Product Classification in Healthcare
April 2015

Executive Summary

The purpose of this document is to provide an overview of the global classification and nomenclature landscape inhealthcare and to offer guidance. This is intended for those who are investigating options for classifying products in
the healthcare sector.
Product classification and nomenclature in the global healthcare sector is quite complex for many reasons. There
have been discussions within the GS1 Healthcare community for many years regarding the potential to standardise
product classification by providing a global standard, such as other industries have done with GS1’s Global Product
Classification (GPC).
In the past, GS1 has surveyed the global healthcare community via the GS1 Member Organisations, to better
understand the current status and developments as they relate to the use of classification and nomenclaturesystems. In late 2014 and early 2015 we again surveyed the global community in an effort to determine leading
trends and practices. While the survey results do not point to a clear trend or use of one single system over another,
there are some general observations and recommendations which can be offered. Table 1 provides a listing ofvarious purposes for classification based on the responses to our surveys.
It should be noted that there is a subtle but specific distinction which should be made between classification andnomenclature. This document offers a simple differentiation intended to assist in the evaluation of the systems listed
in Table 2.
While most people will agree that a single global classification standard is desirable, it is very impractical andperhaps even impossible to migrate the hundreds of thousands of users (i.e. hospitals, manufacturers, regulators)
from the current systems they use to a single global standard. This is further evidenced by the recent regulations
that have mandated specific systems. For this reason the Global Data Synchronisation Network (GDSN) enables the1

Product Classification in Healthcarecommunication of any of the classification or nomenclature systems associated with a specific product in the
network.
This paper provides an overview of the systems currently used across the world and a listing of the business reasons
why products are classified. This document can serve as a reference tool in the process of determining which system
Trading Partners may choose to use.

Current Situation

There currently there are over 20 different Classification and Nomenclature systems used across the world for theclassification of products in the healthcare sector. Classification and Nomenclature systems serve different purposes.
A simple distinction between a Classification systems and a Nomenclature system is as follows:Classification –A form of cataloguing, or identifying, products and can be defined as a process for grouping
products into categories based on an understanding of the essential properties and relationships between
them. A classification system is used to group like products such as Medical Devices, versus Pharmaceutical
Drugs. Example classification systems are UNSPSC, GPC, eClass and ATC among others.



Nomenclature – A system with rules to name individual items. A nomenclature system is used to provide
common descriptions to products which have the same performance characteristics and thereby can besubstituted for each another (i.e. two syringes, with differing product descriptions from two different
manufacturers which are designed for the same purpose or use).

Classification and Nomenclature systems are usually developed for specific purposes, such as tariff code
harmonization by the World Customs Organisation, Anatomical Therapeutic Chemical (ATC) classification by theWorld Health Organization (WHO) and more general purposes such as purchasing and spend analytics or regulatory
purposes such as Global Device Nomenclature (GMDN) used by the U.S. FDA for their Unique Device Identifier (UDI)
regulation. The GMDN is also required by regulators in many countries for regulatory submission purposes.

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Product Classification in Healthcare
There are many business reasons why products need to be classified. A survey of the global healthcare community
has identified specific reasons why people use classification systems. The order of the systems listed below is basedon the original survey of the global healthcare community when asked why they classified products.

Business Process

Definition

Spend Analysis

Spend Analysis is the process of collecting, cleansing, classifying and analysing
expenditure data with the purpose of reducing procurement costs.
Spend analysis can provide answers to such questions as: What was bought?
 Who bought it? (requisitioner, buyer, department, location)
 From whom did we buy it?
 When was it bought?
 How much did we pay for it?
Financial Analysis refers to an assessment of the viability, stability andprofitability of a business or business unit, as a basis for making businessdecisions. Based on the results, management may decide to: Continue or discontinue a part of its business;
 Make or purchase certain materials in the manufacture of its goods;
 Buy or lease certain equipment used in the production of its goods;
 Issue stocks or negotiate a bank loan to increase its working capital; Make decisions regarding investing or lending capital.
Financial analysis deals with issues such as profitability, cash flow, liquidity andsustainability.
Procurement is the business process of obtaining goods and services—fromrequisition through payment. It commonly involves
 purchase planning standards determination

Financial Analysis

Procurement (Sourcing,
Acquisition)3

Product Classification in Healthcare

Strategic Sourcing

Tendering (Request for
Quotation (RFQ), Request
for Proposal (RFP), Call for
Bids)
Enterprise Resource
Planning (ERP) specifications development
 supplier research (“discovery”) and qualification
 value analysis
 financing
 price negotiation
 purchasing (PO, Acknowledgement, Invoice…)
 supply contract administration
 inventory control and stores disposals and other related functions
Strategic sourcing is an institutional procurement process that continuously
improves and re-evaluates the purchasing activities of a company.
The steps in a strategic sourcing process are:
 Assessment of a company's current spend (see Spend Analysis)
 Assessment of the supply market (who offers what?) Development of a sourcing strategy (where to buy what, while minimizing
risk and costs)
 Identification of suitable suppliers Negotiation with suppliers (products, prices) Implementation of new supply structure Track results and restart assessment (continuous cycle)
Tendering is a process by which a company seeks prices and terms for aparticular product or service to be provided under a contract. The sealed offers
themselves, typically including company information, a description of the
proposed product or service, and a price quote, are known as tenders or bids.
Tendering is often mandated and regulated in the public sector.
Enterprise Resource Planning (ERP) is an information system designed tocoordinate all the resources, information, and activities needed to complete
business processes such as order fulfilment or billing. ERP systems come in4

Product Classification in Healthcare
Materials Management
Information System(MMIS)
Asset Management

Category Management(Merchandising)many different forms, most including multiple modules for various businessprocesses.
Materials management is the branch of logistics that covers the acquisition of
supplies, quality control of the purchasing process, and the standards involved inordering, shipping, receiving, and warehousing those supplies. Most large US
healthcare providers operate MMIS. It is common usage to refer to MMIS as asubset of ERP systems.
Asset Management is the practice of managing the whole lifecycle of anorganization’s assets, both physical and non-physical.
Asset lifecycle includes design, construction, commissioning, operating,
maintaining, repairing, modifying, replacing and decommissioning/disposal.
Examples of physical assets include buildings and capital equipment. Examples of
non-physical assets include IT assets, network configurations, software, digitalasset, electronic media and data.
Category Management refers to where a large company manages groups of
products as separate business units responsible for their own inventory turns,
profit, etc. It also refers to where a manufacturer and a retailer collaborate todevelop a marketing strategy for a group of products. Also (merchandising)refers to activities aimed at increasing inventory turns, such as special offers,
bundling, free samples and displays.
Table 1

In 2009 GS1 Healthcare recommended the creation of two overarching Bricks in the GS1 Global Product
Classification (GPC) standard which provide a very high level classification of the two major product groups inhealthcare, while enabling the adoption of the Global Data Synchronisation Network (GDSN) in Healthcare. A
decision was also taken by GS1 Healthcare to not develop further classification granularity for GPC within thehealthcare sector. The rationale for this decision is that there is no desire on the part of the global healthcare

5Product Classification in Healthcarecommunity to migrate to a single classification system globally from many systems currently in use. In some cases,
it is not possible to migrate to a single system because regulations may require the use of a particular system.
Subsequently, an extension of these two bricks was approved. The two additional bricks allow for the separation ofdevise and pharmaceutical items intended for human use and consumption from those specifically designed foranimal welfare (veterinary).
Therefore the GPC standard currently consists of four main Bricks (classification codes), one for Medical Devices, one
for Pharmaceutical Drugs, Biologics and Therapeutic Nutritionals, one for Veterinary Medical Devices, and one for
Veterinary Pharmaceutical Drugs, Biologics and Therapeutic Nutritionals, plus an additional 135 Bricks which had
been previously developed mostly for the retail industry, which includes retail pharmacies, prior to the 2009 GS1
Healthcare recommendation.
For a list of the GPC Brick codes which may be used for healthcare products visit the GS1 website.

Support for Other Classification Systems

In addition to the GPC system as the mandatory classification for GTINs in the GS1 Global Registry, the Global Data
Synchronisation Network (GDSN) provides support for other classification systems. This feature allows for the use ofvarious classification systems outside the GDSN, as needed in specific countries, sectors or as required by trading
partners.
Classification systems, such as UNSPSC, CLADIMED, eClass, NHS e-class and others are identified within the GDSN
by using the “Additional Classification Agency” attribute. This function provides structured identification andmanagement of a relationship-specific classification system.
The GDSN attributes for additional classification systems are listed below.
 additionalClassificationo additionalClassificationAgencyName
6

Product Classification in HealthcareooadditionalClassificationCategoryCode
additionalClassificationCategoryDescription

As adoption of global standards increases in healthcare globally, stakeholders in many countries turn to GS1 for a
recommendation on a classification system to adopt for their local market. Because the decision was made not tofully developed GPC for healthcare, GS1 and its Member Organizations are unable to make a specificrecommendation.
In late 2014 GS1 conducted a survey of the global healthcare community in order to get a more current
understanding of the classification landscape. The survey results highlight the considerable complexities which exists
in this area and that no one system, or few systems, emerge as the clear leader across the board. In fact, theresults further validate the original understanding of why it is impractical and perhaps impossible to migrate tosingle system globally.
Below is a listing of the various Classification and Nomenclature systems used in healthcare and the declared
purpose for each system. It should be noted that some of these systems, such as MedDRA and SNOMED, are also
used for medical terminology classification or indications and diagnosis and as such may be attached to the
product’s data in addition to other systems.
SystemAHFS

Definition/Descripti Maintenancone Agency
American Hospital
Formulary Service andPharmacologic
Therapeutic
Classification classification allows
the grouping of drugs
with similar

AmericanSociety of
HealthSystem
Pharmacists

WebsiteDeclared Purpose

http://www.ahfsdr
uginformation.com/pt-classificationsystem.aspx

Clinical: The mission of AHFS
Drug Information® (AHFS DI®)is to provide an evidence-based
foundation for safe and effective
drug therapy.

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Product Classification in Healthcare
pharmacologic,
therapeutic, and/or
chemicalcharacteristics
ATC

ClaDiMed

CMDR

AnatomicalWHO
http://www.whocc. Research: The purpose of the
Therapeutic Chemical Collaborating no/atc/structure_a ATC/DDD system is to serve asClassification - active
Centre fornd_principles/a tool for drug utilization
substances are
Drugresearch in order to improve
divided into different
Statistics
quality of drug use.
groups according to
Methodology
the organ or system(WHOCC)
on which they act andtheir therapeutic,
pharmacological andchemical properties
Classification desdispositifs médicaux
is the classification for
medical device used
in France and Belgium

ClaDiMed
association

Canadian Medical
Health Canad
Device Regulations
a's Therapeut(CMDR)
ic Products
Preferred Name CodeDirectorate(PNC)
The Keyword Index toAssist Manufacturers
in Verifying the Classof Medical Devices isintended to assist
manufacturers in

http://www.cladim Modelled after the ATC, toed.com/english- provide a generic nomenclatureversion/for healthcare providers anddevice suppliers.
CMDR is found at
the following
locations two
locations(part 1):
http://lawslois.justice.gc.ca/eng/regulations/SO
R-98-282/page1.html#s-1.

Regulatory: To aid device
manufacturers in registering
products with regulatory agency
prior to sale in Canada.

(part 2)8

Product Classification in Healthcare
confirming theclassification of
medical device
products after
application of theClassification Rules for
Medical Devices set
out in Schedule 1 of
the Medical Devices
Regulations.

http://lawslois.justice.gc.ca/eng/regulations/SO
R-98-282/page5.html#s-32.
PNC is found at
http://www.hcsc.gc.ca/dhpmps/md-im/applicdemande/guideld/keyword_motscl
es2-eng.php

CND

Classificazione
Nazionale dei
Dispositivi medici(CND) - Italianclassification system
for medical devices

Ministerodella Salute
Dipartimentodell’Innovazi
one
Direzione
generale dei
farmaci e dei
dispositivi
mediciUfficio
III, Vialedella Civiltà
Romana,700144Roma

http://www.salute Assessments of adverse.gov.it/portale/te events, transparent
mi/p2_6.jsp?lingu procurement processes by thea=italiano&id=32 national health system.
8&area=dispositiv
imedici&menu=cla
ssificazione

CPV

Common Procurement The Office for http://simap.euro The CPV establishes a single
Vocabulary (CPV)
Official
pa.eu/codes-and- classification system for publicestablishes a single
nomenclatures/co procurement aimed at

9

Product Classification in Healthcareclassification system
Publications
for publicof theprocurement aimed at
Europeanstandardising theCommunities
references used by(OPOCE)
contracting authorities
and entities to
describe the subjectof procurement
contracts

des-cpv/codescpv_en.htm

standardizing the referencesused by contracting authorities
and entities to describe thesubject of procurement
contracts.

DM&D

The NHS Dictionary of
The dm+dMedicines and Devices Programme(dm+d) contains
Board isunique identifiers
chaired by(codes) andthe Director
associated textualof Medicines,
descriptions for
Pharmacy
representing
and Industry
medicines andGroup,
medical devices in
Department
information systemsof Health.
and electronic
communications.

http://www.dmd.n …a more integrated and safer
hs.uk/index.html healthcare
system…interoperability,
opportunities for comparison
and reducing variation,enhancing patient safety.
The dm+d uses SNOMED-CT
codes throughout to classify
pharmaceuticals. They have also
created a dm+d SNOMED-CT UK
Drug extension which defines
the relationships between
SNOMED-CT identified concepts
This webinar provides an
overview introduction athttps://isd.hscic.gov.uk/trud3/u
ser/guest/group/0/pack/6/subpa
ck/71/releases

eCl@ssStandardized Material
eCl@sshttp://www.eclass. …cross-industry product data
and Service
Association ( de/eclasscontent/st standard for classification andClassification andhttp://wiki.ec andard/search.htm clear description of products andDictionary - crosslass.eu/wiki/
l.en
services. …procurement,
industry product data
controlling and

10

Product Classification in Healthcare
standard for
The_eCl@ss_
classification and clear association)
description of
products and services(GIVD)(previous
ly known
as EDMA)

Global In Vitro
Diagnostic
Classification for
medical devices

distribution…company-wide
process data management aswell as engineering.

European
http://www.edma- … to support the collection andDiagnostic
ivd.eu/index.php?p analysis of market statistics.
Manufacturer age=Global-IVDs Association
Classification(EDMA)

USC

Uniform System of
IMS Health http://www.imshea The USC provides logicalClassification (USC) - Pharmaceutic lth.com/deployedfil groupings of pharmaceuticalprovides logicalal Action
es/ims/Global/Cont products considered to competegroupings ofCommittee ent/Insights/Health in the same or similar markets;
pharmaceutical%20Services%20R each category provides the
products consideredesearch%20Networ manufacturer a solution toto compete
k/USC_Classiificati determine the market share forin the same or similar
on_Process_2011.p their product(s), as well as theirmarkets
df
competitors.

GMDN

Global Medical Device
Nomenclature -To givea common genericdescriptor for medical
devices having similarfeatures,characteristics andintended use forexchange of data
between regulatory
bodies.

GMDN
Agencyhttps://www.gmdn The main purpose of the GMDN
agency.com/
is to provide health authorities
and regulators, health careproviders, medical device
manufacturers and suppliers,
conformity assessment bodies
and others with a single genericnaming system that will support
patient safety. The GMDN isused for:- Data exchange between
manufacturers, regulators andhealthcare authorities

11

Product Classification in Healthcare- Exchange of post-market
vigilance information- Supporting inventory control in
hospitals- Purchasing and supply chain
management
The work was mandated by theEuropean Commission in orderto provide the necessary tool tocarry out the implementation of
the Medical Devices Directive,
including the European
databank for medical devices,
Eudamed.
GPC

Global Product
Classification - A
system that gives acommon language forgrouping products inthe same way

GS1

http://www.gs1.o GPC is the mandatory
rg/gdsn/gpc
classification system for the
GS1 Global Data
Synchronization Network(GDSN).
GPC gives buyers and sellers acommon language to groupproducts the same way
globally to ensure effective
data synchronization in the
Global Data Synchronization
Network (GDSN). GPC enables
the following processes:- Item Registration- Subscription- Validation- Search- Publication/Subscription
Match

12

Product Classification in Healthcare
HCPCS

Healthcare Common
Centers for
Procedure Coding
Medicare andSystem - a
Medicaid
standardized coding
CMS
system for describing
the specific items andservices provided in
the delivery of healthcare

http://www.cms.go Used by healthcare providers in
v/Medicare/Coding claims for reimbursement.
/MedHCPCSGenInf Required by Medicare ando/index.html?redir Medicaid, also used for private
ect=/MedHCPCSGe insurance payers. Mostly
ninfo/
procedures (healthcare services
provided to patients), but also
covers supplies that are
reimbursable.

ICPS

World HealthOrganization (WHO)International
Classification for
Patient Safety Note:
Code still underdevelopment

http://www.who.in a conceptual framework fort/patientsafety/imp reporting and classifying
lementation/taxono incidents, understanding themy/en/
patient safety domain andlearning

MedDRAWHO
Patient
SafetyDrafting
Group

Medical Dictionary for
ICH hasRegulatory Activities – contracted astandardized
Maintenanceinternational medical and Support
terminology for
Services
regulatory
Organization
communication in the – MSSO - toregistration,
maintain,documentation anddevelop andsafety monitoring of
distributemedical product
MedDRA

http://www.meddr …medical terminology toa.org/
facilitate sharing of regulatory
information internationally for
medical products used byhumans. …for use in theregistration, documentation andsafety monitoring of medical
products both before and after a
product has been authorized forsale. Products covered by thescope of MedDRA include
pharmaceuticals, biologics,
vaccines and drug-device
combination products.

13

Product Classification in Healthcare
NAPCS

North American
US Census
http://www.census The long-term objective of
Product Classification
Bureau,.gov/eos/www/nap NAPCS is to develop a marketSystem Identify,
jointly with
cs/index.html
oriented, or demand-based,
define, and classify
like agencies
hierarchical classification system
the final products andof Canada
for products (goods andservices produced and and Mexico
services) that (a) is nottransacted byindustry-of-origin based but canreporting units within
be linked to the NAICS industry
each industry
structure, (b) is consistentacross the three NAICS
countries, and (c) promotes
improvements in theidentification and classificationof service products acrossinternational classification
systems, such as the Central
Product Classification System of
the United Nations.

NHS
eClassThe National Health
NHS-eClass http://www.nhsecl NHS-eClass was designed to
System (NHS)-eClass was operated
ass.nhs.uk/
support the accurate andis a bespoke
for thestandardized classification andclassification system
English NHS
cataloguing of products andfor products andby NHS PASA
services, and to enable a more
services, managed by
but is now
detailed analysis of NHS nonthe English NHS. The administered
pay expenditure below the TFR3
purpose of NHSby NHS
level thereby facilitatingeClass is to facilitate
Sharedimproved contracting focus.
the accurate analysis
Business
In the first instance theof expenditure.
Services.
classification is for members of
the NHS Finance andProcurement Community
Secondly, other recognised user
would include the NHS trading
partners:

14

Product Classification in Healthcare- NHS Services and Solutions
provider- NHS Supply Chain- Suppliers to the NHSOther
public sector procurement
organisations i.e. OGC
NHS-eClass is mapped to the
UNSPSC and TFR/NCA (National
Chart of Accounts)
classifications.
Product
The Product
FDA - Food http://www.fda.go …developed by the Centre for
CodeClassification
and Drugv/medicaldevices/d Devices and Radiological HealthClassificat
Database contains
Administratio eviceregulationand (CDRH) in support of its
ion
medical device namesnguidance/overview mission. The Product Code
Database and their associatedCenter for/classifyyourdevice assigned to a device is based
product codes. The
Devices and/ucm051637.htm upon the medical device productname and productRadiologicalclassification designated undercode identify the
Health21 CFR Parts 862-892.
generic category of adevice for FDA andprovides theregulatory class ofthe group.
SHPA

Society of Hospital
Pharmacists ofAustralia
Note: Does notappear have a code
system at this time.
In 2003 a position
paper referenced GS1
and indicated SHPASHPA The
Society of
Hospital
Pharmacistsof Australia

http://www.shpa.
org.au/15

Product Classification in Healthcare
would monitor forsystems to consider.
SNOMED

The Systematized
IHTSDO®
http://www.ihtsdo.or SNOMED CT contributes to theNomenclature of(Internationalg/snomed-ct/
improvement of patient care by
Medicine (SNOMED)
Healthunderpinning the development ofCT® (SystematizedTerminology
Electronic Health Records that
Nomenclature ofStandards
record clinical information in ways
Medicine- ClinicalDevelopmentthat enable meaning-based
Terms – controlled
Organisation
retrieval. This provides effectivecoded clinical terminology
access to information required forfor use in electronic
decision support and consistent
health records
reporting and analysis. Patients
benefit from the use of SNOMED CT
because it improves the recordingof EHR information and facilitates
better communication, leading to
improvements in the quality of
care.

UMDNS

Universal Medical
Device Nomenclature
System –nomenclature andcomputer coding
system for medical
devices

ECRI
Institute

UNSPSC

United Nations

Managed byhttps://www.ecri.o The purpose of UMDNS is to
rg/Products/Pages/ facilitate identifying, processing,
UMDNS.aspx?sub= filing, storing, retrieving,
Management%20T transferring, and communicating
ools,%20Guideline data about medical devices. Thes,%20Standards,% nomenclature is used in
20and%20Nomencl applications ranging fromature
hospital inventory and workorder controls to national
agency medical device
regulatory systems and from ecommerce and procurement tomedical device databases.
www.unspsc.org

The UNSPSC offers a single

16

Product Classification in HealthcareStandard Products
GS1 US forand Services Code®
the UN(UNSPSC®) is an
Development
open, global, multiProgramme
sector standard for(UNDP)
efficient, accurateclassification of
products and services

global classification system thatcan be used for:- Cost-effective procurement
optimization- Full exploitation of electroniccommerce capabilities
Typically used by purchasingorganizations for spend analysis

Table 2

Recent Developments

Since the introduction of the UDI regulation by the U.S. FDA requires Global Medical Device Nomenclature (GMDN),
it has become more prominent and the use of this system has increased. Additional growth can be expected if othermedical devices regulators also require it for their regulations.
The United Nations Standard Products and Services Code (UNSPSC) has significantly developed its code set for both
Medical Devices and Pharmaceutical products among other categories. This is in response to user demand for
additional classification coverage. Many countries now require its use as part of national government procurement
programmes.

General Recommendation

As previously stated, product classification in the healthcare sector is complex for many valid reasons. However,there are some general practices and principles one must keep in mind when making a recommendation on which
system to use. Below are a few factors to consider.


Regulation: Confirm if there is a particular regulation which mandates a specific system in the target country
or region. For example, the U.S. FDA requires that every manufacturer of medical devices assign a GMDN
code to their product sold in the US, when they register their product and master data in their Global UDI
Database (GUDID). It is important to be aware of current regulations and their requirements. GS1 maintains
17

Product Classification in Healthcarea Public Policy database which contains information on regulations around the world which impact thehealthcare sector -- http://healthcare.gs1.org/pp/
Business Purpose for classification: Certain classification systems have been designed for specificpurposes. Business functions such as Spend Analysis, Procurement and Category Management may requiredifferent classification systems. For example, the Common Procurement Vocabulary (CPV) establishes a single
classification system for public procurement aimed at standardising the references used by contracting
authorities and entities to describe the subject of procurement contracts. The table 2 above contains a listingof systems used in healthcare including their declared purposes. This table is intended to provide a centralized
resource to aid in your research.

Product type: Systems such as GMDN, GMDNS and ATC have been designed for specific product types suchas medical devices and pharmaceuticals. Therefore these systems have a specific declared product type andserve very specific functions and are not interchangeable.



National recommendations: Verify with the local GS1 Healthcare User Group to see if they have agreed orif they recommend a particular classification system nationally. For example GS1 Healthcare US recommends
the use of UNSPSC for the classification of products in the US market. Note that regulations will overridecommercial recommendations.

For additional information regarding this document contact Peter Alvarez at peter.alvarez@gs1.org. For local support
contact your local GS1 Member Organisation.

18