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RFID Boosts Profit Margin, Safety for Axxa Pharma

The Argentine pharmaceutical distributor can track the buying and selling price of its medicines, as well as expiration dates, ensuring the drugs are properly billed, and that no expired products are shipped to customers.
By Claire Swedberg
Aug 27, 2010Argentine pharmaceutical distribution company Axxa Pharma reports that it has seen a 40 percent rise in its profit margins since it began using RFID technology at its Buenos Aires warehouse 18 months ago. The company attributes the bulk of this increase to the addition of its RFID system.

Axxa's revenue has grown 250 percent since it opened three years ago, the firm indicates, and RFID has helped the firm cope with this rapid expansion by enabling it to track each container of medicine from the time it arrives at the warehouse until the drug is sold and shipped to a customer.

Federico van Gelderen, Axxa Pharma's executive director
While the profit margin improvement is significant, even more important is the increase in the safety of its products resulting from the greater visibility RFID affords, says Federico van Gelderen, Axxa Pharma's executive director. By tracking each bottle of medicine, the company can ensure that medications are not removed from the warehouse, and that expired drugs are not sold, as well as identify whether medications are sold at a low profit margin.

The system, van Gelderen says, "can provide customer satisfaction because we can absolutely guarantee that we can trace each product back to those selling it to us, and we can ensure they were professionally handled at our own facility."

Axxa Pharmacy was launched in Buenos Aires three years ago, to distribute medicines provided by wholesalers. In some cases, the company breaks the drugs down into smaller portions for sale. It stores and then sells the products to hospitals, pharmacies and physicians throughout Argentina. The firm was growing so fast that this summer, it moved to a larger warehouse to accommodate the higher volume of medicines it was handling.

From the outset, the company sought an RFID-based solution to track its products while they were in its custody. "The market was going through a crisis with medicines [being sold] that were not what they should have been," van Gelderen says, referring to the tampering and counterfeiting of pharmaceuticals that can take place in the supply chain.

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