Despite the benefits that radio frequency identification (RFID) offers, most pharmaceutical manufacturers are still reluctant to invest in a costly, unproven technology. As more data are gathered on RFID's long-term costs and benefits, new smart-tag technologies offer manufacturers an "RFID Lite" offering many of the benefits of a full-blown active RFID system for a fraction of the cost. Smart labels are thin devices with both a power source and integrated circuit that can remotely monitor, process, store, and, in some cases, transmit information.
Pharmaceutical companies will first embrace smart-tag technology this year, and become comfortable with it by 2006, according to the market research firm Accenture. The technology will save them over $8 billion/year, Accenture predicts, and offer an average 50% annual return on investment.
The most significant gains would be seen in tracking lots and recalls, preventing counterfeits, and managing inventory, according to Accenture consultant Lyle Ginsberg, who presented findings this past summer at the National Association of Chain Drug Stores' pharmacy and technology conference in Philadelphia. Accenture has worked with AstraZeneca, Procter & Gamble and Johnson & Johnson in initial smart-label evaluation, with the distributors McKesson and Cardinal Health, and with the retailers Wal-Mart and CVS. Wal-Mart is in the midst of a massive RFID deployment, and its suppliers of over-the-counter medications already have a jump start in applying RFID smart label technology
While Massachusetts Institute of Technology's Auto-ID Laboratory continues to develop global standards for electronic product codes (EPC) and smart tags, vendors are developing standards for sensor RFID labels, materials, protocols, data structures and compliance testing through the Smart Active Labels Consortium, Wakefield, Mass.(www.sal-c.org) , a group established last year.
In pilot studies, smart labels already are showing promise. A glimpse of the future can be seen in DRIVE, Drugs in the Virtual Enterprise, an R&D project launched last year in Italy, funded by the European Commission and involving Astra Zeneca and Glaxo Smith Kline (See news article).
As part of DRIVE, some 600 patients at San Raffaele hospital in Milan, Italy, were given bracelets read by smart medicine carts. The first phase of the project, using two-dimensional bar coding for patient bracelets and labels, saw significant reductions in medication errors, as well as manufacturing costs. Now, phase two of the project will use RFID for both bracelets and tags. The new tags are being installed and will allow extensive cost-benefit data to be gathered.
Based on preliminary results and limited data, RFID appears to offer a one-stop solution for smart tagging, improving patient safety, logistics and fighting drug counterfeits, says DRIVE project director Alberto Sanna. "The paybacks considered are significantly higher than those for any optical solutions," he says. Results are expected next year.
Smart RFID labels are already being used by the Italian drug manufacturer Pierrel-Ospedali, to tag products that require careful sterilization, according to Susy d'Hont, product manager with Texas Instruments, Dallas.
Containers are tagged with a product code including an ID number and time and date stamp, and enter the company's autoclave on steel racks, each of which is tagged with a transponder. The new system, so far, has freed up two to three employees to perform other tasks, and has allowed the company to guarantee compliance and on-time delivery. The company had first used barcodes, but they couldn't tolerate the heat and process conditions, D'Hont says.
Further down the distribution chain, the German wholesaler, Sanacorp switched from barcodes to RFID to track order fulfillment at its warehouses, reducing error rates from 1% to 0.01%.
New smart-label platforms also are being introduced. On the process manufacturing side, Colder Products, St. Paul, Minn., has introduced what it calls smart-coupling technology, incorporating RFID labels and readers to prevent misconnections during fluid processing.
One difference between static barcode databases and RFID systems is that RFID generates much more data. More software companies offer middleware to connect enterprise resource planning (ERP) platforms to RFID databases. This quarter, SAP announced that it plans to build an RFID-ready component into its flagship product, R/3.
Clearly, interest in RFID is increasing. As cost-effective solutions come to market, the technology promises to play a key role in every facet of pharmaceutical manufacturing.