HDMA Board Recommends Use of Electronic Product Codes by 2005

RESTON, VA – The HDMA Board of Directors released a position statement setting a goal for manufacturer and wholesaler deployment of radio frequency ID (RFID) tags bearing electronic product codes (EPCs) at the case level by the end of 2005. The HDMA Board statement also sets the goal for pharmaceutical packagers and manufacturers to deploy RFID/EPC technology at the selling unit level by 2007. This aggressive timetable, adopted at HDMA's Annual Meeting in Marco Island, Fla., demonstrates the dedication of the HDMA leadership in their desire to protect and to secure the nation's drug supply.

EPC can be thought of as an item's social security number. When applied to a case of pharmaceuticals, EPC uniquely identifies the product's code, lot number, and serial number. This information can be electronically linked to the products production and distribution history. EPC is embedded on a microchip that is tagged to the case, which allows the product to be read at each distribution point up to the provider or retail outlet.

This technology enables participants in the entire healthcare system to electronically track and trace products as they move from manufacturer to provider, adding a powerful layer of security to the U.S. pharmaceutical industry. It will be extremely difficult for counterfeiters to produce an exact replica of the EPC, and if a tag is reproduced, the system's ability to exactly track product movement would be able to detect the duplicate tag and its location. As an added safety feature, the RFID chip will enable the product to be electronically quarantined when any unit may be damaged, recalled, or affected by heat exposure.

"We at AmerisourceBergen strongly believe in RFID/EPC as the most comprehensive and sophisticated form of security for the pharmaceutical supply chain," says Kurt Hilzinger, HDMA Board member and President and COO, AmerisourceBergen Corporation. "We plan to meet the HDMA Board deadlines in our company, and we will encourage other distributors to follow suit."

To support its statement on RFID/EPC systems, the HDMA Board has called for the establishment of a consistent, industry-wide initiative based on collaborative efforts with all members of the healthcare supply chain to drive the adoption, implementation, and utilization of RFID/EPC technology at all levels in the supply chain. The Board also supports the development of appropriate infrastructures that will track products using unique EPC information.

"The healthcare industry has an ethical responsibility to stymie counterfeit drug activity," says Mark Parrish, HDMA Board member and Executive Vice President and Group President, Pharmaceutical Division, Cardinal Health, Inc. "RFID technology combined with EPC is a viable solution to this serious problem. Cardinal Health supports this system as the best and most effective way for our industry to provide additional layers of security and functionality. We are committed to promoting widespread industry adoption to support this critical technology."

To support its new Board position statement, HDMA issued a new White Paper entitled Protecting Safety and Improving Efficiencies in the Supply Chain – Building a Case for RFID Technology. The paper, developed by the HDMA Collaborative Commerce Committee, recommends that supply chain stakeholders invest in and adopt RFID systems combined with EPC. Further, the White Paper requests that manufacturers and wholesalers, among others, help refine and develop new supply chain protocols that will pave the way for widespread RFID/EPC adoption. The White Paper is available on the HDMA Web site, http://www.healthcaredistribution.org

"HDMA is leading the charge in the healthcare distribution industry to ensure wide adoption and implementation of this important technology," says Paul Julian, Board member and President, McKesson Supply Solutions, McKesson Corporation. "We support EPC for the entire healthcare supply chain, and we at McKesson are already working to implement EPC in accordance with the Board resolution."

HDMA's mission is to secure safe and effective distribution of healthcare products, create and exchange industry knowledge affecting the future of distribution management, and influence standards and business processes that produce efficient healthcare commerce.

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