The global market for RFID systems in the pharmaceutical industry reached just $9.3 million last year, according to research firm Venture Development Corp. (VDC), but researchers expect that number to grow by more than 10 times over the next several years, with revenue shipments exceeding $96 million in 2008.

While wide-scale deployments are limited today, says VDC, the increasing number of pilots and small-scale rollouts suggests users are becoming more aggressive with RFID adoption.

Pharmaceutical manufacturers and distributors, however, are still struggling to determine how RFID technology can benefit their operations and provide an internal return on investment. Many are turning to solutions providers and systems integrators for help in determining their specific business case for RFID and resolving adoption and integration challenges.

One of those challenges, according to VDC, is determining whether RFID will be used solely for outbound compliance or if it will become a part of the overall enterprise operation. Others include such basic challenges as selecting the best physical location for the tag and identifying the points at which tags should be applied and read.

"Even if the true benefits will not be realized for several years," says Michael Liard, director of VDC's RFID practice, "establishing that base RFID infrastructure today is critical for future supply chain integration."

VDC warns, however, that RFID is just one way to tighten the supply chain, and is not a cure-all for the pharmaceutical industry.