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Pharma RFID Adoption Still Seeking Shot in the Arm

Florida passed another technological milestone in its drug pedigree program by designating the first company (SupplyScape) to provide digital signatures for electronic pedigree authentication. Pedigree requirements of the FDA's Prescription Drug Marketing Act (PDMA) will soon take effect. How soon will RFID for pharma e-pedigrees follow?
Oct 10, 2006This article was originally published by RFID Update.

October 10, 2006—Last week the Florida Department of Health designated SupplyScape as the first company to provide digital certificates to help companies comply with the state's progressive pharmaceutical pedigree requirement. The designation is another step towards common use of electronic pedigrees (e-pedigrees) and RFID in the pharmaceutical supply chain, but not a decisive one. While SupplyScape promotes it for e-pedigree applications, RFID technology is not the only option. Interest is high yet adoption lags, despite numerous state and FDA initiatives to encourage e-pedigrees and other track-and-trace systems.

SupplyScape's announcement provides a good opportunity to reexamine pedigree initiatives and RFID penetration in the pharmaceutical industry. Earlier this year the FDA lifted a 19-year hold on a provision of the Prescription Drug Marketing Act (PDMA) that requires documented chain-of-custody for drugs throughout the distribution system. Pharmaceutical manufacturers, wholesalers and distributors now must have pedigree processes in place by December 1, 2006 to comply with the federal FDA regulation. Florida's state law is already in effect and requires all distributors and pharmacies to verify their suppliers are properly licensed to distribute drugs. Many other states have patterned legislation after Florida's.

SupplyScape's Robin Koh told RFID Update that digital certificates and RFID tags are each separate pieces of the "safe-and-secure ecosystem." Koh is SupplyScape's chief strategy officer and previously was with the MIT Auto-ID Center, where he helped pioneer what is now the EPC system. "Pedigrees provide a purpose and focus for the pharmaceutical industry to use RFID. RFID was always considered very interesting, but people didn't know what to do with it. Up until now, a lot of things were viewed individually -- RFID, pilots, pedigrees, authentication, security. Now that there are pedigree requirements, pharmaceutical companies are thinking about how they can weave RFID into a more coherent product security strategy."

Technological automation isn't a legislative requirement for pedigrees, but a practical one. One of the reasons the FDA delayed the PDMA's pedigree requirement for 19 years was the agency's hope that technology would emerge to make implementation practical. The time and paperwork necessary to manually prepare chain-of-custody documentation and to authenticate shipments and suppliers would pose a heavy financial and productivity burden on the drug industry. Companies throughout the supply chain are examining a variety of technologies -- including digital certificates, RFID and bar coding -- to ease the data capture, communication and authentication burden.

"The Florida announcement and the FDA requirement aren't having an immediate, direct impact on RFID for now, because you can use any technology, or no technology, to comply," ABI Research analyst Sara Shah told RFID Update. "It's just not feasible to use RFID to comply with the deadlines at hand because of the time it takes to plan and implement RFID technology." The pharmaceutical industry is moving to comply, she said, but not with RFID, at least for now.

Shah said most of the required elements for broader pharmaceutical RFID use are in place, and there isn't a major "missing piece" needed to facilitate rapid, widespread adoption.

"There's no one big thing the industry needs. Several smaller things would help," said Shah. "Of course, further RFID price reductions are one. Having a standardized technology developed specifically for this market would also be helpful. There are many EPC efforts in this area. More coordination among all areas of the industry is also needed. Yes, there's collaboration between manufacturers and distributors, but there's not a lot of coordination or collaboration going on with some of the other segments."

Koh said he's seen a shift in how pharmaceutical companies view RFID. They are setting broader strategies for product authentication, supply chain security and regulatory compliance, instead of viewing each individually. As attitudes shift in favor of a consolidated solution, RFID becomes more compelling. Koh said companies who aren't implementing now are considering migration to RFID for 2008 and 2009.

Koh said companies with high-velocity products and distribution systems may be more likely to start with an automated solution for pedigree compliance, while lower-volume distributors may stick to paper. Shah agreed that RFID and other technology implementation will come in tiers, with drugs at high risk for counterfeiting most likely to be managed with advanced automated solutions. She noted some pharmaceutical RFID "pilot" programs are being continued indefinitely, citing Pfizer's Vi*gra-tagging program (see Pfizer Shipping RFID-tagged Vi*gra), which will soon hit a year old and shows no signs of stopping.

"2007 will be a year of experimentation for different pedigree methodologies," said Koh. "There will be a lot of trial and error to find the best way to comply."
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