Viagra-maker Pfizer has announced a plan to use radio frequency technology to fight drug counterfeiters, John Jordon, president worldwide field operation at Tagsys, said Tuesday.

On Dec. 15, Pfizer began putting radio frequency identification tags on all Viagra shipments in the United States in an effort to detect counterfeit pills, five million of which were seized by authorities last year.

Pfizer will spend approximately $5 million on the project and has tapped two RFID tag companies for help. The pharmaceutical company plans to read "in the hundreds of thousands of tags monthly," Jordon said. Tagsys specializes in assisting companies tag individual items, not cases and pallets. "Every bottle has the tag integrated in advance under the label. We didn't change their production line at all," he said.

Tagsys engineered the processes for Pfizer to apply the tags on the bottle as they flow down the production line. There were little changes to processes or additional time and complexity added to supply chain operations. A system to write the information to the RFID tags was added. It verifies and checks if the tag is valid before it's applied.

The RFID chip, or semiconductor,in the tag contains a unique serial number, or Electronic Product Code (EPC), and antenna to transmit the information. Drug distributors and pharmacists retrieve the EPC with a reader to verify authenticity.

Tagsys supplied approximately 10 readers and 13.56-Mhz RFID tags about .5 by 1-inch that will affix to medicine bottles. Alien Technology, Morgan Hill, Calif., supplied tags for cases and pallets.

Pfizer is not the only company in the drug industry working with Tagsys. West Pharmaceutical Services, which makes caps for vials, also tapped the integrator's services about a year ago to put RFID tags into seals. The U.S. Food and Drug Administration (FDA) released guidelines and recommendations for the use of RFID technology to ensure safety and authenticity of drugs in the United States.

The potential market is huge. "There are about 10 billion units shipped annually from manufacturers to pharmacies, doctors and hospitals in the United States and Europe," Jordon said. "Think about the size of market this will become even if you only put a 10 cent tag on the 10 billion units the size market we're talking about."

Jordon said Tagsys has about 50,000 RFID readers and more than 50 million RFID tags on the street worldwide. Many are reusable because they are deployed in closed loop applications within a company, but that should change. "This year we anticipate generating as much revenue from open-loop applications, single-use tags, as we will from closed loop, with reusable tags" he said. "Perhaps it's because we make sure to get our clients 99.9 percent read rates on tags."

Jordon expects the surge in RFID use by Pfizer and others in the drug industry to push Tagsys' revenue past $30 million this year, up from about $17 million in 2005.