Analysis: RFID Use Faces Challenges In Pharma Industry

Consulting firm META Group says the use of radio frequency identification (RFID) will increase rapidly during the next 18 months, due to potential cost savings. However, major challenges still must be met before full-scale deployment occurs, the Stamford, Conn. firm says. Meta Group says opportunities for return on investment in RFID technology exist in five key areas: inventory management, recalls, patient safety, product diversion and counterfeiting. However, the immaturity of electronic product code (EPC) technology will limit the pharmaceutical industry's use of EPC-compliant RFID tags, the research firm says. "The inherent problem with EPC technology, from a pharmaceutical perspective, is the lack of anti-cloning features in the EPC chip itself," says Bruce Hudson, program director with META Group's Enterprise Application Strategies service. "With current EPC specifications, it is possible to program one chip with the exact data of another, effectively cloning the first chip. Without guaranteed authentication, the usefulness of RFID is significantly reduced." Until EPC specifications are revised, META Group believes RFID use in pharma will be limited to a "track and trace" role. "Because of the compelling ROI for pharmaceutical organizations and their distributors, RFID use in the pharma industry will surpass that of [consumer packaged goods] companies with 18 months," predicts Hudson. "However, major issues need to be addressed before we see full-scale deployment. In addition to authentication issues, the industry must address the validation of RFID systems by the FDA, the unknown impact of radio frequency energy on drugs, and data management in light of competitors."