The Read on Packaging Security

Labelers are supporting companies’ efforts to launch packaging and supply-chain anticounterfeiting solutions.

By David Vaczek


Label printers like Nosco Inc. are incorporating security technologies into pressure-sensitive labels and cartons.

As interest in packaging security rapidly escalates, label converters have experienced heightened demand for RFID-enabled labels and product authentication features.

In many cases, label companies are also providing consultative services and system-building expertise as supply-chain participants launch RFID pilots and expand to larger-scale real-world tagging and shipment of coded product.

They are helping drug firms sort through a daunting array of choices in RFID hardware, production applications and software, and possibly supply-chain collaboration options.

“Every pharmaceutical company I have talked with is looking very seriously at securing the supply chain. [But] RFID is a technology that has to be shaped into a solution,” says Dave Uland, senior business development manager–RFID, WS Packaging Group–Ampersand Label Inc. (Algoma, WI).

“Tags have to be evaluated for suitability in the pharmaceutical environment. Encode speeds and read rates have to be considered. Are you going to pre-encode tags or code them on the packaging line? Will you keep the data in a database or on the tag? Many experts are convinced that high frequency (HF) is the right solution for item-level tagging of drug products. But ultra-high-frequency (UHF) tags are improving. There is a lot of disparity in the approaches that companies are taking,” says Uland.

Uland says that Ampersand is working with several companies on pilot projects. “We have strong relationships with paper suppliers that are also UHF tag suppliers and have good reach into the RFID reader community. Having designed applicators that encode and apply UHF tags, we have recently designed and built them for encoding HF tags,” he says.

Nosco Inc. (Gurnee, IL) has supported several RFID pilots and one larger rollout in which millions of items will be tagged and shipped by year’s end for item-level usage. Almost all the programs involve tagging at the item level, says Gregg Metcalf, industry market manager, Nosco RFID Package Integration. The large-scale rollout begins this summer following a pilot in which read rates on more than 10,000 items exceeded a 95% accuracy goal. Nosco has also been asked to write an additional field of information on the customer’s behalf.


Unique identifiers can be used to add redundancy to the serialized electronic product code. “Many companies have an interest in providing an additional layer of serialization that is often written at the manufacturing level. Nosco has the ability to write levels of information as it pertains to a customer’s application. Our inlay-attaching equipment allows us to read, write, verify, void, and remove tags we manufacture,” says Metcalf.

See Sidebar: A Shifting View on Authentication Devices

Nosco provides inlays by Texas Instruments that feature an additional layer of security by password-protecting the RFID inlay.

In the item-level rollout, Nosco worked with the customer’s middleware provider to help establish parameters for the type of tag to be used and the placement of the tag to the label. Metcalf says that Nosco helps customers with hardware, software, and integration services. Customers may require engineering support, support with pilot and production runs, assistance with in-plant labeling, and design redundancy with the addition of anticounterfeiting features.

“We see ourselves as an RFID packaging integration partner, providing an evolving, consultative-service approach to the market,” he says.

Narendra Srivatsa, business development manager, brand authentication, New Jersey Packaging (Fairfield, NJ), says that many companies are positioning to be “a fast second,” given FDA’s Counterfeit Drug Task Force report and guidance in June. (See “Regulatory Focus,” p. 22.)

“At this point, drug companies will be driven by two factors: cost and reliable performance. [But] they need to develop a strategy and tactics. We are assisting our pharmaceutical customers in testing RFID in small-scale pilots, starting off at the item level,” he says.

There has been no unified decision by drug firms as a group on tag frequency.

Srivatsa notes that DOD has focused on UHF with the installation of UHF readers within its systems. Custom-designed UHF antennas that work in near-field proximity to metals and liquids promise lower costs than HF and have helped renew interest in UHF for the item level. “[But] our customers have focused on HF for the item level, and UHF for the case and pallet levels,” he says.

Metcalf says that most of Nosco’s pilots have used HF for the item level. Studies such as by Odin Technologies (Dulles,VA) have demonstrated that HF outperforms UHF in item-level drug packaging. “Over the short term, we will see companies continue to evaluate both frequencies. UHF is making inroads, but the Odin report clearly gives HF the upper hand at the moment,” Metcalf says.

Yet Margaret Polt, marketing manager at The Challenge Printing Co. (Clifton, NJ), says that “customers are more focused on UHF at the moment, in order to satisfy current market requirements. We are prepared, however, for a significant increase in activity in both HF and UHF tags as many HF pilots begin to bear fruit.”

See Sidebar: John Henry Tries HP Security Publishing Software

Polt notes that though many pharmaceutical companies are considering HF for item-level tagging, the new near-field UHF tags seem to offer a great deal of promise in addressing liquid/metal issues while maintaining a sustainable cost advantage over HF. “This is viewed as a medium-term solution,” she says.

“Our effort to develop and market anticounterfeiting and antidiversion packaging solutions started more than three years ago as a strategic priority to differentiate ourselves in the market,” Polt says.

Cardinal Health (Dublin, OH) has launched an RFID pilot where product will be verified and technology tested through each stage of the supply chain, using UHF Gen 2 tags at all levels.


In the end-to-end program, Cardinal Health will control each step of the packaging and distribution process before product is shipped out in totes to a mail-order pharmacy partner.

Two bottle sizes, 90- and 100-count solid-dose pills from a brand company and a generic company, respectively, will be tagged and shipped in a real-world supply environment.

“Product will be under our control from label creation, through to packaging and the distribution environment. We are not relying on another entity to ensure that all of the product that is sent through the supply chain will in fact be read,” says Renard Jackson, executive vice president, packaging services.

The pilot will employ 915 MHz UHF Class 1, Gen 2 tags from Alien Technology Corp.

“We wanted to standardize on one frequency for the pilot. You are eliminating complexity and expense and the need for two different readers for different frequencies. At the pallet and case levels, we are reading all the way down to the individual bottle,” explains Jackson.

“We don’t think UHF has been adequately tested; in particular, Gen 2 tags and readers. We saw this as an opportunity to test UHF and see whether it has the capability to do the reads we are looking for at the item-level speeds we are running,” he says.

In addition, Jackson says that UHF is favored by some of its major pharmaceutical customers that are shipping consumer goods as well as drugs.

“The consumer goods industry has standardized on UHF, and Wal-Mart is now expanding its UHF requirements to include item-level tagging for some products,” he says.

Though Cardinal will employ UHF on bottles in its pilot, it is currently reading HF data in a pilot with Pfizer, testing shipments of HF-tagged Viagra bottles at Cardinal’s Findlay, OH, distribution center. “We are reading both labels at the same location, which should generate some useful comparison data,” says Jackson.
Jackson says that the eight-month pilot will be completed in the fall.

Printed labels with embedded RFID tags are created at the Moorestown, NJ, Printed Components facility. At a Philadelphia packaging facility, tags are applied and EPC-coded on polyethylene bottles in-line at minimum line speeds of 120 bottles per minute.

Tagged bottles, cases, and pallets are then shipped to the Findlay distribution center, where data will be read and authenticated under normal operating conditions.
Cardinal Health uses IBM’s middleware “edge” system for data collection, deployed at the packaging and distribution sites, and at the mail-order facility for further testing of read rates and data flow.

“Our software will be able to transfer the data element to build a pedigree, but we are not doing that here. This pilot is geared to understanding the operational characteristics of RFID in an end-to-end program, using one frequency,” says Jackson.

Though firms such as Cardinal, and Pfizer with Viagra, are coding at the item level in-line, Metcalf says that more customers are interested in getting inlays pre-coded, such as with lot, expiry date, and date-of-manufacture, by their converting partner.

“If you know ahead of time what specific information each inlay will require, it becomes one less item you have to worry about in production. We provide a finished product ready to come out of the box and onto the labeler for application,” he says.


At the PharmaSecure conference in Philadelphia in May, attendees were abuzz with speculation on the outcome of pedigree and RFID state and federal initiatives.
California’s pedigree requirement is expected to be pushed back a year to January 2008, after industry lobbied for more time to comply. The law requires pedigree documents in electronic form for all drugs, with the pedigree started by the manufacturer.

Though Florida’s pedigree law becomes effective July 1 this year, a proposed amendment that has passed in the legislature would ease wholesaler reporting requirements for some transactions.

“This a huge step backward, [driven by] industry lobbyists hoping to hold onto a relatively opaque system. It preserves the honor system. I hope the Governor will veto it,” said Katherine Eban, a conference panelist. Eban is the author of Dangerous Doses, a book that exposes the deficiencies in Florida’s drug distribution system.

“We are seeing acceleration of companies’ adoption of pedigree solutions because of the July 1 deadline. Many are looking at an electronic approach to streamline the document management,” says Brenda Kelly, vice president, Supply Scape Corp. (Woburn, MA).

Florida’s law requires a pedigree document for all drugs, initiated at the wholesaler level. It can be paper or electronic. Kelly explains that Florida requires a pedigree document that provides a detailed history of the chain of custody of the drug and also pedigree authentication. Each owner has to certify that the pedigree data from all previous owners are accurate.

The proposed amendment changes the pedigree requirements for drop shipments, and for direct transactions. Direct transactions involve one wholesaler purchasing product from a manufacturer and selling to a pharmacy, but not physically conveying the product. In the amended version, wholesalers engaged in direct transactions need only provide a statement under oath to the pharmacy that the drug was purchased directly from the manufacturer, Kelly says. The wholesaler must keep the full details of the transaction as internal records and provide them to the Department of Health when requested.

Companies shouldn’t be holding back from implementing RFID, and they should be willing to test and discard solutions, said Robert Kashmer, vice president of information technology, H.D. Smith Wholesale Drug Co. (Springfield, IL), at the conference.

Kashmer said that H.D. Smith has “gone through many iterations of technology” since first piloting RFID in 2003.

Companies that want to be in RFID should not wait or consider the expected one-year delay in California’s e-pedigree law as a reprieve.

“Start now, anyhow. Don’t be afraid to fail. The technology is evolving, so you will have an opportunity to bring another solution in. I have thrown away a lot of equipment and software, and we continue to do that. Our objective has been to implement RFID in a production environment, not just in a lab. Every time we make a change, we ask how it affects that environment.”

H.D. Smith has viewed RFID in terms of patient safety, rather than ROI. “We see the benefit in distribution efficiencies downstream, but that is not happening today,” he said.

Kashmer said that the wholesaler’s partnership with PurduePharma using SupplyScape’s e-pedigree software to track Oxycontin shipments showed that RFID “works fine.”

“We are up and running for Florida.”


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