Players at each stage in the pipeline have been participating in a series of group and individual RFID pilot programs. Accenture coordinated an RFID pilot, beginning in October 2003, in which a number of manufacturers (Abbott Laboratories, Barr Laboratories, Johnson & Johnson, Pfizer and Procter & Gamble), distributors (Cardinal Health and McKesson) and retailers (CVS and Rite Aid), as well as the Healthcare Distribution Management Association (HDMA) and the National Association of Chain Drug Stores (NACDS) cooperated to tag, ship, receive, handle and trace nearly 13,500 prescription drug bottles. The project ended in late April, and Accenture is continuing to work with the participants individually.

The point of the pilot was to assess the business value of RFID technologies, standards and processes and to prove that RFID could be implemented in the pharmaceutical supply chain. Participants not only gained hands-on experience with the technology—wrestling with issues such as where to place the tags on drug bottles, how to pack a case and how to configure readers—but actually developed designs that some participants are utilizing in their own pilots.


But many in the industry acknowledge that there remain several challenges, including issues involving data sharing between trading partners and developing standards for the industry. Bob Celeste, director of action groups for EPCglobal US, says the pharmaceutical industry, which is actively participating in the Healthcare and Life Sciences Business Action Group, is expected to unveil to the technical community, possibly this June, how RFID-tagged pharmaceutical products will move through the supply chain, how data will flow and the kind of environment in which the tags will operate. After that, the group will work on such issues as how information will be shared between trading partners.

Drugmakers Test Item-Level Tagging
The FDA's endorsement of RFID technology coupled with a mandate from Wal-Mart that impacted manufacturers of Schedule II narcotics spurred Purdue Pharma, based in Stamford, Conn., to start experimenting with RFID tagging. In November 2004, Purdue Pharma's production facility in Wilson, N.C., began shipping individually tagged bottles of OxyContin, a Schedule II painkiller, to Wal-Mart. It became the industry's first company to tag individual bottles of pills on the assembly line, rather than resorting to a slap-and-ship operation.

Pfizer's goal is to thwart counterfeiting by applying high-frequency 13.56 MHz RFID-tagged labels to Viagra bottles on the company's assembly line in France by the third quarter of this year. Cases and pallets will also be tagged, but with ultra-high-frequency 915 MHz tags. (The case and pallet tags will be tested in France at 866 MHz because France reserves the 915 MHz frequency for military use.) Pfizer expects to be shipping these products by year's end to some of its U.S. distributors.

Pfizer is also planning to have a 2-D bar code—it's similar to a UPC code but can contain a unique serial number for each bottle and is harder to counterfeit—placed on Viagra bottles during the assembly process. "The primary reason was for backup in case the RFID tag failed," says Peggy Staver, Pfizer's director of trade product integrity. "However, based on where we are in the transition, there is a lot more discussion about 2-D bar codes to mass-serialize items. That also gains us that mass benefit, but it's more mature and costs less." The one significant disadvantage is that the 2-D bar code needs to be hand scanned to get the results.

"Our plan here is to gain this experience with Viagra," says Staver. "Once we're done with Viagra, we'll see what's happening in the industry and decide whether to move on to other products."

Other U.S. companies that have been tagging drug supplies or undertaking pilots include Abbott Laboratories, Barr Laboratories and Johnson & Johnson. Pharmaceutical manufacturers are finding that tagging individual bottles of medicine poses a number of unique challenges, including where to place the tags on the vials so that all tags can be read within a case or pallet. And they haven't yet done pilots to test the readability of RFID tags on liquid medication. Also, slap-and-ship solutions won't work; tagging must be automated because of the sheer number of bottles that move through the packaging line.

Another looming question is whether the electromagnetic energy from RFID technologies will have any ill effects on drug efficacy or potency. The FDA asked manufacturers to share the results of product testing on this matter, and the pharmaceutical industry has been complying with this request. Thus far, no adverse effects have been found on tested products—which have all been in tablet form. The FDA says this issue may have greater importance in the tagging of liquids and biological products.