Nov 30, 2005This article was originally published by RFID Update.
November 30, 2005—Research firm Frost & Sullivan today released a report on RFID's application in the pharmaceutical and healthcare verticals. Entitled World RFID in Healthcare and Pharmaceutical Markets, the report predicts a "very healthy" compound annual growth rate of about 30% for the next seven years, from an aggregate value of $370 million last year to $2.3 billion in 2011. These values include money spent on hardware and software, professional services, integration, and applications.
The report divides the market into three segments: medical equipment tracking, patient tracking, and pharmaceutical tracking. The latter will constitute the biggest chunk of the overall market. "We expect drug tracking to be far ahead of the other categories, largely because of the volumes," report author Priyanka Gouthaman told RFID Update. However, there are meaningful hurdles to overcome before the realization of widespread RFID adoption. Among them is the variety of factors that differ from one geographical region to the next. Gouthaman noted that many of the pharma companies piloting or considering RFID are huge, sprawling enterprises, distributed across many locations internationally. Thus, aspects like radio frequency regulations, standards, and even packaging must all be addressed independently at each locale.
Frost recommends that pharma companies take a tiered approach to RFID deployment, focusing first on tagging those product lines that can reap the most benefit from RFID tracking. Gouthaman said that while there has been a lot of hype and press attention paid to drug tracking, the pharmaceutical companies are still taking a notably measured approach. "Enthusiasm is restricted only to pilot activities," she said. "People are still hesitant to go in for large volumes." Growth will certainly come, as Frost's predictions indicate, but will do so gradually rather than hitting a tipping point. "There are quite a number of challenges [for drug tracking], but the potential with this technology is definitely there."
The report also looks at how the growth will take shape across the major regions of North America, EMEA (Europe, the Middle East, and Africa), and APAC (Asia-Pacific). Frost predicts that North America will lead in terms of market size, followed by EMEA, then APAC. But in terms of growth rate, APAC will grow faster than EMEA; the North American market will grow the fastest. "The European and Asia Pacific regions hold enormous potential but are being limited by challenges related to regulations and issues regarding the existing infrastructure," says the executive summary.
