RFID exploding into pharma industry

By Kirsty Barnes

- Last updated on GMT

Related tags Rfid Pharmaceutical industry Pharmacology

Adoption of RFID hardware and software throughout the pharma
industry is about to explode, spurred on by the push from industry
organizations such as the US Food and Drug Administration (FDA) to
implement RFID tags to combat sales of fake drugs, according to
reports by market research analysts Gartner and Frost &
Sullivan.

>Frost and Sullivan​ estimates that the revenue from the healthcare and pharmaceutical industries investing in RFID technology will rise almost sixfold, from 2004's total of $370m (€312m) to $2.3bn in 2011.

Over the next couple of years, RFID is likely to see a swift uptake within the the healthcare market and several companies throughout the US and Europe are already conducting pilots on the use of this technology.

"There is a significant focus on using RFID in pharmaceutical manufacturing because of the FDA's interest in using RFID tags to help combat diverting and counterfeiting,"​ said Jeff Woods, research vice president at >Gartner​.

"If regulatory activity proceeds, we'll likely see the beginnings of widespread tagging around 2007,"​ he said.

However, barcoding is still required by many of healthcare's governing bodies, and given the high price of RFID, barcodes are unlikely to disappear in this industry before at least 2015, said Frost and Sullivan research analyst Priyanka Gouthaman.

Counterfeit pharmaceuticals is one of the most critical issues facing the pharmaceutical industry today. The business of selling fake drugs is a burgeoning global industry, estimated to grow 13 per cent a year to reach $75 bn in 2010, a 92 per cent increase from 2005 - compared to just 7.5 per cent estimated annual growth for global pharmaceutical commerce.

RFID is an automated data collection technology that uses radio frequency waves to transfer data between a reader and an RFID tag to identify, track or locate that item. RFID does not, specifically, require physical sight or contact between the reader/scanner and the tagged item.

According to many, RFID is set to halt this growing trend in counterfeit sales and save drug companies billions in lost revenue by radically changing the way the drug supply chain works.

Spending on worldwide RFID track-and-trace technology in general has jumped up 40 per cent from 2004 to reach over $500m worldwide in 2005, and will accelerate in late 2006 and 2007 to reach over $750m, and as industries realize the enormous potential of this technology, worldwide RFID spending is set to surpass $3bn in 2010, according to Gartner.

Related topics Drug Delivery QA/QC

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