RFID technology will be a critical tool for combating drug counterfeiting and improving public safety. The question for pharmaceutical companies is where to start and how best to deploy RFID technology in complex supply chains. This article examines some of the key considerations and opportunities for RFID solutions in the pharmaceutical supply chain.

Symptoms of a Problem

The World Health Organization has estimated that from 5 to 8 percent of the trade in pharmaceuticals worldwide is counterfeit. Given that the pharmaceutical market is over $500 billion worldwide, counterfeiting is clearly a multibillion-dollar problem. Worse, it�€™s a problem that can affect the health and safety of the millions of people who �€“ knowingly or not �€“ purchase counterfeit pharmaceutical products.

The U.S. Food and Drug Administration (FDA) stated in its February 2004 anticounterfeiting report that RFID represents one of the most important tools to help improve the safety of the drug supply chain. Taking it a step further, the FDA has asked pharmaceutical industry players to pilot track-and-trace solutions based on RFID and related technologies such as mass serialization and electronic drug pedigrees by the end of 2007.

Stronger requirements to safeguard the drug supply chain are coming. States, with Florida leading the way, are legislating pharmaceutical product tracking and tracing through the accumulation of a product pedigree, which details specifics about the supply chain history of each drug shipment. Foreign countries, with Italy leading the pack, are also moving in this direction. More state and perhaps national legislation is sure to follow.

In addition industry associations such as the Healthcare Distribution Management Association (HDMA) have published position statements advocating the accelerated adoption of electronic track and trace using EPC tagging. Specifically, the HDMA calls for adoption at the case level by the end of 2005 and at the selling unit level by 2007. At the same time, RFID standards groups such as EPCglobal are quickly exploring what standards and new practices need to be established to adopt electronic track-and-trace technologies throughout the supply chain.

Prescription: RFID-Based Product Authentication and Drug Pedigree

The combination of an attractive, high-dollarvalue target and the relative ease of access to the supply chain puts this industry at high risk economically and legally. Therefore, investment in improved drug counterfeiting countermeasures such as RFID and related technologies is not only a good business decision, but will become mandatory.

Key industry players are already beginning to invest considerable energy and money in deploying RFID. For example, Pfizer announced in November 2004 that it will put RFID tags on all saleable units of Viagra sold in the U.S. by the end of 2005; GlaxoSmithKline has made a similar pledge; and Merck, Novartis and other companies are running a trial that tags individual items to detect dispensing errors and counterfeit drugs before they reach patients.

In fact because many of the large pharmaceuticals are working on multiple RFID projects, Sun Microsystems is helping companies develop a global RFID approach and architecture. Rather than implement separate solutions for each RFID project, we�€™re establishing common shared services and infrastructure that can be used by different RFID applications. As volumes increase and multiple projects come online, a more planned approach helps companies better manage data volumes and leverage enterprise services such as role-based security and back-end integration.

Tackling the Complexities of the Pharma Supply Chain

Specific aspects of the pharmaceutical supply chain can make any type of track-and-trace solution very complex and challenging. The worldwide supply of pharmaceutical products represents a unique case of the manufacturing- distribution-consumption supply chain.

In a general sense pharmaceutical products follow a similar supply path as other retail products. But drugs typically follow a more disjointed supply chain than other manufactured items, often being sold from one distributor to another to balance stocking levels (as many as 10 distributors or wholesalers may handle a drug before it finally gets to a retailer or end user). A given distributor may carry up to 40,000 stock keeping units. And drugs are often repackaged within the supply chain. Maintaining pedigrees on this volume and variety of product can be overwhelming with current identification and tracking methods.

While bar code solutions may cost less in the short term, there are a number of shortcomings, compared with RFID, that limit their effectiveness over time. For example:

• RFID has the capacity to store larger amounts of information and can be read far faster than bar codes (40-plus reads per second, compared with one to two for bar codes), and requires far less human involvement.
• Bar codes require a direct line of sight to be read, while RFID tags do not. In addition, the bar code must be able to survive on multiple types of printed media in harsh conditions, sometimes over long periods of time.

Technological Underpinnings: EPC-Enabled Authentication, Track and Trace

Subsequent to manufacture, pharmaceutical safety depends on critical supply chain controls. �€œTrack and trace�€� attempts to address some of the safety and security issues. For example, pharmaceutical products often require strict control of storage/transportation environments such as temperature. Also, products may have expiration dates beyond which the product should not be dispensed. Track-and-trace processes offer the documentation needed to ensure these safety requirements are met.

However, track and trace in our current environment can be relatively ineffective. For the most part, track and trace is reactive instead of proactive due to the reliance on manual procedures and storage of information on paper. Therefore, the most frequent application of track and trace occurs in drug recalls �€“ where there is an imminent health risk.

Through the use of EPC technology, products can be tracked and traced more easily. Any person who has access to information along the supply chain can find out the historical background on a particular drug, as well as its current location. EPC technology verifies information at every point along the supply chain, which helps ensure product integrity.

EPC technology employs RFID tags, which are physically placed on vials or bottles, drums, boxes, cases and pallets at the beginning of the supply chain. RFID tags are read by RFID readers, which can be placed at fixed locations such as dock doors or can be used in handheld form. The readers and tags collect and convey information all along the supply chain.

In EPC verification, goods are scanned and status is checked. Status can come back as okay, expired or recalled. As products move through the supply chain, the RFID tags enable them to be tracked. Information is gathered about the current location of the shipment and other vital statistics. Figure 1 is based on work Sun did with MIT Auto-ID Center (now MIT Auto-ID Labs) to investigate opportunities for securing the pharma supply chain.