RFID in Pharmaceuticals

An Idea Whose Time Has Come

Abstract

The discussion has moved from if to how for many major pharmaceutical manufacturers. The barriers to adoption are down and the benefits are up. So you may have a good reason to look at solutions now.

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It seems every Pharmaceutical and Life Science conference and publication has something about product quality and the benefits of effective cold chain management, serialization, and product traceability. And that’s good. The conversation has begun. But with California’s e-pedigree regulations for 2015 looming, and increased growth in temperature-sensitive biopharmaceutical products, major pharmaceutical and distribution firms have been declaring their plans to implement serialization and case/carton level RFID.

There are a number of catalysts to adoption, including the many real and growing concerns (see figure 1) that RFID can solve for the industry. In aggregate, these concerns provide substantial motivators to act now. The Center for Medicine in the Public Interest (CMPI) stated that in 2010 $75B—that’s billion—of revenue was lost due to counterfeits in the US alone. And that does not include the potentially life-threatening impacts on human beings, what to say of the costs for investigation, recalls, insurance, and damage to brand and trust. Government agencies across the globe have declared stricter regulations and have stepped up their vigilance. Violations span from the merely mundane (such as improper labeling) to life-threatening events such as counterfeit ingredients that are not effective or cause death.

In addition, the cost of managing the global pharmaceutical supply chain is astronomical. From the global economies to the local municipalities, as well as healthcare providers and payor organizations are all putting pressure on the industry to reduce costs. That won’t happen without a granular (stockroom and shelf-level) yet global view across the chain. A lesson learned from industries that have more integrated supply chains is that 30% to 50% of supply chain costs can be cut while increasing their services and markets. That means real profits. Profits can be put into innovating the next generation of life-saving cures.


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