By Elaine Chen

As prescription drug prices continue to skyrocket, security has become increasingly important. With risks including counterfeiting, theft and illegal sales, manufacturers and pharmacies must be able to track drugs every step of the way from factory to patient. RFID may be the answer.

Medicine, drugs, pharmaceuticals. It’s big business, and where there is big business, there are those that want to take advantage of it. One of the biggest problems with drugs is the authentication. A lot of counterfeit drugs are manufactured in China, for a fraction of the price in the West.

On the other hand, according to the World Health Organization, as much as 50 percent of all drugs sold on the Internet are not genuine. The U.S. Food and Drug Administration (FDA) says that counterfeits make up more than 10 percent of the global medicines market. That ten percent equals about 40 billion dollars.

Since drug prices can vary widely from one region to another, diversion – e.g., selling Canadian drugs in the U.S. and pocketing the price difference – is another concern.

In short: tracking the drugs is very important for many stakeholders.

That’s why the FDA is mandating that all pharmaceutical manufacturers start to identify their products in the beginning of next year, says Marc Schnippering, Sales Director for Sokymat ITG.

The solution the FDA is recommending is RFID - radiofrequency identification. Although some key issues still need to be resolved, RFID will soon help make the entire U.S. pharmaceutical industry more secure – and could provide other exciting benefits for pharmacies, hospitals and patients as well. 

A smart medicine cabinet
When RFID is finally fully rolled out, companies and patients could benefit in many ways beyond avoiding theft and fraud.

For example, the improved tracking capabilities provided by RFID make it easier for pharmacies to identify expired medications and process returns, since they can instantly identify an item’s manufacturer and wholesaler.

The tags could also help hospital pharmacies move to automated dispensaries, making it easier for hurried medical professionals to select the right medication.

Eventually, RFID tags may even be able to give patients the information they need to get well, linking to the Web to download medical information and even reminding them to take their medication.

A jumpstart for security
In 2005, the consulting company Accenture created “Jumpstart Program” with pharmaceutical companies like Abbot Laboratories, Cardinal Health, Pfizer, Rite Aid and CVS. During the eight-week experiment, approximately 13,500 bulk bottles of various drugs were given RFID labels, sent from manufacturers to pharmacies, and tracked and traced throughout the process.

Based in part on the success of this experiment, the FDA announced in the fall of 2006 that it would require all pharmaceutical manufacturers to document the full chain of custody prior to customer sale for its products as of January 2007. Although use of RFID was not required, this technology was specifically recommended; tracking could be implemented in phases, with the highest-risk drugs phased in first. Pfizer, for example, has already announced its plan to use RFID labels on Viagra, a costly drug – a bottle of 100 pills is valued at $300 - that is particularly prone to counterfeiting and theft.

Better than barcode
A basic RFID tag, or transponder, is essentially a silicon chip that contains a small amount of data. With an antenna, a transponder as small as a postage stamp can be read wirelessly from a few inches away.

Larger RFID transponders include power supplies and can transmit stronger signals that can be read from much further distances.

RFID tags offer significant advantages over barcodes. While barcodes require direct line-of-sight readers in order to share their data and thus must usually be manually scanned, a pallet full of individually RFID-labeled bottles can be sent through a reader and scanned instantly. Due to their more complex manufacturing process, RFID tags are also more difficult to counterfeit than barcodes. Furthermore, RFID tags can also hold more information than barcodes, and the data on some models can be updated and changed if desired.

Yet RFID also has two important limitations. First, typical RFID tags could cost 30-40 cents each, although with mass production prices could quickly slip to 20 cents.  Second, RFID also doesn’t yet have the universal standards, such as the UPC (Universal Product Code) system for barcodes.

However, the pharmaceutical companies don’t let that hold them back.