Cardinal's RFID pilot shows promise and perils

By Emilie Reymond

- Last updated on GMT

Related tags Rfid Cardinal health

Cardinal Health has announced the results of its radiofrequency
identification (RFID) tag pilot, the first to test the viability of
the technology across the whole supply chain, from item through to
case and pallet level.

The US-based manufacturer launched the pilot in February at its distribution facility in Ohio and said the outcome of the tests showed promising results but there were still gaps that needed to be filled.

"Cardinal Health's test of RFID under real-world conditions has demonstrated that the technology has real promise to provide an added layer of safety,"​ said Renard Jackson, vice president and general manager of global packaging services for Cardinal Health.

The pilot programme tested whether ultra-high frequency (UHF) RFID tags could be applied, encoded and read at normal production speeds during packaging and distribution of pharmaceuticals.

"While our pilot demonstrated that using UHF RFID technology at the unit, case and pallet level is feasible for track and trace purposes, a great deal of additional work needs to be undertaken by stakeholders across the industry to address significant challenges,"​ said Jackson.

To conduct the pilot, RFID tags were placed on the labels of the drug package then the company encoded the electronic product code (EPC) standard data at the unit, case and pallet levels during the packaging process.

Finally, the products were then shipped to a Cardinal's distribution centre in Findlay, Ohio, where the data was read and authenticated while products were handled under normal operating conditions.

In the final stage of the pilot, the tagged products were sent to a health-care provider to further test read rates and data flow using the same technology as the distribution centre.

According to Cardinal Health, as far as labelling and encoding is concerned, results from the trial suggest that it is feasible for RFID tags to be inlaid into existing pharmaceutical label stock, and the tags can be applied and encoded on packaging lines at normal speeds.

Meanwhile, read rates at item level varied widely depending on where the readers were located throughout the supply chain.

Rates were higher at item level - in excess of 96 per cent - when reading individual cases one at a time.

However, unit-level read rates were not reliable when attempting to read units in a full pallet of products, as the firm expected.

Results at case level show high reliability during full pallet reads but didn't reach 100 per cent in all situations, the company said.

Furthermore, before the shipping from the distribution centre, where individual bottles were placed in tote containers and mixed with other untagged products, the read rates for individual items during quality control stage were acceptable for track and trace, the firm said.

However, rates plummet when additional reading was conducted just before the shipping and when the products arrived at the pharmacy.

While Cardinal said RFID technology allows the verification of drugs along each step of the distribution path to add an additional layer of security and lessen the chance of counterfeit drugs entering the supply chain, it said that several challenges remain before the system can be adopted by the industry.

The firm said that the process needed to achieve case-level reads superior to 99 per cent at all case reading stations, while rates at item level should also reach this level when the reading is conducted at the distribution centre and at the pharmacy.

Cardinal also stressed that barcode technology shouldn't be scrapped altogether, but instead used as complementary and redundant technology to RFID.

Another drawback of the new technology is the price - while the tags are relatively cheap to put in place, companies need to find a way of managing the infrastructural costs resulting from implementing RFID.

Counterfeit drugs is one of the most critical issues facing the pharma industry today. The business of selling fake drugs is a burgeoning global industry, estimated to grow 13 per cent a year to reach $75bn (€58.5bn) in 2010, a 92 per cent increase from 2005 - compared to just 7.5 per cent estimated annual growth for global pharmaceutical commerce.

Meanwhile, only few manufacturers, such as GlaxoSmithKline, Pfizer and PurduePharma, have adopted the technology, and even then only for particularly commercially successful and vulnerable products, such as Viagra, and only in just some markets.

This scepticism is set to persist until the industry finds solutions to overcome the hurdles involved in RFID implementation.

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