This invention relates to a smart IV bag with a structurally integrated optical tag for IV drug identification and monitoring. The optical tag comprises a flow cell with a fluid channel in communication with the IV bag to sample a portion of the IV fluid onto an optical surface embedded in the flow cell. The optical surface causes a light beam to interact with the sampled IV fluid to produce a spectroscopic signal. The spectroscopic signal is then analyzed to obtain the content and concentration information of the IV fluid. Unlike traditional IV bag labels, the optical tag provides real-time, in-situ monitoring of IV fluid content and concentration, which greatly reduces the risk of mislabeling induced IV error.