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Stakes Are High for Mexican Pharma RFID Mandate

To participate in Mexico's federal Seguro Popular health-insurance program, which currently serves 4 million families, drug manufacturers and distributors will use UHF and HF RFID tags to track pallets, cases and individual containers of pharmaceuticals.
By Beth Bacheldor
Depending on agreements reached between manufacturers and distributors, the tags can be encoded either by the manufacturer just before the drugs are shipped to a distributor, or by the distributor after a manufacturer. The tags are scanned at various points along the supply chain, and the data is collected to document the drug's movement.

Individuals covered under Seguro Popular will receive contact smart cards (not RFID-enabled) containing their identification numbers; these cards are used to obtain treatment from authorized Seguro Popular doctors. The doctors program into the cards their identification numbers, as well as any prescriptions. The individuals can then go to participating pharmacies, where the smart cards are read at point-of-sale systems to find out the drug prescriptions. The point-of-sale systems will also be equipped with RFID readers, so that when the pharmacist pulls the drugs from the shelves, the POS RFID reader will scan the drug's RFID tag. That information will then be married with the information culled from the individual's smart card.

"More than an RFID/e-pedigree mandate, it is a supply-chain model that benefits from RFID technology for its operation," says Morales. Not only does the model trace and authenticate the drug's lineage to ensure it isn't counterfeit, it also traces each organization that has handled the drug—including the manufacturer, distributor, pharmacy and doctor—so the government can assign appropriate payments for the drug. "The information of all the parts involved is sent via the POS terminal to Seguro Popular," Morales says, "and fund transfers are made to the parts involved."

Mexico's RFID mandate won't apply to all drug manufacturers and distributors, only to those that wish to participate in the Seguro Popular program. However, the incentive is high: By year's end, 20 million individuals—nearly 20 percent of the nation's estimated total population of 103 million people—will be participating in the health-insurance program. The government expects Seguro Popular to cover as many as 50 million individuals in the future, according to Morales. "If manufacturers and distributors are interested in participating in that future market, they must comply," he says.

No date has yet been set for nationwide compliance with the Seguro Popular Supply Chain Model. Morales says compliance will occur independently in Mexico's 32 states as RFID-enabled POS terminals are installed in Seguro Popular-affiliated pharmacies. Purchase orders can be sent to manufacturers and distributors that include the RFID requirement.

Thus far, two pharmaceutical companies are testing RFID in their operations: Farmacéuticos MAYPO, a nationwide distributor of specialized pharmaceutical products, and Específicos Stendhal, a specialty pharmaceutical lab. MAYPO is already capable of tagging drugs for Seguro Popular, according to Morales. The company is now gearing up to test the pharmacies' POS infrastructure. "Case and pallet tagging is not a priority at the moment, but UHF tagging and programming for authentication and traceability is also offered by MAYPO to some costumers like Stendhal," Morales says. "MAYPO's case is very valuable, because it is the first distributor to comply, and through them more that 30 manufacturers are ready to comply too."

Stendhal is complying with the HF tag requirements of Seguro Popular through MAYPO, and is also testing UHF tags for authentication. Stendhal can either place and program UHF tags in their facility, or just place the tags and let MAYPO do the programming without modifying their production line, according to Morales.

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