The Drug Industry Self-Polices with RFID
THEFT PREVENTION – The makers of popular prescription drugs have found a new weapon in the fight against thieves and counterfeiters: the tiny and controversial radio frequency identification (RFID) chip. Purdue Pharma, the manufacturer of the painkiller OxyContin, is now using RFIDs to track shipments of its theft-prone drug, and Pfizer plans to start putting the radio tags on bottles of its widely counterfeited Viagra drug by the end of 2005. The U.S. Food and Drug Administration gave RFID deployment a boost when it recently published guidelines to help other drugmakers get started before RFID labels become mandatory in 2007. "With RFID, the drug industry will be able to police itself for the first time," says Aaron Graham, vice president and chief security officer at Purdue Pharma and a former special agent at the Drug Enforcement Administration who has also worked undercover to combat international drug counterfeiting. Graham says it's difficult to estimate the black market for prescription drugs but that the World Health Organization previously stated 7 percent of the world's drugs are counterfeit. "Having met the people in Asia and Latin America who are involved in counterfeiting, I know that it's more than anecdotal," Graham says. While secondary wholesalers can now falsify the origin of a prescription drug in the supply chain, RFID will make it virtually impossible for counterfeit drugs to enter the legitimate supply chain. Right now, wholesalers can buy drugs that have been smuggled into the country and send them on to pharmacies without much difficulty, Graham says. With RFID tags, pharmacists will be able to tell if the drug did not come from the manufacturer. Law enforcement officers using handheld readers also will be able to quickly check whether bottles they recover have been reported stolen. Graham says he often gets calls from state troopers who have found OxyContin bottles on a suspect. "Using RFID we'll be able to trace the bottles to specific pharmacies that have been robbed," he adds. "For the first time, the industry will be able to help law enforcement here." While RFIDs can help stem financial losses due to theft, the technology doesn't come cheap. Purdue Pharma plans to invest $2 million in infrastructure and 30 cents to 50 cents for each RFID label. The company also plans to donate handheld readers to each FBI field office and various other law enforcement agencies. "Anybody concerned about patient safety needs to make this investment," Graham says. Chuck Nardi, Purdue Pharma's information officer of commercial systems, says data read from RFID labels will be integrated into the company's SAP system and provide valuable information on "which customers got which bottles on which date." For the moment, RFID labels will go on only the larger bottles sent to pharmacies, not the individual customer bottles. RFID won't be a cure-all for the theft and counterfeit problems that plague the drug industry, however, says Forrester analyst Laura Ramos. "Until other industries such as retail are more successful with RFID, I would be concerned [the drug companies] don't have a good example to follow," Ramos says. Ramos also points out that efforts to track the drugs may not work if RFID isn't widely adopted by wholesalers and others in the distribution chain. "Until we figure out a way to regulate the smaller distributors out there, there will be doors open for fraud, counterfeit and theft to occur," she says. Graham and Nardi counter that they are already shipping the RFID bottles to retailers Wal-Mart and H.D. Smith Wholesale Drug and are receiving data from pharmacies that have RFID readers. While not fail-safe, "RFID is the best technology I've seen in 20 years to identify counterfeit drugs and deter counterfeiters," Graham says. Reprinted from CIO Magazine, February 1, 2005. Content is copyrighted material and may not be duplicated, distributed, transferred, transmitted, copied, altered, sold, used to create derivative works, or otherwise misused. |
