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Executive Summary

BAR CODING IS PROVIDED FOR ONLY HALF OF U.S.-MARKETED Rx DRUGS, NARD estimates in a March 13 letter to Health Care Financing Administration Office of Medicaid Policy Director William Hickman. HCFA is evaluating bar coding as one approach to reducing disputes over Medicaid drug rebate utilization data ("The Pink Sheet" March 9, p. 11). The NARD letter, signed by NARD Third-Party Program Affairs Director Ken Whittemore, outlines a number of potential problems with the bar code approach. Whittemore said that based on his own experience and consultations with the pharmacy computerization firms QSI, Renlar and Transaction Data Services, "only about half of the prescription drugs currently marketed in the United State are bar coded. Further, in some cases where products are bar coded it is not with the NDC." National Drug Codes are the basis for identifying products in Medicaid rebate reports. The retail pharmacy group said requiring manufacturers to add bar code information probably would increase product costs and "this is an inappropriate time to increase costs in the health care arena." Overall, NARD said, "we strongly disagree that it [bar coding] is a viable solution and we oppose any mandate that would require pharmacists to acquire and utilize bar-coding technology to participate in the Medicaid program." From the pharmacy perspective, NARD cited estimates that 80% to 90% of pharmacies in the U.S. are already automated at a cost of $10,000 to $30,000 per pharmacy. "If pharmacists were willing to invest this amount of money in technology, it is reasonable to assume that they would have pushed for the inclusion of a bar- coding mechanism if there were a compelling need for it. To date, they have not." The association estimated that adding bar code scanning computer hardware would cost $500 to $1,000 per pharmacy work station. NARD raised other operational concerns, such as how scanning numerous bottles would fit into pharmacy work flow and how it would fit with other computer programs such as those that automatically query pharmacists about generic substitution. "In a bar-coding system, the pharmacists would scan the brand-name product, but then the computer would ask if a generic substitution is desired," NARD explained. "If the pharmacist answered yes, the computer would select and substitute the product internally, without scanning the generic product. Given that generic substitution is greater than 25%, this would significantly circumvent a bar-coding system." In a pointed parenthetical comment, NARD added that it "is important to note that this generic substitution mechanism relies heavily on accurate formulary data. The fact that this mechanism works well in pharmacies now is a testament to the accuracy of their files." Elsewhere, NARD agreed that using correct NDC codes "is an extremely important practice for pharmacists to follow. As promised, we are in the process of reinforcing this notion in the minds of our members through several of our publications."

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