RFID/EPC Pilot Study Completed

Research and development firm Accenture has announced the initial results of an ambitious radio-frequency identification (RFID)/ electronic product code (EPC) proof-of-concept study. The study looked at the shipping, tracking, and tracing of 13,500 pharmaceutical packages throughout the supply chain. Abbott Laboratories, Barr Pharmaceuticals, Cardinal Health, Johnson & Johnson, McKesson, Pfizer, and Procter & Gamble were among the pharmaceutical manufacturers and distributors taking part in the eight-week study.

The study, dubbed Project Jumpstart, involved shipping bottles of prescription medications with RFID tags. The project’s goal was to track the bottles from the packaging line to distribution centers to distributors, to retailers’ distribution centers, and ultimately to two high-profile retail pharmacies.

Track-and-trace technology was provided by RFID chipmaker Matrics and software vendor Manhattan Associates. In addition, the project group worked with FDA’s anticounterfeiting task force on how RFID/EPC technologies might mitigate the risk of counterfeit drugs. The Healthcare Distribution Management Association (HDMA) and National Association of Chain Drug Stores (NACDS) also participated.

In the test, which took place from October 2003 to September 2004, drug makers applied RFID tags to bottles of two types of medications for a total of 10 products. Specific drug names were not disclosed. The manufacturers chose larger bottles used by pharmacists to fill patient prescriptions so the tags wouldn’t block label information. They wanted to assess the business value of working with emerging RFID/EPC technologies, standards, and processes, with the goal of working toward the establishment of an industry operating model. The project team designed, tested, implemented, and verified a complete supply-chain solution. The team worked through 16 business scenarios in 15 locations.

“We set out to see if supply-chain performance could be improved using RFID/EPC,” says Jamie Hintlian, a partner in Accenture’s Health & Life Sciences practice. Accenture acted as the study’s program manager. “We used real product and a real fulfillment process. That’s why this test was so exciting. We showed that RFID was proven to be effective.”

According to Hintlian, the study showed that RFID/EPC can help satisfy regulatory and retailer requirements, increase product security and consumer safety, enhance order accuracy and labor productivity, and increase the efficiency and speed of recalls and returns. Additionally, the project team found that the RFID/EPC system:

• Effectively tracked selected pharmaceutical products from the manufacturer’s distribution facilities through the supply chain to the point of
• Demonstrated the ability to manually tag pharmaceutical units and cases for selected products.
• Provided individual-unit serialization that has the ability to enable track- and-trace functionality and help prevent counterfeit product from entering the supply chain.

Also, according to Hintlian, the team found that the verification stage demonstrated that RFID/EPC tags and readers were successful as mechanisms for tracking and tracing the product. Specifically, solid-dose packaging and blister packaging could be read and tracked well, he says. The verification stage also demonstrated the ability of the project to use RFID/EPC technology to execute 16 pharmaceutical industry scenarios at all 15 locations for all 10 products.

Based on the results of the study, the team concluded that this new operating model will ultimately require unit-level serialization of products and will create the potential for systematic detection of counterfeit products. It also assessed the potential for RFID/EPC to electronically address important regulatory mandates and helped establish business rules and processes to facilitate returns.

According to the full report recently published by Accenture, certain obstacles on EPC tags were overcome. For example, the team showed that human-readable numbers can go on tags and be used as a method of redundancy in case the tag is not functioning.

The project underscored the importance of meeting infrastructure prerequisites to prepare for industrywide adoption of RFID/EPC. Also, the selected technology suite proved appropriate and workable for the parameters of the project.
The Project Jumpstart study group did have some cautionary advice, however. The study’s authors determined that full-scale RFID/EPC implementation on an industrywide basis will be more complex than many believe, requiring more time than anticipated to refine issues that are unique to the pharmaceutical industry. For example, requirements for systems and packaging, especially in addressing data sharing and consumer privacy concerns, are expected to present greater costs and efforts than in other industries.

The study group also suggested that some processes needed significant further development before being truly effective. These include increasing the efficiency of returns and recalls, as well as increasing labor productivity.

Project Jumpstart’s next phase, a similar eight-week study, will include applications for foil and liquid, according to Hintlian.

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