How UDI and GUDID Maintain Patient Privacy

A Unique Device Identifier (UDI) on a medical device will allow more accurate reporting, reviewing and analyzing of adverse event reports so that problem devices can be identified and corrected more quickly.

As part of the UDI system, the FDA is also creating the Global Unique Device Identification Database (GUDID) which will include basic identifying elements for each device with a UDI. Most of this information will be made available to the public so that users of a medical device can easily look up information about the device. The UDI does not indicate, and the database will not contain, any information about who uses a device, including personal privacy information.  (From FDA website)

Healthcare providers have the ability to store the UDI of a medical device used on a patient in the patient’s medical record.  In the event of a problem or recall of a device, healthcare providers could search their records for patients that were treated with the problem device.  But, patient information is never submitted to the GUDID.  The privacy of patient records is protected by the HIPAA privacy law.

Medical device companies will have to include a UDI on some of their products and submit identifying information about those products to the GUDID starting on September 24, 2014.

USDM Life Sciences will help you assess, plan and execute the changes and enhancements necessary to meet the new regulations. Our team of experts will assess your products, the markets where they are sold and determine an implementation strategy for the changes that need to be made. USDM’s assessment methodology is extensive and includes the labels and packaging, the management of identification changes to each product, the changes to PLM, ERP, EPCIS and packaging systems, changes to printing, vision inspection and warehouse/inventory management systems and interfaces to the GUDID database. Also, USDM experts ensure that all changes and enhancements are implemented under the governing GMP regulations, under change control and validated prior to release for production.

Unique Device Identification: Are You Ready?

In less than a year, class III medical devices will need to have a Unique Device Identification (UDI) on them. The deadline means manufacturers of class III devices will soon need to comply with the FDA’s new UDI rule.  Deadlines for class II and class I devises take effect on a progressive basis over the next five years.

The UDI regulations will impact many aspects of medical device businesses.  Companies will be required to integrate the UDI into their information systems, submit product information to the Global Unique Identification Database (GUDID), and train employees.

For many medical device companies, developing solutions to comply with UDI requirements is complicated. For example, some of the world’s largest medical device companies have more than one thousand devices and sometimes dozens of versions of each one.

USDM Life Sciences will help you assess, plan and execute the changes and enhancements necessary to meet UDI regulations. Our team of experts will assess your products, the markets where they are sold and determine an implementation strategy for the changes that need to be made. +USDM Life Sciences assessment methodology is extensive and includes the labels and packaging, the management of identification changes to each product, the changes to PLM, ERP, EPCIS and packaging systems, changes to printing, vision inspection and warehouse/inventory management systems and interfaces to the GUDID database. Also, USDM experts ensure that all changes and enhancements are implemented under the governing GMP regulations, under change control and validated prior to release for production.

What A Unique Device Identifier Will Look Like

Image from FDA website

As part of the FDA’s UDI final rule, the government agency put together a fictitious example of what a Unique Device Identifier on a medical device would look like.  The label contains information about the product name, its expiration date, lot numbers, manufacturer information, barcode and details about the item.

(The information below is from the FDA’s Medical Devices webpage)

A UDI is a unique numeric or alphanumeric code that consists of two parts:
• a device identifier (DI), a mandatory, fixed portion of a UDI that identifies the labeler and the specific version or model of a device, and
• a production identifier (PI), a conditional, variable portion of a UDI that identifies one or more of the following when included on the label of a device:

1. the lot or batch number within which a device was manufactured;
2. the serial number of a specific device;
3. the expiration date of a specific device;
4. the date a specific device was manufactured;
5. the distinct identification code required by §1271.290(c) for a human cell, tissue, or cellular and tissue-based product (HCT/P) regulated as a device.

As part of the UDI system, the FDA is also creating the Global Unique Device Identification Database (GUDID) which will include a standard set of basic identifying elements for each device with a UDI. Most of this information will be made available to the public so that users of a medical device can easily look up information about the device. The UDI does not indicate, and the database will not contain, any information about who uses a device, including personal privacy information.

Advantages of Unique Device Identification (UDI)

There are still medical device companies that view Unique Device Identification regulations as a federal tax.  It’s true, UDI regulations will cost organizations money.  But, there are plenty of advantages worth noting.

• A device identification system provides the ability to connect the manufacturers, suppliers and the healthcare community with a shared electronic infrastructure to create clarity of each device’s specification for support and maintenance.

• UDI has the ability to create better visibility of demand so manufacturers don’t overproduce.  Healthcare facilities can share inventory information with distributors who could also share the information with manufacturers.  A clear picture of demand for medical devices can prevent over production.

Here are more benefits listed in the FDA’s Unique Identification System; Final Rule report.

• UDI regulations are expected to improve medical device event reporting by providing a standardized, reliable and unique identifier with which to report a problem device.  With more reliable identification of devices associated with an adverse medical event, FDA would be able to improve post-market surveillance of medical devices and detect problem devices more rapidly.

• FDA expects that more accurate and prompt identification of problems would lead to a reduced incidence of adverse events.  Public health safety alerts, for example, could be more accurate and timely.

• FDA expects that recall actions could more effectively target a problem device.

• FDA expects the increased accuracy of adverse medical device reporting and improved recalls would reduce the total number of adverse medical device events, although we are unable to quantify that reduction.  

Financial Benefits of Moving to the Cloud

Cloud IT services can help you save money on server maintenance, power and cooling costs, and software licensing and upgrade expenses. About half (49%) of small and medium sized businesses use cloud computing to lower costs, according to a survey by Microsoft.

Lower IT Costs:
Companies that don’t use the Cloud have to pay for a place to put their data center, buy and maintain equipment and pay for power and cooling.  Cloud based solutions are a way to reduce those costs.  For a monthly fee that is far less than having your own equipment, a cloud service provider worries about equipment, power and cooling.  Plus, you can expand or reduce your storage space as your needs change.

If your data and applications are on the cloud, you will save money on desktop computer purchases because in-house equipment will last longer.  Plus, desktops that don’t have data and applications stored on them run faster.

Lower Payroll Costs:
IT staff spend a lot of time rebooting servers, backing up hard drives, diagnosing failures and updating software.  Cloud service providers will handle all your IT maintenance issues, which means your IT department is free to handle other matters.

No Capital Costs:
On-site servers are a big capital expense.  But if you use the Cloud, it’s someone else’s problem.  You can spend the money on something else.

How the Medical Device Industry is Responding to Financial Challenges

During the last 6 years, the FDA regulated medical device industry has faced revenue and profitability challenges. The result has been a search for new revenue and profitability, which has included looking for new sources of profit. The field service arm of these enterprises had traditionally been treated as a cost center and a business necessity supporting the sales function. Now, it is being transformed into a profit center, with a substantially new set of goals, tools and KPIs.

The Medical Device industry had first responded to these trends by seeking the usual cost saving efficiencies in their manufacturing and distribution operations, cutting staff and looking to acquisitions and outsourcing of activities. At the same time the increased spending on R&D to produce more innovative products has sought to improve revenue streams.

However, more recently there has been a renaissance in senior management viewing the field service organization for potential profits. Historically this area had been seen strictly as a cost center, charging back to the costs of product. As a result the trend is now to begin managing the field service organization as a line business in its own right, resulting in the following strategic initiatives:

Drive a more compelling value proposition

Companies have been refining their marketing message to provide stronger financial models and value propositions justifying the use of their field service organization by customers. This is targeted at:

• Improving sales against competition
• Selling service contracts at Point of Sale
• Conversions of warranty to service contracts
• Increased service contract renewals

Changing relationships for engineer roles

It is axiomatic that the customer has a more trusted relationship with their local field service engineer than their medical device sales representative. Companies are trying to build on that trusting relationship by:

• Training engineers in customer relationship management skills
• Training engineers to identify potential sales and service opportunities at their customers location
• Improving the collaboration of engineers with the sales team
• New incentives related to team sales
• New standards for hiring qualifications beyond technical skill

Restructuring the Field Service and Sales organizations

Formerly the field service organization and sales organizations in Medical Device companies had little interaction and often had limited territory coverage overlap, so the coordination and cooperation of the two teams was limited or non-existent. This is being addressed through:

• Regionally aligning sales and service organizations such that consistent team coverage can be achieved
• Joint measurement and reporting of sales results with visibility to both teams by joint customer reporting
• Common goals and incentives to drive contract renewals and warranty conversions

Reducing costs with fewer site visits, remote diagnostics, inventory

Reducing costs in field service translates into improved productivity end to end, not just the reduction of staff as in the old model. Initiatives to accomplish this include:

• Reducing the number of unnecessary site visits with improved first call remote problem solving
• Remote diagnostics built into instruments to enable a “predictive service model” to catch problems before they grow to larger costlier issues
• Engineering for serviceability to reduce the time needed on site
• Improved dispatching processes to ensure the right qualification applied

Revise service metric-oriented processes

While all service contracts have service level agreements (SLAs) specifying critical parameters such as time to call back, time to resolution etc, the actual history of companies meeting these SLAs is not stellar, with some studies pegging the rate at 68% on average. To change this legacy, companies are:

• Employing real time data collection of work order information to capture critical details of timing from the first call to resolution
• Process oriented training of call center and engineering staff to improve team collaboration and understanding of the dynamics of SLA achievement
• A focus on the overall customer experience management process

Improving call center first call resolutions

Industry wide it is estimated that up to 50% of unplanned field service engineering dispatches are avoidable or unnecessary, with the root cause often being user training issues or easily reset parameters or calibration resolutions. To avoid this syndrome firms are investing in improving first call resolutions by:

• Increased training of first line call center staff
• Provision of improved knowledge bases and scripts for diagnostic support
• Escalation procedures to second line support prior to dispatch

Streamlining product complaint resolution process

The receipt of customer or product complaints resulting in a service call often results in the processing of regulatory complaint reports and resolution documentation. This burden is costly and companies have been taking action to improve productivity and compliance in this area through:

• Improved training of call center staff on complaint criteria and processing
• Integration of field service operational systems with complaint management systems

Challenges Facing the Medical Device Industry

During the last 6 years, the FDA regulated medical device industry has faced revenue and profitability challenges. The result has been a search for new revenue and profitability, which has included looking for new sources of profit. The field service arm of these enterprises had traditionally been treated as a cost center and a business necessity supporting the sales function. Now, it is being transformed into a profit center, with a substantially new set of goals, tools and KPIs.

Multiple factors have been pressuring the medical device industry revenues and are likely to remain as concerns in the coming years.

• Increased clinical and regulatory standards increase overhead
The increased complexity and volume of medical device marketing submissions has increased the time taken by the FDA to process a 510 (k) from 90 days in 2005 to 140 days in 2010, an increase of over 55 percent. FDA is requesting more clinical data to support claims.

• Increasing R&D expenses
Increased complexity and sophistication of devices and assays are increasing R&D expenditures.

• Reductions in reimbursements
Efforts to capitates reimbursements for medical assays by insurance companies and HHS is reducing providers’ ability to fund capital for new devices.

• Increased complexity of medical equipment/devices
Increased complexity of devices results in more difficult diagnosis and repair processes and increases the cost of field service. It is raising the cost of training of field service technicians and raising the bar for salaries to hire more qualified field service engineers.

• More demanding and diverse customer base
Customers have more choices and are more demanding of equipment and manufacturers, requiring higher MTBF and more aggressive SLAs. Customers are trying to get more out of their reduced capital and expense budgets and asking for greater incentives.

• Increased competition
Increased competition from start-ups and spin-offs reduces the profit margin for manufacturers. Industry consolidations and other changes are eroding customer loyalty since differentiators are not as clear cut and choice has increased.

• Migration of some testing to home based tests (vs. labs)
Migration of some diagnostic testing to home based kits threatens to reduce the volume of laboratory testing and the spending on capital programs for new laboratory equipment.

The overall result is flat or reduced industry revenue growth of up to 12% by some measures.