Management and Budget (OMB) in the executive branch. Once OMB approves, it will become a final rule and regulation.

“After final rule, Congress still has to fund and approve the FDA's operational budget next year,” explains Koldan. “This typically is done, and only in rare instances do they call out a specific program in the FDA budget to de-allocate funds.”

The FDA’s Unique Device Identification (UDI) Conference (where Koldan is speaking) is taking place on September 19 and 20 at the Hilton Baltimore in Baltimore, Md.