Special Report: Missing in Action

Pharmaceutical companies big and small including Pfizer, GlaxoSmithKline and Abbott Laboratories have proven to be the front-runners of RFID implementation across the consumer products industry. Maybe it's because the product make-up of most over-the-counter drugs call for robust visibility and tracking of assets in an effort to reduce counter fitting and theft. Or maybe it's simply because the FDA and other organizations are more stringent than Wal-Mart when it comes to sticking by tough mandates. Either way, the pharma industry is moving forward, albeit slowly, with RFID deployments. While the success of these deployments cannot be denied, companies say return on investment is still missing in action.

Voluntary Action
Pfizer's announcement at the NACDS/HDMA drug RFID conference on November 14 that it had successfully tagged its first lots of Viagra that day was an indication that some large pharmaceutical companies are moving ahead with RFID implementations despite reservations which continue to stymie other industry players big and small. All lots of Viagra coming from Pfizer's plant in France into the U.S. will have bottles and cartons tagged starting on December 15, said Peggy Staver, director of trade product integrity at Pfizer U.S. Pharmaceuticals. Pfizer is the first major U.S. drug company to implement RFID, although Staver admitted that the company's implementation is being made relatively easy by the fact Viagra is manufactured in only one plant and on only one packaging line. The company is using 13.56 MHz tags on the bottles and 915 MHz tags on cartons and pallets.

Bruce Cohen, director of packaging technology for GlaxoSmithKline (GSK), also said in an interview at the conference that his company was ready to start tagging one of its drugs, which was among the 31 pharmaceuticals identified by the National Association of Boards of Pharmacy as ripe for RFID tagging. GSK had publicly committed to commencing tagging -- within 12 to 18 months -- back in February 2004 when the Food and Drug Administration (FDA) released a report on drug counterfeiting. "We are almost there," stated Cohen. "We are ready to turn it on." He declined to identify which drug is involved. Cohen tried to make it clear that GSK was honoring its commitment to the FDA, which in February 2004 agreed to give pharmaceutical manufacturers some breathing room to implement RFID tagging voluntarily.

But Randall Lutter, Associate Commissioner of the FDA, told attendees, "From our vantage point today, it appears a voluntary approach may not be enough. At this point we have become concerned about the slow or inadequate progress implementing an electronic pedigree." That warning shook some conference participants, particularly the RFID laggards. In private conversations during the rest of the conference, attendees referred to the FDA as the bogeyman in the ballroom. The FDA will give the industry another shake in either January or February when the FDA Counterfeit Drug Task Force holds a public workshop.

Deployments March Onward
Lutter's impatience aside, the conference sponsored by the National Association of Chain Drug Stores and Healthcare Distribution Management Association featured evidence that the pharmaceutical industry is not exactly mired in RFID mud. Even generic companies, that have been lagging behind on RFID for the most part, are expanding their implementations. Darrell Biggs, a senior engineer and RFID deployment leader for Mallinckrodt Pharmaceuticals, which manufactures generic controlled substances, explained that his company would start tagging bottles and cartons of controlled substance II level generics on a packaging line in a manufacturing facility starting in the second quarter of 2006. He declined to identify which or how many drugs would be tagged.

nterestingly, though, Biggs noted that when the packaging line goes live Mallinckrodt will be using Gen2 tags.
Even though Mallinckrodt is not on Wal-Mart's RFID Top 100 mandate list, the company has been manually tagging generics destined for Wal-Mart in one of its distribution centers, per the mega-retailers request. Mark Pilkington, special projects lead at Mallinckrodt, made it clear that his company had not figured out whether there would be a positive return on investment from tagging, which was unlikely to be expanded to a substantial part of the Mallinckrodt product line since many of its other customers are unlikely to need or want RFID tags on the generics it purchases from the company. - Steve Barlas