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Pharmaceuticals Industry Expected To Lead In RFID Tags On Items

Their higher price tag and margin justifies the expense, says ARC Advisory Group in a new study.

Although retailers such as Wal-Mart Stores Inc. and Target Corp. are considered the heavy hitters when it comes to radio-frequency identification technology, the pharmaceutical industry may be the first to put passive RFID tags on individual items, according to a new study released this week by the ARC Advisory Group.

The supply chain research and consulting firm expects that by 2007, pharmaceutical manufacturers will be tagging items in addition to cases and pallets. That's because pharmaceuticals have a higher price tag and margin relative to retail products, according to ARC. In addition, this past February, the Food and Drug Administration asked pharmaceutical makers and distributors to adopt RFID within the next three years. Though the FDA hasn't set mandatory implementation guidelines, the agency expects that by 2007 all pallets, cases, and most individual packages of the drugs it regulates will be tracked using RFID.

The market is huge, ARC says in its study, with more than 12 billion units as candidates for tagging. In the retail sector, many experts don't expect item-level tagging of low-cost consumer goods to occur for five or more years, when passive RFID tags are expected to cost 5 cents or less. The study says RFID also can help with a number of issues in the drug industry, including recalls, tracking a product's history through the supply chain, and anti-counterfeiting measures.

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