Drug Companies Look to RFID

With a need for greater reliability and accountability in the supply chain, companies in the pharmaceutical industry see RFID as a way to increase the visibility of drugs as they move from manufacturing plants to pharmacy shelves.

The pharmaceutical industry, with its considerable regulatory requirements and liability exposure, is an example of where radio-frequency identification technology can be used to manage supply chain complexities beyond simply moving goods from manufacturer to retail. EPCglobal Inc. standards, for instance, provide a way for RFID users to work with hardware and software vendors to create solutions that fit industry-specific needs.

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Counterfeiting, theft and product recalls present considerable risks for drug producers, distributors and pharmacies as drugs move from production to consumers. The Pharma RFID group, made up of nine companies in the pharmaceuticals market (see graphic, below), is developing RFID standards that will make it easy to see where drugs are in the supply chain and validate whether they are legitimate products.

Pharma RFID is initially focusing on safety and security; logistics and return management; and supply chain streamlining, according to Jamie Hintlian, a partner in the Health & Life Sciences division of Accenture, a technology consulting services company. Accenture formed the Pharma RFID group with drug manufacturers, distributors and pharmacies. eWEEK Labs believes companies should follow the Pharma RFID lead by collaborating on industry-specific RFID solutions.

Drug counterfeiting is becoming an increasing concern in the pharmaceutical industry. “More than ever before, everyone involved in the supply chain is responsible for authenticity,” Hintlian said. For example, legislation such as Floridas drug pedigree law puts the burden on wholesalers to prove a drug is authentic. RFID tags and EPCs (electronic product codes) make it easier to identify and track a single bulk bottle of pills from the manufacturer to the drugstore.

Through EPCglobals user group, companies in vertical industries can collaborate on industrywide implementations to help ensure that vendors work to meet specific vertical needs as well as set more general standards for implementing RFID technology.

RFID tags, when they are combined with “smart shelves” that read tag data in the pharmacy, can help drug companies more effectively execute recalls: Pharmacies just need to run application logic that identifies lots on the shelves to determine if they have a product on hand that needs to be recalled and to verify that those lots have been removed for return.

From a logistics standpoint, RFID has the potential to simplify other returns, such as items that have expired before being fully dispensed, as well as reimbursement.

RFID tags will be decommissioned and returned to manufacturers as part of the process to help close the loop on the dispensing process. When a pharmacy dispenses the first and last pill from a bottle, those transactions are recorded for reporting purposes. With RFID, the final step will be decommissioning the tag on a bottle of pills and returning the tag.

According to Hintlian, process design has been completed for a pilot implementation of Pharma RFID beginning in June or July.

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