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Can Pharma Move in Lockstep?

Adopting RFID all at once could lower the cost of deployment, deliver business benefits and offset a government mandate to track drugs.
By Mark Roberti
Dec 11, 2007— On Sept. 27, President George W. Bush signed into law H.R. 3580, the Food and Drug Administration Amendments Act of 2007. The law received very little attention in the media, but it contains a provision that charges the U.S. Food and Drug Administration (FDA) with "developing and using improved adverse-event data-collection systems, including information technology systems." In other words, the U.S. Congress wants the FDA to figure out how to capture information about counterfeit drugs entering the legitimate supply chain.

Randall W. Lutter, the FDA's deputy commissioner for policy, told a gathering at the U.S. Chamber of Commerce in Washington on Oct. 10 that the FDA indicated that it might call for some kind of pedigree system. "We're just starting to look at how we will implement the law," he said.

One of the biggest issues facing the pharmaceutical industry is the cost of implementing a pedigree system. A system that uses two-dimensional bar codes with unique serial numbers requires a great deal of labor. A person is needed to pick up each individual bottle, orient the bar code to the scanner and scan the bar code. Distributors who handle billions of unique items a year have indicated that using 2-D bar codes is not a viable option in their operations.

RFID could save labor by making it possible to read unique serial numbers and gather data for electronic pedigrees with less human involvement. But pharmaceutical manufacturers do not want to bear the cost of putting RFID tags on every bottle of drugs they produce. RFID tags cost at least 8 cents each, whereas 2-D bar codes can be printed on labels with little or no additional costs.

Retailers are also opposed to using RFID tags to gather pedigree data because they would need to install thousands of interrogators throughout their operations. In addition, every pharmacy would need software, hardware and a networking infrastructure to read tags and verify the legitimacy of a drug by looking up the item's history in a secure database.

While Lutter acknowledged that cost is an obstacle to using RFID to gather pedigree data, he said the cost would be far lower if the entire industry deployed RFID systems for tracking shipments all at once. That's because companies would make bulk purchases of tags and readers, and the high volumes of purchases would drive costs down.
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