VeriChip Deals Could Signal RFID Healthcare Boost
Human-implantable radio frequency identification (RFID) chip manufacturer VeriChip recently made the first sale of its radio frequency (RF) infant protection system in Canada and is in talks with the U.S. military about another under-the-skin chip.
VeriChip announced Aug. 24 that the Brampton Civic Hospital in Ontario had purchased its above-the-skin infant protection/wander prevention RFID tag system for $750,000. These VeriChip RF locating technologies will be installed in the new hospital, scheduled to open in the fall of 2007.
The next day the company confirmed it had held informal talks with U.S. Navy and Air Force officials to discuss its VeriMed patient identification system. VeriMed is used beneath the skin.
Both moves suggest to many experts that RFID usage in the healthcare arena is ready to climb.
“I’m pretty bullish on it,” Hesh Kagan, an analyst with Invensys Process, told PIR Sept. 5. “The big hurdles are being knocked down,” he said. Invesys is a global automation, controls and process solutions group whose clients include Schering-Plough and Eli Lilly.
Concerns Over RFID
Those hurdles include security and privacy fears, experts agree. “Security is still a concern,” Kagan said.
But he believes that RFID security issues are mistakenly focused on the technology. The real security and privacy weaknesses, he said, tend to have more to do with how the systems are implemented and used.
“It’s not a technical issue, but the human factor” that needs to be addressed, he said.
Perhaps the biggest challenge, Kagan said, is that information technology personnel usually aren’t prepared to handle RFID usage. “Wireless networks require more attention than wired ones,” he said. “This is more of a management issue,” he added.
Many in the battle against counterfeit drugs are advocating RFID, with the FDA leading the charge.
In June, in what is viewed as an effort to push industry to more quickly adopt RFID against anti-counterfeiting, the agency said it will “fully implement” regulations related to the Prescription Drug Marketing Act of 1987. Those regulations require drug distributors to provide documentation of the chain of custody for drug products throughout the distribution system.
Meanwhile, market analysts including Gartner and IDTechEx are predicting big things for RFID. A recent Gartner report, “RFID is the Limit,” predicted that the healthcare delivery and pharmaceutical industries will be among the fastest adopters of the technology.
And the global market for RFID tags will surge to $2.1 billion by 2016 from $90 million this year, predicted a June IDTechEx survey.
RFID usage throughout the supply chain in healthcare should climb in part because companies are beginning to see the business and marketing cases for using it, said PanGo Senior Vice President Mike Braatz. His company has been involved with dozens of hospital asset-tracking implementations using RFID technology.
“RFID usage in the past was more mandate driven,” he said. Big suppliers like Wal-Mart pressured their smaller partners and vendors to use RFID, he added. “The business case wasn’t being made” and many who adopted RFID did it only out of fear of losing favor with a big partner, he said.
Companies Are Coming Around
That may be changing as more companies see RFID as a potential differentiator for them in the marketplace, Braatz told PIR.
Embedding these tags is one possible way devicemakers will differentiate themselves and be able to charge more — even in commodity markets like infusion pumps, PanGo officials believe.
Big players including IBM are getting into the healthcare RFID game, too. Last month IBM unveiled an RFID system for pharmaceuticals, designed in part to fight counterfeit drugs. “The benefits of RFID are significant throughout the supply chain,” IBM RFID guru Paul Chang told PIR then. — Michael Causey