Two Years In, RFID's Not The CureTwo Years In, RFID's Not The Cure

Drug distributor AmerisourceBergen is launching an RFID test, another step forward for a technology that seems destined for the supply chains of the pharmaceutical industry. Yet distributor Cardinal Health threw cold water on that advancement with its conclusion that, after two years of testing, RFID isn't ready for prime time.

What's the problem? Technologies and processes need to improve. Cardinal Health says RFID tags on product cases could be read just three out of four times in some instances; it wants accuracy upwards of 99%.

That's not all. Not enough suppliers, distributors, and retailers have demonstrated a commitment to RFID; standards adoption continues to lag; and privacy worries haven't been resolved. "This technology has some promise," says Renard Jackson,VP and general manager of Cardinal's global packaging business. But "we'd say there's additional issues and concerns we need to overcome."

Cardinal Health does report some encouraging results. The accuracy rate for reading RFID tags on individual items ran about 96% when scanning cases one at a time in distribution centers.

Cardinal Health's conclusions may be designed, in part, to influence the expectations of the Food and Drug Administration, which has indicated RFID is the best track-and-trace technology available to help prevent drug counterfeiting and has openly criticized the industry for not moving faster to adopt it. Cardinal Health plans to discuss its test results and concerns with the FDA, Jackson says.

Another of Cardinal's conclusions is that certain biological drugs may require separate track-and-trace technology, since heat generated from radio frequency waves could alter those drugs. Amgen's Epogen, a protein-based drug used for treating anemia in dialysis patients, is among those cited by the industry as potentially unsuitable for RFID. The FDA is conducting its own studies on RFID and biological drugs; RFID use on such drugs wasn't permitted in the Cardinal pilot.

AmerisourceBergen will use IBM software based on Electronic Product Code Information System specs to track drugs and share inventory data with manufacturers.