RFID Makes a Slight Comeback: Implications for the Life Sciences Supply Chain

Feb. 16, 2011

By Jeremy Friedler, Senior Consultant for Supply Chain, Maxiom Group (www.maxiomgroup.com)

[Editor's Note: This article originally appeared on the Maxiom Group blog. Permission to republish has been granted by Maxiom Group.]

A few years ago, multiple experts and executives across industry verticals almost entirely dismissed the broad application and adoption of RFID technology. Citing such issues as an inability to scale, ineffective integration with existing technology, and potential consumer privacy issues, this once paradigm shifting technology was thought to have limited practical use. However, a recent resurgence of RFID, most notably led by a ramp up in production and sales of RFID tags by Seattle-based Impinj, has led some to believe that the promise of the technology may have reached a tipping point. This proves that amazing things can happen with revolutionary technologies when everyone takes a deep breath, relaxes, and remains patient. The positive news from Impinj is critical for companies in multiple industries. However, it also holds significant promise for the Healthcare and Life Sciences industries, particularly with regards to the security and efficiency of pharmaceutical supply chains.

Visibility of finished goods flowing through the supply chain still remains a critical issue for many pharmaceutical and biotechnology manufacturers. The alarming abundance of counterfeit pharmaceutical products within both industrialized and emerging markets has grown tremendously in the past 10 years.  However, the limited availability of solutions to provide complete end to end visibility leaves room for concern, especially given the critical importance of pharmaceutical supply chain security. At present, RFID could be one of the most advanced technologies available to provide increased visibility into counterfeit products entering the supply chain while simultaneously protecting the integrity of therapeutics en route to the patient.

Another potential use for RFID within the pharmaceutical industry is to track consumption of therapeutics at the patient level. Currently, most commercial supply chains only track material to the wholesaler level. Once product is distributed from the manufacturer to the wholesaler, most pharmaceutical companies feel the job is complete, with the wholesaler taking care of the various downstream distribution nodes to complete the supply chain (i.e. retail/specialty pharmacies and hospitals). However, being that the patient is the end customer, pharmaceutical manufacturers need to learn to track use of various therapies at the patient level at the moment of consumption and immediately transmit that information back to the manufacturer. The uninterrupted flow of information will help to more accurately plan production and utilize (or possibly reduce) finished goods inventory levels to match patient demand. RFID utilization could consistently enable this type of information flow between the patient and manufacturer. Furthermore, RFID could allow for significant reductions in cost  while ensuring that the therapeutic is available to the patient at the time of the next scheduled dosing or refill, ultimately creating a Walmart type fulfillment and replenishment system within the Healthcare industry.

Looking beyond RFID, nanotechnology has begun to emerge as a next generation solution for supply chain efficiency. Although still in its infancy, solutions such as Micro Electro Mechanical Systems (MEMS), a form of nanotechnology-based sensors (which has also given birth to a whole new category of MEMS for advanced medical technologies known as BioMEMS) are being utilized in laser scanners that can read bar codes up to 40 times faster at 1/66th the size of conventional scanner sensors. This could improve the speed and reporting a vast array of complex information within the pharmaceutical supply chain, allowing a manufacturer to better adapt and become more agile to patient requirements and demand.

Could broader adoption of RFID and other emerging technologies applicable to supply chain management be a catalyst for change needed within the industry with respect to security, efficiency, reducing the cost to serve, and improving patient care? Are there other instances that RFID could be utilized within the pharmaceutical industry or within the scope of the broader healthcare industry (i.e. hospitals)? We would like to hear your input.