Bob Trebilcock

Focus on pharma for RFID
January 24, 2008

When it comes to RFID in the supply chain, pharma is one of the bright spots. Not that there has been widespread adoption yet, mind you. But pharma is the industry that seems to be taking the hardest look at RFID outside the four walls of a plant or distribution center.

Why pharma? In a word, mandates. Mandates drive adoption for two simple reasons: When everyone has to do something, you get the economies that come with scale; you also typically get standards. Both drive down the cost of technology, furthering even broader adoption.

That’s clearly been missing in the RFID space, at least since Wal-Mart began to give its suppliers breathing room.

That may, and I emphasize may, change in the pharma space with electronic pedigree initiatives. Requirements to track a drug’s pedigree from the manufacturing plant to the end customer have been in place at the federal level for several years now. Starting in January 2009, new legislation takes effect in California that takes those requirements to a higher level by requiring an electronic database of pedigree records. The mandate requires 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.

Although neither California nor the federal government is mandating which technology has to be used in an electronic pedigree solution, RFID would seem to be an ideal choice for collecting that data. If enough manufacturers, distributors and pharmacies in California can agree to use RFID, we might begin to see the kind of mass adoption the RFID industry has been talking about for years.

That’s why a few suppliers, including Acsis, are coming out with RFID solutions specifically designed to meet e-pedigree requirements. In the case of Acsis, the solution not only captures and manages serialized data—the easy part, according to Andre Pino, Acsis’ vice president and chief marketing officer—it also provides the integration with SAP or a best-of-breed warehouse management system (WMS). That allows companies to incorporate serialized product into existing processes—the hard part, according to Pino.

Pino is optimistic that California’s electronic pedigree mandate will spark the adoption of RFID in pharma. “We’re working with a large pharmaceutical company that is looking to implement RFID in their distribution environment,” he says.

But he acknowledges pharma is still in the early days of RFID adoption. “California is still the first state to require an electronic pedigree and there are a number of questions to be answered,” says Pino. “If we begin to see process improvements as companies meet the mandate, I think you’ll see a snowball effect.”

Whether you’re inside or outside the pharma industry, let me know whether your company is investigating RFID for your supply chain processes by posting a comment below or contacting me at Robert.Trebilcock@verizon.net.   

Posted by Bob Trebilcock on January 24, 2008 | Comments (3)