News

Posted On: 04/18/2007

Study Cites Pharma's Top Roadblocks to RFID

PharmaManufacturing.com

Health Industry Insights, a market research firm, on Apr. 18 announced survey findings that identify the top factors contributing to pharmaceutical industry's slow adoption of radio frequency identification (RFID). Results from a survey of 143 life sciences industry leaders names technology cost and lack of demonstrated return on investment (ROI) as the number one roadblock contributing to slow RFID adoption, followed closely by the lack of an item-level frequency standard. Other reasons, in order of importance, cited by respondents include security/privacy concerns, lack of pressure from Federal Drug Administration, and unreliable read rates (i.e., the percentage of RFID tags, or microchips attached to an antenna, that can be accurately read within a certain period of time).

"While many pharmaceutical companies are eager to begin their RFID pilot work, we're seeing a freeze on project funding until an item-level frequency standard is established. Evaluations are being hindered by corporate fear of investing in the wrong infrastructure," says Eric Newmark, senior research analyst at Health Industry Insights. "It is unfortunate that patient and consumer safety is being delayed due to something this trivial."

The report goes on to spotlight the slower-than-expected RFID adoption with additional survey findings. Results reveal less than one in five (16%) pharmaceutical companies are currently evaluating the benefits of RFID technology, and even fewer (15%) companies adopting RFID in some capacity. Overall, the report indicates average life science company spend on RFID technology is approximately $25,000, although this level is expected to triple to $75,000 over the next 12 months.

dditionally, the report discusses read rate results from commercial RFID pilots in the pharmaceutical industry. The report reveals that initiatives utilizing high-frequency (HF) technology for item-level tagging are achieving better read rates than those using ultra-high frequency (UHF). Findings show initiatives using HF are experiencing read rates in the Four to Six Sigma (a well-know management practice used to help companies achieve exceptional performance levels) range, and exceeding Six Sigma in some cases, whereas those using UHF are typically between Three and Four Sigma.