FDA Report Supports Use of RFID

Feb. 1, 2004
On February 18, the U.S. Food and Drug Administration's (FDA) Counterfeit Drug Task Force released its final recommendations for securing the pharmaceutical supply chain. The report found that radiofrequency identification (RFID) and other trace and track technologies could help companies preserve the integrity of their pharmaceutical products.

The report promises to increase interest in these technologies. However, at this point, RFID study and implementation have been "piecemeal and loosely coordinated," according to Andrew Gill, a principal with PA Consulting Group (London).

Companies should not be enticed by "low-cost tag hype," and make sure that the technology best meets their needs, according to a study released that same day by the market analysts, Meta Group. "Even smaller RFID projects can significantly affect IT infrastructure, so a readiness assessment must be performed early on," according to Meta analyst Gene Alvarez, vice president for the firm's Technology Research Services division. "Starting with small projects will assist enterprises in establishing standards."

A number of projects are underway to help pharmaceutical manufacturers evaluate RFID. The consulting firm Accenture is serving as program manager for a group that will explore the use of RFID and electronic product code (EPC) in the pharmaceutical supply chain. Group members include Abbott Laboratories, Barr Pharmaceuticals, Pfizer, Johnson & Johnson as well as distributors, retailers and trade groups.

The group plans to test how RFID can improve expiration-date management, lot and batch tracking, returns management processing, operational integrity, product security, and consumer safety. "The program's goal is to explore the benefits that full adoption of this emerging technology could bring to consumers as well as companies throughout the pharmaceutical supply chain," according to Lyle Ginsburg, a partner in Accenture's Products Operating Group. The group plans to share its findings with the industry.

In the U.K., PA Consulting Group has launched a pilot program, "Authentication at the Point of Dispensing," to see how RFID may improve supply chain safety. So far, four global pharmaceutical companies, two of them based in the U.S., are involved in the project (Diagram).

In Phase 1 of the project, manufacturers will tag an appropriate number of products and develop a database with critical information about those products. Pharmacies would be equipped with scanners allowing them to read both the RFID and any barcoding on the packaging. Each manufacturer would decide upon which products to tag and what type of tag to use. However, says PA Consulting's Rob Whewell, drugs used to treat chronic conditions are the most likely candidates, since they're the most attractive targets for counterfeiters.

The pilot is being run in the U.K. where drugs are not typically dispensed in bulk, but, rather, in individual packages directly at the pharmacist level.

Costs for implementing the technologies are difficult to pin down, and depend on the product and perceived needs, PA's Whewall says. The temperature-resistant tags required for cold-storage drugs, for example, are expensive, but others offer a wide range of capabilities. Moreover, alternatives such as barcoding can involve hidden costs---e.g., for individual product scanning and printing readability problems.

At this point, Whewall says, the project is ignoring the question of costs. "We need to prove that this concept works, and that it's practical at the pharmacy and manufacturing-plant levels."