Tuning in to the Drug Safety Frequency

In the pharmaceutical industry, counterfeiting is widespread, particularly with the advent of the Internet. In fact, the World Health Organization estimates that up to 8 percent of the trade in worldwide pharmaceuticals is counterfeit, making counterfeiting a multibillion-dollar problem. Beyond economics, counterfeit pharmaceuticals can cause health and safety problems for millions of customers.

Tracking legitimate drugs, too, is a complicated, cumbersome process. Medications are often distributed and repackaged at multiple points in the supply chain, with sales made to various distributors along the way to balance stocking levels before a drug ever reaches its final destination in a retail pharmacy. At any given time, distributors can carry up to 40,000 units of a drug, which makes tracking the lineage of the drug and maintaining the security for it an overwhelming process.

In an attempt to combat the problem, the U.S. Food and Drug Administration set guidelines for the use of radio frequency identification (RFID) technology as a way to help pharmaceutical companies block counterfeiters. Tiny transponders that can be embedded in tags or packaging instantly transmit a unique ID code when they come in range of an RFID reader. The code can be matched to a database entry containing information relating to the item that bears the tag.

RFID technology is a leap ahead of bar codes, long considered the best method for tracking and tracing in a manufacturing-distribution-consumption supply chain. RFID can store far larger amounts of information than bar codes can, and can be read very quickly (40-plus reads per second compared to 1 or 2 per second with bar codes). Plus, no direct line of sight is required to read an RFID tag – it must only be within range of the reader for automatic scanning to occur.

As a result, RFID tags can help pharmaceutical companies control bulk inventories and track shipments more effectively. Product recalls, too, are much easier to handle if RFID tags are used with a drug; RFID tagging can provide greater control of an entire batch lot that might be designated as contaminated.

The pharmaceutical industry has encountered roadblocks to 100-percent adoption of RFID. Primarily, all parts of the supply chain need to invest in compatible technology and agree to share data in common formats. To date, there are no agreed-upon industry standards that would accomplish that.

Second, RFID requires a base, industry-wide infrastructure that is costly. As a result, many pharmaceutical companies are having a tough time creating a strong business case to support implementation of RFID technology for all product lines. Until costs come down for the technology and key standards are accepted, it's unlikely that the technology will be adopted industry-wide.

Still, several pharmaceutical companies are pioneering the use of the technology by establishing pilot programs for specific drugs. GSK, for example, began distributing its HIV medication Trizivir with RFID tags in 2006. Kalorama Information is predicting aggressive growth for RFID technology in the pharmaceutical industry over the next five years, citing plummeting hardware costs (drops as much as 80 percent) as a key factor in the surge. In addition, RFID manufacturers are specifically targeting the pharmaceutical industry with specialized equipment, making it likely that RFID will catch on more rapidly for pharmaceutical companies in the coming years.

That's a strong probability according to Kalorama, who says that at least one quarter of major pharmaceutical companies will implement large-scale RFID projects soon in order to reduce costs, improve inventory control and better manage drug distribution. With a rapidly aging U.S. population accelerating demand for a variety of prescription drugs, the move comes at an opportune time.

The Connors Group provides IT staffing for biotech and pharmaceutical organizations. Contact Sheri Breitstein, Vice President of Client Development at The Connors Group, at sheri@theconnorsgroup.com or 201-537-0030.