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FDA Pushes Drug Industry To Adopt RFID

Tagging drugs with RFID chips is the industry's best defense against counterfeiting
The Food and Drug Administration is asking pharmaceutical makers and distributors to adopt radio-frequency identification technology within the next three years to combat drug counterfeiting. In a report released last week, the FDA promises to assist with RFID adoption throughout the drug-distribution system.

RFID is the most-promising track-and-trace technology for providing an accurate electronic "pedigree" for pharmaceuticals, the FDA says. It can ensure that drugs are manufactured and distributed under secure conditions and that counterfeit drugs introduced into the supply chain aren't mistaken for valid ones. "Electronic drug pedigrees can be more reliable, authentic, and cost-effective than old-style paper records," FDA commissioner Mark McClellan said after the report's release.

In its report, the FDA anticipates drugmakers and distributors will conduct RFID feasibility studies this year and next year begin attaching RFID chips to pallets, cases, and packages of costly pharmaceuticals and other drugs that are popular among counterfeiters. Use of the chips should permeate high-risk drugs in 2006, with some tagging occurring among pallets of less-valuable drugs. The FDA expects that by the following year, all pallets, cases, and most individual packages of the drugs it regulates will be tracked using RFID. The agency stopped short of setting mandatory implementation guidelines.

These expectations likely won't come as a surprise for most in the pharmaceutical industry, which has been largely receptive to the value and use of RFID tagging. "We believe that timetable is pretty realistic," says Ron Gabrisko, health and life sciences VP at Cyclone Commerce Inc., which provides E-commerce services for drugmakers and distributors such as Pfizer, McKesson, and Merck. The FDA forecast largely matches those companies' RFID-adoption plans, he says.

The FDA expects large manufacturers, wholesalers, and drugstore chains to be the first on board with RFID, while it will take a few years for smaller retailers to implement systems and processes.

Several issues must be addressed before RFID can work for the industry, the FDA acknowledges, including the need to develop standards and business rules and address database-management challenges. Adopters also will have to comply with the Health Insurance Portability and Accountability Act.

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