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VDC: Pharma Item-Level RFID to Set Precedent

Research firm Venture Development Corporation of Natick, Massachusetts, just released a bulletin on item-level tagging in the pharmaceutical industry. This article highlights the key points.
Oct 12, 2006This article was originally published by RFID Update.

October 12, 2006—Research firm Venture Development Corporation of Natick, Massachusetts, just released a bulletin on item-level tagging in the pharmaceutical industry. This article highlights the key points. Also see Pharma RFID Adoption Still Seeking Shot in the Arm, published earlier this week.

  • VDC predicts that item-level RFID tagging in the pharmaceutical industry will be precedent-setting for item-level tagging generally. "There is no doubt about it ... the pharmaceutical industry is expected to significantly influence how the RFID industry addresses item-level tracking and high-compliance applications on a global scale." Indeed, according to VDC research, 65% of end users in the consumer packaged goods (CPG), retail, and health care industries are observing the pharmaceutical industry's adoption of RFID before moving forward themselves.
     
  • Because of this, pharma adoption could serve as kind of tipping point for broad supply chain RFID adoption. Once pharma fully adopts, VDC sees a spillover into these other key verticals. "A 'domino' effect will most likely ensue, since the pharmaceutical value chain is heavily integrated with the CPG, Retail, and Health Care supply chains. These 3 verticals are primary end-user outlets for pharmaceuticals and are poised to rapidly deploy the technology -- having conducted numerous evaluations and pilots over the past 5 years."
     
  • VDC believes pharma could be the largest RFID vertical over the next two to three years.
     
  • Before it gets there, however, there are a number of hurdles. Three of them -- price, UHF vs. HF, and performance -- are common across other open-loop, item-level RFID applications. VDC also cites usage of RFID data as an issue. Once an RFID infrastructure is in place, it is still not clear exactly what can be done with it. Those early adopters that figure out how to leverage the data will enjoy competitive differentiation.
     
  • A fifth hurdle, and one that doesn't get discussed as much, is RF energy's possible effect on drugs and other organic material that travels through the pharmaceutical supply chain. Until it is determined that there are no effects, or that the effects are negligible or otherwise benign, this remains a large question mark.


Read the full bulletin from Venture Development Corporation
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