The pharmaceutical industry is set to boost its use of radio frequency identification device (RFID) technology over the next 18 months, according to research group Meta. The move is being driven by the potential cost savings, the analysts said.
A study conducted by Meta confirmed that pharmaceutical organisations have already been using RFID technology for a number of years in "niche applications such as tracking lab samples", and now are beginning to consider the possible benefits of RFID use in tracking "finished products"
META said the cost of tagging pharmaceuticals is offset by the products' high value, adding that the US Food and Drug Administration (FDA) has also offered its support for use of the technology in tracking drug supply chains.
A recent report by the FDA predicted that pharmaceutical companies will execute full scale pallet and case level RFID tagging for most products within the next three years, according to Meta. However, the analysts said they believed implementation would take longer than that.
META claims the technology that the FDA said would be used by the industry -- electronic product coding (EPC) - is still too "immature".
"The inherent problem with EPC technology, from a pharmaceutical perspective, is the lack of anti-cloning features in the EPC chip itself," said Bruce Hudson, program director with META Group's Enterprise Application Strategies service.
"With current EPC specifications, it is possible to program one chip with the exact data of another, effectively cloning the first chip. Without guaranteed authentication, the usefulness of RFID is significantly reduced," he said.
According to Meta, RFID use within the pharmaceutical industry will most likely be limited to a "track and trace" role in the short term until the EPC technology is updated, which it claims could take up to two years.
The group said that, once implemented, RFID technology could provide a return on investment in five key areas, including inventory management, as it would facilitate individualised expiration dates on each product subject to its environmental effects and ingredients; and recalls would also be made easier with products that are identified quickly with RFID technology.
Other benefits include patient safety, according to META, as the combination of RFID tagged drugs with other identification measures, such as patient information, could prevent drug errors and patients having adverse reactions to medications that they shouldn't be taking.
RFID technology could also present cost savings by tracking drug shipments from one country to another, reducing what META calls the size of the "grey market"; also the technology could reduce the incidence of drug counterfeiting.
"Because of the compelling ROI [return on investment] for pharmaceutical organisations and their distributors, RFID use in the pharma industry will surpass that of CPG [consumer packaged goods] companies within 18 months," said Hudson.
"However, major issues need to be addressed before we see full-scale deployment. In addition to authentication issues, the industry must address the validation of RFID systems by the FDA, the unknown impact of radio frequency energy on drugs, and data management in light of competitors," he said.