Changing the World

Daphne Allen, Editor

RFID World exhibitor New Jersey Packaging (Fairfield, NJ) handed out RFID labels from its booth at the show. The labels are part of the firm’s RxTrackNSecure anticounterfeiting solutions.

“R-F-I-D will change the world,” repeated the narrator of a video presentation looping at the Korea Association of RFID/USN’s booth at RFID World. While the video made radio-frequency identification (RFID) sound like the latest in science fiction, speakers at the event were certainly convinced that RFID’s benefits could be realized.

“RFID is feasible by 2007,” said Randall Lutter, FDA’s associate commissioner for policy and planning, who was the event’s keynote speaker on March 1. The agency believes that RFID will help industry develop pharmaceutical pedigrees, required by the Prescription Drug Marketing Act of 1987 (PDMA). That act calls for state licensing of drug wholesalers and the creation of drug pedigrees. FDA issued regulations in 1999, but the agency stayed certain provisions of the rule to “give stakeholders time for track and trace technologies,” Lutter said. That time is now, he suggested, pointing to successful “pilot projects” with RFID and RFID/bar coding hybrids demonstrating feasibility. “Stakeholders should look for more pilots,” he advised.

The agency is clearly interested in an electronic pedigree. “RFID and software can [create a] chain of custody to thwart peddlers,” Lutter noted. He spoke of using databases to “track packages as they move throughout the supply chain.”

Such tracking could also ease inventory management, said Lutter. “We believe that RFID could bring savings,” he said. Speakers and panelists echoed that very sentiment during the next two sessions. Bob Berg, senior RFID program manager for DHL Worldwide Express, spoke longingly of the efficiencies and supply-chain visibility that RFID-tagged packages could bring. “We could get better metrics on transit times,” he said. Such information could have value for pharmaceutical firms shipping environment-sensitive products.

RFID may also prevent losses. “We handle 50 million tons a year, and we have 5500+ facilities,” said Berg. “Occasionally we can’t find something.”

New Jersey Packaging can produce pressure-sensitive labels with either ultrahigh-frequency or high-frequency RFID tags.

During a panel discussion, Berg added that “high-value shipments are high-risk shipments. Technology can play a role in getting the proper visibility, reducing shrinkage and spoilage.”

In that same panel, Carolyn Walton, vice president of information systems for Wal-Mart Stores Inc., also spoke of RFID improving supply-chain efficiency in ways that could benefit product manufacturers. “We want to make sure that products consumers want to buy are on the shelf,” she said. “Getting items to the shelves drives the sale of those items, especially if they are promotional or seasonal.” For instance, if Wal-Mart associates unloading trucks were to wear devices that read the RFID tags on incoming cases, those devices could tell the associates whether the cases need to go directly to the shelves.

Work remains, however, at least in the pharmaceutical industry. “Progress is proceeding more slowly,” Lutter noted. Event speakers during the previous day’s session, “Item-Level Tracking in the Pharmaceutical Supply Chain,” did make note of two major industry achievements: Purdue Pharma L.P.’s application of ultrahigh-frequency (UHF) RFID tags to bottles of Oxycontin, as explained by Mike Celantano, associate director, supply chain and RFID systems, for Purdue; and Pfizer’s use of high-frequency (HF) RFID tags for Viagra bottles, as explained by Ken Reich, director, global marketing and public relations, Tagsys, which supplied the tags to

Pfizer. Such success, however, has left the rest of the industry debating the use of UHF versus HF for item-level tracking.

FDA is counting on industry to resolve this debate soon. “Counterfeit drugs in the United States are quite rare,” Lutter said. “But [the drug supply] is under increasing threat of attack.”

While FDA doesn’t want to panic the public, Lutter said that “We at FDA worry. I fear tragic headlines.” And on a business note, he said, “Brand manufacturers that secure their products should take note that should such tragedy occur, their brands will stand out.”

FDA will provide further details on its expectations regarding RFID in a report to be issued in May 2006.