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RFID Helps Secure Drug Distribution Chain

July 1, 2005
The nation's healthcare distributors and manufacturers are developing electronic pedigree systems to combat counterfeit drugs.

Purdue Pharma L.P. is shipping its synthetic morphine-based Oxycotin painkiller with radio-frequency identification (RFID) tags on each bottle. Pfizer (N.Y.) will be shipping RFID-tagged bottles of Viagra sold in the U.S. by the end of 2005. Both prescription pharmaceuticals are among the world's most widely counterfeited drugs. Radio-frequency identification tagging is an important part of the pharmaceutical industry's effort to combat counterfeit drugs in the supply chain. The U.S. Food and Drug Administration (FDA, Rockville, Md.) offers guidance about counterfeit drug issues in its Combating Counterfeit Drugs report. In a May 2005 update, the agency reported that it sees "tremendous progress" being made in developing a standard electronic track-and-trace system using RFID for widespread use in the drug distribution system. FDA says it is " optimistic" progress will continue at a rapid pace and that it would like to see widespread use of electronic-pedigree (chain-of-custody) systems in the supply chain by 2007. That's easier said than done.

"The FDA has done everything they can to make this possible," says Gary Dolch, executive vice president of quality and regulatory affairs at Cardinal Health (Columbus), a manufacturer and distributor of prescription drugs. "The reality is that the technology is just not where it needs to be. Read rates are too low, and the range of applicable products is limited."

Not only does the technology need to develop, EPCglobal (Lawrenceville, N.J.), the nonprofit organization responsible for establishing automatic identification standards, has not yet released standards the pharmaceutical industry can use to share data online. But the nation's drug distributors are not waiting for standards or for the technology to mature.

"Our main objective is to embrace technology that will help secure the pharmaceutical pipeline," says Rob Kashmer, vice president of information technology at H.D. Smith, Purdue Pharma L.P.'s distributor. H.D. Smith is a large privately held national wholesale drug distributor with six distribution centers across the United States in California, Illinois, New Jersey, Texas and Florida. It is currently collaborating with Stamford, Conn.-based Purdue on an electronic-pedigree pilot project.

As part of the pilot Purdue is applying RFID tags, approved by the FDA, to bottles of Oxycotin that are sent to H.D. Smith and Wal-Mart. They then track relevant data to learn where each bottle has been and where it is going. E-pedigree software from SupplyScape (Cambridge, Mass.) tracks the flow of serial and lot numbers and RFID-tag data. Project information is shared through a secure, internal database that only H.D. Smith and Purdue can access.

"We will comply with the standards once they are developed. In the meantime, we have developed our own standards," Kashmer explains.

Currently, most manufacturers are not putting tags on palettes or cases, but some of their healthcare distributors are.

Kashmer says manufacturers need to put RFID tags on their products as they come off the production line because there are too many opportunities to introduce counterfeits into the supply chain. In addition, he says it is too expensive for drug distributors, who operate on thin margins, to purchase tags and hire extra labor to apply them. Kashmer says the manufacturers are starting to come onboard and are building business cases for e-pedigree systems.

Pfizer and Cardinal Health both took part in a pilot project in 2003-2004, Jumpstarting RFID/EPC, sponsored by Accenture, a supply-chain consulting firm. Participants included drug manufacturers, distributors, retailers, the Healthcare Distributor Management Association (HDMA) and the National Association of Chain Drug Stores (NACDS). Products from each company went through a simulated RFID system to identify challenges and problems.

Jumpstart's objective, says Jamie Hintlian, a partner with Accenture, was to see if serializing product at the item level versus cases or pallets would enhance the safety and security of the supply chain. The project's final white paper concluded it would. The paper also identified areas for improvement: the cost of tags needs to come down, the technology needs to mature and there needs to be improvements in tag readability and reliability.

"As an industry," explains Peggy Staver, Pfizer's director of trade product integrity, "we are trying to address not only the technology issues but also the business processes that would be required to support implementation of RFID. The goal is to ensure a safe and secure prescription-drug supply chain." The Jumpstart project provided a forum for participants to gain valuable hands-on experience using the technology and to discuss what business processes would be required to support RFID technology, and what information trading partners would need to share.

Staver emphasizes that there is no substitute for experience. "You learn a lot once you try and bring something into your own facility and see, for example, if you can read RFID tags." H.D. Smith's Kashmer agrees. This technology is not plug-and-play. It needs to interface with other systems, which takes time to work out, he says. "We need every part of our industry, from the manufactures to the distributors, to begin pilot projects."

Pharmaceutical manufacturers and distributors need to learn the nitty-gritty of applying, reading, writing and modifying tags. Then they have to learn how to generate, apply and manage millions of EPC numbers, associate them with every unit produced, and finally, how the items will be shipped, and authenticated at pharmacies.

Cardinal Health's director of business integration, Pete Beckwith, says one of the things they learned with JumpStart was if tablets come in configurations of greater than 48, their RFID readability drops dramatically. "Now manufacturers and packagers are going to have to change the configuration of the units they are shipping in order to get better readings."

Until there is a standardized industry e-pedigree system is in place, Pfizer is in the process of developing unique UPC numbers or electronic product codes that can be used for e-pedigree tracking. Pharmacists would, through a Web-based application, be able to verify Pfizer issued the number within the last 60 days and show the item's chain of custody.

"So as long as [pharmacists'] business practices are also sound, they can have a high level of confidence that the package they are authenticating is in fact a genuine Pfizer package," Staver says.

The industry and the FDA acknowledge electronic track and trace is only one tool for thwarting counterfeits. Other measures used by manufacturers include anti-counterfeiting packaging technologies. Also, several states have or are beginning to adopt tougher laws regarding the movement of drugs through the supply chain and the licensing of drug distributors.

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