Legislation Slows Pace Of RFID In Pharmaceuticals

Editor's Note: This article first appeared with some inaccuracies which we have corrected in bold type.

Both cost and legislation recently put on hold are reasons cited for the slower then expected adoption of RFID in the pharmaceutical industry, according to an ABI Research study.

Correction: What has been delayed (or stayed) is the federal Food and Drug Administration's regulation on pedigree (Section 203.50). This regulation was promulgated on December 3, 1999, and the effective date has been delayed twice. FDA is now looking at a December 2006 effective date. Nothing in the PDMA law was stayed.

Predictions made a year ago of large increases in life sciences RFID transponder shipments between 2005 and 2006 won't materialize, says ABI Research. Instead they expect no more than ten medications will receive tags on a large-scale basis in 2006.

According to Sara Shah, Oyster Bay-N.Y.-based, ABI Research's industry analyst for RFID, the slowdown may be attributed to cost, as well as to a retreat from the "irrational exuberance" of early market hype and a desire to execute small-scale pilots before committing to full deployments.

With regard to legislation, The U.S. Prescription Drug Marketing Act (PDMA) of 1987 requires biotech and pharmaceutical manufacturers to prove they have processes in place to prevent the diversion of drugs. Manufacturers must have the ability to trace a shipment's "chain of custody" at all stages from manufacturing to delivery.

Correction: PDMA addresses four primary issues: the reimportation of American-made prescription drugs from abroad; the distribution of prescription drug samples; the resale of prescription drugs purchased by hospitals, other health care entities, and charitable institutions, and the regulation of wholesale drug distribution. The latter, wholesale drug distribution licensure requirements, is the backbone of all substantive previsions of PDMA. PDMA required that states regulate and license wholesale drug distributors. The states' licensure programs (and wholesalers) must comply with minimum standards established by the FDA. The bulk of PDMA concerns licensure requirements. PDMA requires that a wholesaler be licensed in the state in which it is domiciled and meet minimum standards set forth by FDA. All states adopted these between 1989 and 1991. Of course, FDA set the floor; states can be more restrictive.

"The PDMA caused an uproar," says Shah, "because there was no way that companies could achieve that within the specified time." So the law was subjected to a temporary "stay," and has not been enforced to date. Certain states then decided that they would enact their own laws, due to increased drug counterfeiting. Florida's law is scheduled to begin in July 2006 while California's regulation becomes effective January 2007.

For a copy of the study visit: http://www.abiresearch.com/products/market_research/ The_RFID_Life_Sciences_Market