Drug counterfeiting is on the rise throughout the world, as organized crime and individual opportunists exploit cracks in the pharmaceutical supply chain. The World Health Organization (WHO, Geneva, Switzerland) estimates that drug counterfeiting is now a $35 billion-per-year global business. If its growth continues at this pace, sales of fake pharmaceuticals may double over the next five years. We will have reached the point where one in five consumers of medicine takes a fake drug, as Pfizers senior vice president Robert Mallett reportedly told attendees at the Global Congress on Combating Counterfeiting and Piracy in Geneva last January.
According to WHO, counterfeit drugs only make up 1% or less of the market value in most developed countries with effective regulatory systems and market control. This relatively small group includes the U.S., the European Union, Australia, Canada, Japan and New Zealand. In many developing nations, though, a reasonable estimate would be between 10% and 30% counterfeit. And even in the U.S., the number of counterfeit drug cases is increasing; since 2005, they have involved such products as Percocet, Celebrex, Viagra, Cialis, Lipitor, Risperdal, Zyprexa and Procrit.
However, new track-and-trace technologies have proven their worth during pharma pilot tests and trials, and some systems based on RFID, barcodes, serialization and electronic pedigrees (e-pedigrees) promise to seal these pharma supply chain cracks, one by one.
Transparency the Goal
In January 2006, Pfizer became one of the first drug manufacturers to implement a track-and-trace pilot program using Radio Frequency Identification (RFID) tags for Viagra. Patient safety has been our primary driver, said Peggy Staver, Pfizers director of product integrity during a recent web conference. This is to deter and prevent counterfeiting through technology. We want authentic Pfizer product moving through a transparent supply chain. Pfizer's installation uses software developed by Supply Scape and Systech, and tags developed by Tagsys and Alien Technologies.
The Heat Is On
Several U.S. states, the Food and Drug Administration (FDA) and even Congress are pressuring pharmaceutical companies to plug the holes in the distribution network. For example, Florida has already implemented drug pedigrees and California will require them (along with serialization) in 2009 (www.pharmamanufacturing.com/articles/2007/041.html). A drug pedigree is a record of each distribution of a prescription drug from its sale by a manufacturer through acquisition and sale by any wholesale distributor until final sale to a pharmacy or other authorized person administering or dispensing drugs. The pedigrees, the subject of much debate, are designed to prevent counterfeit drugs from entering the system.
Pedigrees can be maintained in the form of paper documentation, but experts in pharmaceutical supply chain security have long recommended that e-pedigrees be established to minimize risk. Years of development culminated this January, when the GS1 EPC global drug pedigree standard was established to codify, digitally, the processes and transactions involved in distributing pharmaceuticals.
In March, California's Board of Pharmacy formally accepted that standard as meeting its requirements. As a result, a growing number of drug manufacturers and distributors are providing e-pedigrees. SupplyScape is currently offering its e-pedigree solution to 45 pharmaceutical manufacturers and distributors---not only Pfizer, but Purdue Pharma and U.S. Oncology (Houston), which became the first oncology drug distributor to provide e-pedigrees this March. The process allows U.S. Oncology to provide e-pedigrees to affiliated physicians and manages the pedigrees in a central repository. Thus far, the company has shipped six million oncology units with e-pedigrees.
In the next quarter, AstraZeneca (York, U.K.) will implement a comprehensive system to serialize and authenticate its Nexium product down to the unit level. Initially, we aim to adopt a bookend strategy, says David Teale, product security director for AstraZeneca. That is, placing tamper-evident security seals (TESS) and unique carton numbers (UCN) on each item at the time of manufacture, and working with industry bodies, other pharma companies and government agencies to move towards authenticating the product at the time of dispensing.
The serialized authentication program for Nexium assigns unique serialized codes to each tablet blister pack via the carton (embedded on a two-dimensional data-matrix code) and the tamper seal. Once the code is assigned, it is activated, validated and entered into a database, where it can be cross-checked against all serialized codes throughout the AstraZeneca supply chain. In November 2006, the European Federation of Pharmaceutical Industries and Associations (EFPIA) endorsed serialization as the most promising solution to fight counterfeiting. It maintains it will work easily with RFID technologies when RFID matures.
Last June, the FDAs Counterfeit Drug Task Force recommended the use of RFID to track and trace drugs through the pharmaceutical distribution chain. While the FDA did not mandate RFID, it did point to the technology as the most promising technology for implementing electronic track and trace in the drug supply chain, and suggested that stakeholders move quickly to implement this technology. However, the FDA also recognized that the goals can also be achieved by using other technologies, such as 2D barcodes. The FDA envisions a hybrid environment of electronic and paper pedigrees and the use of RFID and barcodes in the near future. Its plan to implement pedigree requirements on Dec. 1, 2006 hit a snag when a U.S. federal court granted an injunction regarding these requirements.
In the meantime, a U.S. Senate bill has been introduced with a goal to help stop disreputable Internet pharmacies and improve drug safety for consumers. The Safe Internet Pharmacy Act of 2007, S.596, brought out by Senators Judd Gregg (R-N.H.) and Gordon Smith (R-Ore.) on Feb. 15, does not specifically name RFID, but calls for track-and-trace technologies to be used on drug shipments. The bill would require Internet pharmacies to affix to each shipping container of drugs shipped in the United States such markings as the Secretary determines to be necessary to identify that the shipment is from a licensed pharmacy, which may include anticounterfeiting or track-and-trace technologies. The bill has been referred to the Senate Committee on Health, Education, Labor and Pensions for review and could be rolled into the Prescription Drug User Fee Act that is up for reauthorization at the end of September.
Drug manufacturers, working with equipment suppliers and even chip makers, are introducing products and engaging in pilots to ramp up their supply chain efficiency and security measures. For example, Purdue Pharma (Stamford, Conn.) will integrate Impinjs (Seattle, Wash.) Gen 2 RFID products into its OxyContin lines starting in the second quarter. The full-scale implementation will tag every bottle and case of the product with an EPCglobal Class 1 Gen 2 tag.
The Gen 2 specification is a UHF (ultra-high frequency) air interface protocol. According to Vince Moretti, vice president of RFID systems at Impinj, the use of UHF tags and readers provides significant speed and cost advantages over HF (high frequency) methods. There seems to be a tide shift toward UHF, says Moretti. HF is limited to 120 bottles per minute on production lines.
In demonstrations conducted by Impinj and the HealthCare Packing division of Owens-Illinois (O-I), a near-field UHF Gen 2 RFID solution using Impinjs readers and chips and O-Is item-level embedded tags achieved rates exceeding 550 tags per minute on bottles containing liquids, gel caps, solids and powders.
There are no line impediments. Reading, writing and verifying can be accomplished with no loss of speed, says Brian J. Chisholm, new product development engineer at O-I. The tag is well protected inside the bottle and always presented in the same orientation. (An example of a tagged bottle is shown below.)
Item-level embedded tags (as above) from the HealthCare Packing division of Owens-Illinois (O-I), used in conjunction with UHF Gen 2 readers from Impinj, have achieved read rates exceeding 550 tags per minute.
Intel Corp. (Santa Clara, Calif.) hopes to fill the demand for UHF reader technology by launching a UHF RFID reader chip in March. The R1000 chip integrates over 100 integrated circuits onto a single piece of silicon. The UHF reader market is an untapped environment from a chip perspective. A single chip will drive the cost of these readers down, says Mike Reed, Intel RFID Operation general manager.
The Intel chip is packaged with several development tools that speed time-to-market for reader OEMs and are designed to ease reader deployment, provisioning and remote management for end-users. According to Reed, the new chip will bring UHF readers in line with the mature HF readers in terms of cost and complexity. Ten readers built with this chip will ship by the end of the second quarter, with another 10 scheduled to launch by the end of the year. The use of RFID chips brings life to a passive object. Products are just starting to tap their potential, Reed says.
The accuracy of an RFID infrastructure is also improving. Tagsys (Cambridge, Mass.), an item-level manufacturer of RFID tags and readers, announced in March its RFID Six Sigma Performance program for pharmaceutical manufacturers. The program guarantees fewer than four failures in one million read opportunities in the item-level track-and-trace process. Achieving Six Sigma performance levels from the RFID infrastructure is key to meeting regulatory, liability or chain-of-custody requirements, says John Jordan, TAGSYS president.
RFID and the Little Blue Pill
One of the leaders in the U.S. market for RFID tagging in the pharmaceutical industry has been Pfizer. The company uses HF tags at the item (bottle) level and UHF tags at the pallet level for its Viagra product. In addition, a 2D data barcode is used as a redundant back-up system to the RFID tag. There is a unique electronic product code on every bottle moving down the production line. Even though these bottles dont usually go to consumers, the label discloses that there is an RFID device embedded in the label. According to Staver, this is to err on the side of the patients right to privacy, a concern often cited as a negative to RFID.
As of September 2006, over 2 million bottles of Viagra have been shipped with tags. RFID implementation is complex and costly to implement, says Staver. It has cost us nearly $5 million to implement just in the U.S. market. Instead of taking a wait-and-see approach, we decided to invest early on, to gain valuable experience.
This experience will help them get a leg up on the competition. Pfizer has already decided to move its labels from the top to the side of cases to foster higher read rates. In 2007, Pfizer also will be looking at issues concerning digital signatures and certificate authority. A side benefit to improved security would be improving operational efficiency, using RFID to improve its shipping and receiving processes.
Hedging Bets on Technology
The HF vs. UHF RFID debate for item-level tagging is still causing concern, and may prevent some manufacturers from even evaluating RFID. Without supply chain-wide adoption and collaboration, prices for the technology will remain high. We shouldnt be worrying about frequency but about performance, says Tagsys Jordan. In what other business do you worry about such issues as this?
These types of issues might have kept AstraZeneca from implementing RFID. We believe that the 2D matrix [currently] offers the capability to identify products down to the item level and that RFID technology is insufficiently mature to support mass serialization within the pharmaceutical industry at the item level, says AstraZenecas Teale. However, the system we are developing will work with RFID technology when it matures.
While keeping the supply chain and consumers safe and secure is a key industry concern, pharmas RFID adoption rate is still slow. Other value drivers might help spur future growth.
IDTechEx RFID Players and Opportunities, 2007-2017 report (www.idtechex.com/forecasts) examined some of these drivers. According to the report, 15 million tags were deployed on drugs in 2006 with $3.5 million spent on these tags. This figure lags significantly behind retail apparel and books (both at 50 million tags supplied in 2006). Of these drug tags, an estimated five million were put on bottles of Viagra alone. For the most part, this slow adoption rate is due to the cost and significant process changes needed to enable RFID in a facility.
Volume drives prices down, says Vince Moretti, vice president of RFID systems at Impinj. Global standards and economies of scale are key to keeping costs low.
But improved patient safety and more efficient distribution will also be value drivers for pharmas RFID use, says Paul Fowler, vice president of healthcare strategy for Axway, Inc. (Scottsdale, Ariz.). Fowler has seen the issue from all sides in his career; he spent 10 years in direct patient care, another 10 years as a healthcare professional working in the medical diagnostics instruments division of Abbott Laboratories (Abbott Park, Ill.) and 12 years at McKesson Corp. (San Francisco, Calif.) as the vice president of e-commerce and emerging technologies. At McKesson, he championed RFID technologies.
Fortunately, there have been only 58 documented counterfeit drug cases (in the U.S.), says Fowler, but real patient safety at hospitals would be key benefit of RFID tags. According to the Institute of Medicine of the National Academies, at least 44,000 people and perhaps as many as 98,000 people, die in hospitals each year as a result of preventable medical errors. For example, if drugs were tagged, there would be little chance of a child in a hospital nursery receiving an older childs or adult dosage. The automation of patient safety is possible with RFID. This is difficult to accomplish with 2D barcodes and rather simple with RFID, says Fowler. He cites other areas where RFID would help:
Cold chain management ensuring the quality and safety of drugs by providing visibility into environmental conditions during shipment and storage.
Reverse logistics redistributing expiring drugs. It is estimated that $3 billion worth of drugs are wasted every year.
Inventory management knowing when and where the drugs are needed.
Just 10 years ago, you could only get drugs directly from a pharmacy. Now you can buy them at a grocery store, retailer, everywhere, says Fowler. The distribution points have exploded and there is money to be saved.