RFID and the Future of Pharmaceutical Supply Chains

March 24, 2006
Pharmaceutical Technology Editors

ePT--the Electronic Newsletter of Pharmaceutical Technology

RFID and the Future of Pharmaceutical Supply Chains

There was quite an upsurge in products and vendors focusing on radio frequency identification (RFID) at Interphex this year. An entire section of IT was dedicated to the emerging technology focusing on the need for a track-and-trace solution to help combat counterfeiting and diversion of drug product.

Mark Roberti, founder and editor of RFID Journal, was on hand Tuesday morning at Interphex advising pharmaceutical executives and IT personnel about how RFID can be implemented to secure their supply chain and provide a strong e-pedigree system.

RFID is a general term that defines the ability to identify an object remotely using radio waves to transfer information. Data are usually stored on microchips using active or passive tags that can be read using a variety of frequencies.

Active tags include a power source and transmitter for broadcasting with a typical range of 300 ft. Operating similarly to the EZPass toll system, these tags can track high-value assets and can be traced with real-time locating systems.

Far cheaper are passive tags, which have no battery, draw power from the reader, and reflect back a signal. These tags also have a far shorter signal with a typical read range of 15-20 ft.

Roberti explained that the passive tag is made up of several parts, including a microchip that stores data and modulates an antenna that gathers RF energy and reflects back signals, and a protective layer/packaging.

Information on both passive and active tags can be transcribed by a reader that emits radio waves. The tag converts the RF electricity to power up the microchip that then modulates and demodulates the antenna and reflects back a signal. The reader then converts these waves into readable data.

“The technology has been around since the 1970s, but several things have changed,” Roberti said. “Prices of RFID tags are falling, standards are emerging, and the Internet and other infrastructure make it possible to share data. RFID is taking off now because of the ability to connect to the Internet… It’s about information constantly moving.”

According to Roberti, the pharmaceutical industry is at the forefront of adoption for several reasons.

• Counterfeiting is a growing problem.

• States are introducing regulations requiring drug e-pedigrees.

• Retailers are requiring RFID.

Purdue Pharma is one of the first companies to put item-level tagging into production, having tagged bottles of the highly-counterfeited “Oxycontin” for retail juggernaut Wal-Mart. Purdue checks all labels after application to ensure 100% readability. According to Roberti, as much as 20% of all tags fail due to damage in shipment and temperature flux. If there is a problem, then the line stops and the bottle is relabeled.

In 2005, Purdue and HD Smith ran a three-month e-pedigree pilot. An electronic pedigree was created at the point-of-goods issue. All items were scanned, and their electronic product codes (EPC) were recorded and associated with shipment to HD Smith. Roberti said that the EPC numbers, product information, and transaction data were stored in the e-pedigree document.

In addition, Purdue puts a digital signature on the e-pedigree when it’s sent to HD Smith in the product code. HD Smith then confirms the authenticity of pedigree. When the product is received, the EPC numbers are checked against pedigree, and the pedigree is signed digitally. The chain of custody is then transferred to HD Smith.

For adoption of RFID to take off, e-pedigree standards must be established and the pharmaceutical industry must agree on which frequency to use, Roberti said. “The price of tags and readers must fall further, and companies must agree on standards and sharing data.”

There are still many challenges ahead for pharmaceutical manufacturers: RFID needs to be integrated with manufacturing; IT systems must be modified to handle e-predigrees; business processes need to take advantage of RFID data; and collaborations with supply chain partners should be established.

According to recent reports, the pharmaceutical industry has been very slow in adopting RFID. Can the technology be fully implemented without an industry leader to mandate it like Wal-Mart did for the retail industry?

Roberti said that FDA is well on its way to mandating RFID. With individual states creating their own laws for electronic pedigree, FDA will want to reign in legislation at the national level, Roberti said, citing recent legislative proposals as examples.

Brad Todd, a product manager at Escort Memory Systems, told Pharmaceutical Technology that there are companies within the pharmaceutical industry that use RFID internally for pill dispensing and monitoring, but a full-blown vertical supply-chain rollout is pending adoption of standards. “Until FDA moves-until we have some broader consensus in the industry-we don’t see anything more than pilots going on,” Todd said.

There was also a belief among a few vendors that it would take a pandemic to jump start a large-scale RFID implementation. Some even stated, off-the-record, that “Tamiflu” may be the drug that sets things off, when or if the threat of bird flu strikes the United States. “If people become afraid that they will get sick, they will start hoarding vaccines, and counterfeit drugs will start appearing left and right,” one vendor said. “That’s when RFID will be taken seriously.”