Pharma Industry Debating Bar Codes Vs. RFID For Drug Tracking

The industry is leaning toward RFID at the case level but isn't sure when costs will decline enough to let it take that approach for individual bottles of drugs.
As the pharmaceutical industry starts putting systems in place to identify drugs in the supply chain to meet government mandates, a debate is brewing over which technology to use: radio frequency identification or 2-D bar codes.

California and Florida have passed laws that soon will require the industry to track the location of drugs from manufacturer to wholesaler to retailer in order to reduce illegal activities such as counterfeiting and theft and improve drug safety. Other states are expected to follow. RFID has something bar codes will never have: the ability to read information from a distance using an ultrahigh-frequency radio wave, while bar codes require close proximity to a scanner. RFID tags also can contain a lot of unique information about a product, while traditional bar codes only identify the type of product it is. More-advanced 2-D bar codes, however, can contain unique identifying information about an item.

The industry is leaning toward RFID at the case level since it means less manual labor and a faster distribution process than bar code reading. Less certain is if and when it will be appropriate for individual bottles of drugs because of the cost of the RFID tags, which is typically about 10 cents per tag, compared with a penny or less for a bar code. Prices are gradually dropping on tags, but many pharma companies need to make decisions now.

That's going to result in some complexity in the supply chain, with manufacturers taking either one of two approaches for item-level tagging, said Shay Reid, VP of integrated solutions at drug wholesaler AmerisourceBergen, during a presentation at RFID World in Dallas on Wednesday. "It's probably going to begin with a barrage of technologies at item level," Reid said. "We at the wholesaler level are trying to understand how to accommodate these technologies manufacturers will use."

AmerisourceBergen already is at work preparing for California's mandate, which requires item-level identification of drugs in the marketplace by January 2009. Those in the industry say this means processes will have to be in place as early as one year from now. In California, VeriSign will manage a registry of every bottle of drugs produced by participating pharmaceutical companies, and every company within the VeriSign supply chain will have to update that registry about the drug's present "ownership." A drug can't move on to the next level in the supply chain unless the current owner can prove it's established in the registry. Another company, SupplyScape, is helping Pfizer and others track their drugs through the supply chain.

The industry is working out how companies will buy into the registry service, said Reid. VeriSign will set up the Internet links between AmerisourceBergen and its business partners for drug tracking, he added. AmerisourceBergen is using IBM's Electronic Product Code Information System technology for tracking and tracing.