Efficiency, Anticounterfeiting Will Propel Increased RFID Adoption

The global market for radio-frequency identification (RFID) tags will surge to $2.1 billion by 2016 from $90 million this year, says a new survey by IDTechEx.

“We detect that the big pharmaceutical companies are quite keen on RFID,” IDTechEx’s Peter Harrop told PIR. “We’ve seen a big change in the past year or so as drug companies become more interested” in the technology and launch RFID projects, he said.

For example, Purdue Pharmaceuticals is in talks with several major drug wholesalers about attaching RFID tags to greater numbers of its popular painkiller, OxyContin, the company’s associate director of supply chain systems told PIR last month (PIR, May 10). Purdue Pharma’s initial pilot program to tag bottles occurred around the same time the FDA’s Center for Drug Evaluation and Research strengthened its warnings for the drug in early 2004.

FDA Weighs In

In addition to Purdue Pharmaceuticals, Harrop cited RFID initiatives from Pfizer, AstraZeneca and GlaxoSmithKline that are propelling the market forward. Many pharmaceutical companies expect the FDA to push for RFID by the end of 2006 or in 2007, he added. “The FDA will legislate if progress is inadequate in its view,” he said.

The FDA is getting lots of positive attention worldwide for its emphasis on RFID, Harrop said. “People admire the FDA for taking an effort in anticounterfeiting” in a way that the European Union arguably is not.

The global RFID market will soar over the next 10 years for several reasons, according to IDTechEx’s “RFID in Healthcare 2006-2016” report featuring 72 case studies, supplier profiles, technology analysis and 10-year forecasts. “Primarily, [the hike] will be because of item-level tagging of drugs and real-time locating systems for staff, patients and assets to improve efficiency, safety, availability and to reduce losses,” Harrop said.

Further, the tagging of blister packs and the plastic bottles used by patients — while primarily a U.S. “phenomenon driven by the need for improved anticounterfeiting” — will also give drug firms and retailers far greater theft deterrence and improved stock control and recalls, Harrop said.

But the industry needs to agree on RFID standards, Harrop warned. “The frequency employed [as the standard] is as yet uncertain because ultra-high frequency tags have been delivered to Wal-Mart on millions of drugs, but Pfizer and GSK are fitting millions of high-frequency (HF) tags on similar packages, he noted.

HF is generally favored today for relatively small items, Harrop said. But UHF tags may offer some advantages for real-time tracking and error prevention, he noted. — Michael Causey