Mainlining RFID into the pharma supply chain

California's new pharmaceutical e-pedigree law opens the door to widespread use of RFID and creates major new challenges for distributors like Cardinal Health.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 6/1/2007

While drug pedigree requirements have been in place at the federal level for several years now, California's new legislation takes those to a higher level by requiring an electronic database of pedigree records.

Distributor Cardinal Health is working to accommodate California’s new law that requires drugs to be tagged and tracked at the item level.

The e-pedigree requirements, which are scheduled to go into effect on January 1, 2009, require product serialization to be initiated by a drug manufacturer at the unit, or item, level. That will allow companies to electronically track all of the transactions involving a product from the beginning to the end of the supply chain.

RFID would seem to be the ideal technology to capture that information. However, the law does not require RFID, allowing manufacturers to use bar codes. Early indications are that pharmaceutical distributors like Cardinal Health will have to accommodate multiple data capture technologies.

“We are concerned about how we're going to make all of these technologies work in a single, highly automated environment to get the pedigree information at the unit and case level and maintain the high level of throughput that we have now,” says Julie Kuhn, Cardinal Health's vice president of operations.

To work out those issues, Cardinal Health announced last month that it will integrate RFID technology into the operations of its Sacramento, Calif., pharmaceutical distribution center this fall to prepare for California's drug pedigree requirements.

“Since we have more than one facility in California, once we figure out the right solution in Sacramento, we can replicate that across the state and ultimately across the company,” says Kuhn. “It's an opportunity to transform the way we do things in the health care industry.”

However, as Cardinal Health sets about designing a solution for Sacramento, it's also learning that there are unique challenges that have to be overcome.

“We know that some manufacturers are planning on using Gen 2 UHF tags,” says Kuhn. “But other manufacturers are planning to use Gen 2 tags on pallets and cartons, and HF tags at the unit level. Others are experimenting with 2D bar codes at the case and unit level.” And, of course, traditional linear bar codes are still widely used.

Bottom line: Cardinal Health may have to install one type of RFID reader for Gen 2 tags, another reader for HF tags, and imaging systems to read 2D barcodes, since a basic laser-based bar code scanner can't read a 2D bar code.

In addition, Kuhn adds, this complicated data collection must integrate with a highly automated materials handling system that includes conveyors and an A-frame dispensing system.

Why does that matter? Because the different technologies have different read rates. “You can't read an HF RFID tag as fast as you can read a UHF tag,” says Kuhn. “That means our conveyor can't run any faster than the slowest read rates at the scan tunnel.”

That could impact order cut-off times. “Right now, we take orders up until 8 p.m. and start shipping at 5:30 in the morning,” says Kuhn. “This complicated infrastructure could inhibit our ability to maintain those cut-off times.”

The good news: Cardinal Health will have more than a year to optimize the system before the e-pedigree requirements go into effect. If successful, the company will look for other opportunities to use RFID.

“One of the things we're looking for out of Sacramento is how we can get incremental value from RFID beyond the e-pedigree,” says Kuhn. “We believe it's there, and when we discover it, we'll make that use more widespread.”