Pharmaceutical Adoption Of RFID Slower Than Expected: Report

Given the high cost of drugs and the growing problems of drug counterfeiting and theft, expectations were high in 2004 and 2005 that the number of drugs tagged with RFID transponders to ensure their pedigree (the ability to trace a drug shipment's custody through a supply chain) would grow rapidly. Those expectations were fueled by a number of high-visibility RFID trials in the last 18 months involving drugs such as OxyContin and Viagra.

In December Pfizer began putting RFID tags on all Viagra shipments in the U.S. The drug maker is spending about $5 million on the project, using technology from Alien Technology to tag cases and pallets, and from Tagsys to tag individual bottles of drugs.

But a study of RFID tracking in the pharmaceutical industry by ABI Research concludes that no more than about 10 medications will be tagged on a large scale this year. ABI attributes the slower adoption rate to the cost of RFID, a retreat from earlier hype about the technology, and the desire by many pharmaceutical companies to develop small-scale pilot projects before committing to large-scale deployments.

Another issue, according to ABI, is uncertainty concerning the current state of federal and state drug-pedigree legislation. There has been a moratorium on enforcing the Prescription Drug Marketing Act of 1988 because drug makers were not ready to meet its requirements. That moratorium doesn't expire until January 2007. Several states, including California and Florida, have enacted their own pedigree laws, but ABI says many pharmaceutical companies plan to use barcode technology to meet those requirements.