First US drug wholesaler adopts RFID
Wal-Mart in adopting a system of electronic product code (EPC) and
radiofrequency identification (RFID) to track controlled
pharmaceuticals.
HD Smith - the seventh largest wholesaler in the US with sales of more than $1.5 billion - is planning to install an RFID-based system at its drug distribution centre that will be used to track products entering and leaving the caged unit handling controlled drugs.
The company claims to be the first wholesaler in the US industry to adopt the technology.
Currently, when an order is shipped, each item's bar code is scanned to assure accuracy. Using RFID technology, the pharmaceuticals are placed in a tote and passed through an RFID portal. All items are identified from their EPC tag, simplifying the shipping process. This is the first step in enabling electronic pedigrees, a history of where the drug has been, throughout the pharmaceutical supply chain.
Robert Kashmer, vice president of Information Technology at HD Smith, said: "We see benefits in two key areas, namely, product handling/logistics and product/supply chain integrity." He noted that the system will allow goods to be tracked at the bottle serial number level.
RFID tag and reader supplier Matrics is supplying the 1 inch square RFID tags. They are designed to be small enough to fit on pharmaceutical bottles and packages.
Meanwhile, in a second phase of the project, of HD Smith' will implement EPC at a retail unit in Springfield, Illinois, that will receive the tagged items, adding another point to the electronic pedigree, which is currently all compiled manually.
Wal-Mart got the ball rolling on the adoption of RFID by forcing drugmakers who supply controlled prescription drugs - i.e. those that are at risk of abuse - to adopt RFID tagging.
The retailer had insisted that suppliers of controlled substances adopt a full RFID-based system to allow the supply chain to be monitored and prevent drugs getting into the wrong hands. The idea was that there would be less resistance to adopting the technology for these high-value items, given that the price of RFID tags remains relatively high at 25 to 30 cents apiece.
However, the deadline for compliance has slipped to the end of this month, as suppliers have had difficulties meeting the earlier target. Wal-Mart operates around 3,000 pharmacies in its stores.
At a meeting earlier this month, Wal-Mart re-iterated its demand that suppliers bringing products into three of the retail giant's distribution centres and 150 stores adopt RFID technology by January 2005, spiking the hopes of some companies who have been seeking an extension due to the complexity of the process.
By June 2005 the requirement will be extended to three additional distribution centres and another 100 stores, and by October of that year 800 outlets will be in the scheme.
Earlier this year, the US Food and Drug Administration (FDA) issued a report which put RFID firmly at the centre of efforts to combat pharmaceutical counterfeiting and diversion. The initiative stands alongside another project aimed at adopting unit dose level bar coding of pharmaceuticals.
