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Pharmaceutical RFID Pilot Finds Promise, Problems

Cardinal Health released results of an extensive pilot project to evaluate UHF RFID technology for item-level pharmaceutical tracking. Despite extremely low read rates for some operations, Cardinal viewed the pilot as positive, especially for the ability of Gen2 RFID to support item-level applications.
Nov 15, 2006This article was originally published by RFID Update.

November 15, 2006—Yesterday Cardinal Health released results of an extensive pilot project designed to assess the suitability of using UHF RFID technology for pharmaceutical supply chain tracking and e-pedigrees. Cardinal, an $81 billion global provider of products and services to many segments of the healthcare industry, said it is encouraged by the pilot, but also noted the technology and industry are not ready for adoption. The results were announced at the NACDS RFID Healthcare Industry Adoption Summit in Washington, DC. (For more background on the pilot, see Cardinal Health's RFID Adoption Expands.)

"While our pilot demonstrated that using UHF RFID technology at the unit, case and pallet level is feasible for track-and-trace purposes, a great deal of additional work needs to be undertaken by stakeholders across the industry to address significant challenges including global standards, privacy concerns and the safe handling of biologics," said Renard Jackson, vice president and general manager of global packaging services for Cardinal Health. "Until those challenges are addressed, direct distribution of medicine continues to be the best near-term approach to maintain the highest levels of security and efficiency in the pharmaceutical supply chain."

Improving read rates is one of the challenges. Although Cardinal was encouraged by the item-level read rates it attained for several distribution center processes, a spokesperson told RFID Update: "We feel that 99 percent is not enough. We need to be Six Sigma quality or greater because in the long term we'll be creating e-pedigrees from the data and we can't live with 1 percent errors."

Cardinal tracked thousands of individually labeled pharmaceutical products in totes, cases and pallets through a variety of picking, shipping and receiving processes over several months. Most activity occurred at Cardinal's distribution center in Findlay, Ohio, but one pharmacy participated in the pilot. Cardinal inserted blank EPCglobal Gen2-compliant RFID inlays into labels provided by one of its business units. The labels were applied and encoded at the end of the production line during packaging. Two different products were labeled and tracked for the pilot. Cardinal reported 97.7 percent of labels were successfully encoded for one product and 94.8 percent for the other. The company was pleased that products could be labeled and encoded at regular packaging speeds.

Tagged products were then tracked by RFID when they were placed into totes during picking, when units were aggregated into cases, and when cases were aggregated into pallets. Cardinal read individual products within cases and pallets during shipping and receiving processes. Successful read rates for the various processes ranged from only 7.8 percent for identifying individual items within pallets at receiving, to 100 percent for several processes. The results are summarized in the table below. See Cardinal's announcement for more details about the methodology and results.

  Item-level Read Rates Case-level Read Rates
  Product A Product B Product A Product B
Unit Encoding Yield During Packaging 97.7% 94.8% NA
Unit to Case Aggregation 96.9% 99.7% 91.8% 100%
Case to Pallet Aggregation 56.4% 80.8% 100% 99.7%
Shipping Pallet from Packaging Facility 9.2% 14.3% 82.3% 100%
Receiving Pallet at Distribution Center 7.8% 9.5% 76.3% 100%
Receiving Case at Distribution Center 92.1% 97.1% 99.4% 100%
Reading Totes at Distribution Center NA 99.5% NA
Shrink Wrap Tote Carts at Distribution Center NA 64.1% NA
Shipping from Distribution Center NA 46.1% NA
Receiving at Pharmacy NA 85.8% NA

Cardinal said it was not discouraged by some of the extremely low read rates because it expected reading difficulties in some environments and does not expect to use RFID in those operations, but wanted to include them in the pilot to establish baseline data. The company also said it is confident it can improve read rates by adjusting its equipment and applying knowledge gained from the pilot.

"We are feeling good about the technology," said Cardinal spokesperson Troy Kirkpatrick. "We learned that we could have improved read rates by stacking cases differently, or putting readers in different locations, but we didn't want to skew our data by making changes in the middle of the pilot."

A major goal of the pilot was to determine if UHF technology is suitable for item-level pharmaceutical tracking, and Cardinal was pleased with the results.

"We believe the data supports that you can do multiple forms of pharmaceutical tracking with one frequency," said Kirkpatrick. "That's important to the industry because having one frequency for RFID systems costs less to support."

Previously at the same conference, Vue Technology announced an item-level RFID tracking system for retail pharmacies based on Gen2 UHF technology (see Vue Brings UHF Item-Level RFID to Pharmacies). However, 13.56 MHz high frequency (HF) technology is widely considered as a viable option, and the industry is far from consensus as to which technology is better for pharmaceutical tracking. In an RFID Update article last month, market research firm Venture Development noted resolution of the frequency question is a key factor impacting adoption (see VDC: Pharma Item-Level RFID to Set Precedent).

Cardinal said its next steps include additional testing to try to improve read rates based on what it learned. Alien Technology, IBM, and VeriSign assisted with the pilot, which is not Cardinal's sole RFID activity. In particular, the company is also involved with the RFID Vi*gra-tracking pilot with drug maker Pfizer (see Pfizer shipping RFID-tagged Vi*gra).
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