DPT Tries a Dose of RFID

Green believes the expense will ultimately get rolled up into the cost of prescription drugs. "Eventually, the consumers are going to have to pay," he says.

It's those high costs that have some drug companies looking intently at 2-D bar codes, which Green says cost considerably less than RFID tags. Printing a 2-D bar code on a label costs about one-tenth of a cent, Green notes, whereas the price of RFID tags—even at high volumes—is still as much as 5 cents per tag.

The problem with 2-D bar codes is that unless inference is allowed, cases will have to be opened at each point along a supply chain, in order to manually read individual items' bar codes and ensure that each case actually contains the items indicated by the case label. Inference would enable a distributor, for example, to accept a trusted manufacturer's shipping notices listing the items in each case, and to presuppose, for instance, that a case expected to contain 72 items does, indeed, contain that quantity. The California legislation neither prohibits nor condones inference, and Green says no clear decision has yet been made.

If inference is not allowed, Green also says it is likely that "the major wholesalers and distributors, although they haven't said it yet, will charge manufacturers if they have to rely on line-of-sight processes to scan bar codes." What's more, he adds, there is already significant influence from major retailers (including Wal-Mart and others) to use RFID since those companies are already making big investments in the technology and already require suppliers to use EPC Gen 2 tags on cases and pallets. "I think the wrinkle here is that wholesalers and distributors and big retailers will demand the use of RFID," he says.

Regardless, Green indicates, DPT Laboratories and its customers are closely watching what the FDA will do. And with California's law looming, they'll need to be ready. "The obvious is that eventually, this [serialization and e-pedigrees] will be as common as putting a cap on a tube," he states. "It will be a necessity, a fact of life. But I'm going to be looking beyond the obvious to find ways to use the technology to improve our inventory control, to be able to take physical inventory in no time at all, and to improve traceability of all our goods, both raw materials and finished goods. Whether we get 100 percent return on our investment, I don't know. But we're looking beyond the obvious."