Acknowledging that the pharmaceutical industry won't realize the full potential of RFID technology for several years, Pfizer has begun placing RFID tags on bottles of Viagra, its popular---and often counterfeited---impotency drug.

RFID technology is being added to all packages of Viagra sold in the U.S. to enable pharmacies and wholesalers to verify the unique electronic product code, or EPC, on Viagra packaging. Pfizer says it has invested several million dollars in the technology since it first announced it was planning to use RFID tags back in November 2004. Pfizer says that Viagra is one of the most counterfeited medicines in the U.S.

Although Pfizer claims to be the first pharmaceutical company to utilize a comprehensive program of this type focused on EPC authentication as a means of deterring counterfeiting, Purdue Pharma has been using RFID tags for over a year to prevent theft and counterfeiting of its painkiller oxycontin. Purdue even equipped law enforcement officials with RFID readers so they can track stolen bottles of the drug.

"The primary goal for adding the technology is to enhance patient safety," says Tom McPhillips, vice president of Pfizer's U.S. Trade Group. "We want pharmacists who fill prescriptions for Pfizer medicines, and patients who use those medicines, to have increased confidence that they are receiving authentic product and not a potentially dangerous fake. We are creating additional barriers for criminals who might attempt to counterfeit our products."

RFID tags incorporate the EPC into each package, case and pallet of Viagra. Pharmacists and wholesalers use specially designed electronic scanners that communicate the code over the Internet to a secure Pfizer Web site.

The company's application of RFID is not yet capable of "tracking and tracing" medicines through the distribution system. "Track and trace" requires that all parts of the supply chain invest in compatible technology and agree to capture and share information about product movement. Pfizer says it will continue to explore the uses of RFID -- including track and trace -- during 2006.

Pfizer's application of RFID also does not allow for the collection of any patient information. The company is working cooperatively with standards-setting bodies, state governments, the Food and Drug Administration, industry groups and its customers to establish policies for the widespread application of RFID in the future.

Analysts are predicting that 2006 will be a breakthrough year when it comes to the use of RFID technology within the pharmaceutical sector. Research firm Frost & Sullivan released a report late last year that predicts RFID will grow at an annual rate of about 30 percent for the next five years, from an aggregate value of $370 million last year to $2.3 billion in 2011. These values include money spent on hardware and software, professional services, integration, and applications.

Still, Pfizer anticipates that it will take several years before RFID is applied broadly throughout the pharmaceutical industry. Cost will be a significant consideration, as well as the readability and reliability of RFID tags. Standards must be developed to govern technology and data exchange. And RFID also will require the pharmaceutical distribution industry to change the way it does business.

In addition, the Frost & Sullivan report points out that the late adoption of bar-code technology by the market has meant that the technology is still popular among pharmaceutical and other healthcare applications. "The current price of RFID technology would also suggest that a complete replacement of bar codes is unlikely and co-existence of both technologies is expected for the next 10 years," says Frost & Sullivan research analyst Priyanka Gouthaman.

Source: DC Velocity