RFID set for explosive growth

By Anna Lewcock

- Last updated on GMT

Related tags: Rfid, Supply chain management, Radio-frequency identification

The use of radio frequency identification (RFID) technologies in
the healthcare industry is set for explosive growth over the coming
years as teething problems from its formative years are overcome.

Although RFID solutions in the healthcare industry are estimated to come hit around $297m in 2007, the sector is set to see incredible growth over the next few years, projected to top $1bn by 2010, and reach a staggering $3.1bn by 2012. The figures, compiled in a report published this week by Kalorama Information, illustrate the increasing interest in RFID in the healthcare sector, and the growing optimisation of the technology platform. Healthcare is the largest and fastest-growing industry segment worldwide, with a value estimated at over $6 trillion in 2005, and growing at a healthy rate. As such, many segments of the healthcare industry, from manufacturers to hospitals to pharmacies, are looking more closely at how RFID can be implemented and exploited in their specific setting. Although some parties have down-played RFID, saying it is many years away from maturity and truly useful application, the report authors are of the opinion that many of the teething problems experienced by the technology in its infancy are likely to be resolved over the next few years, resulting in a sharp increase in adoption of the platform across the industry. "Declining hardware costs are an important growth driver for the adoption of RFID,"​ the report states. "The cost of RFID infrastructure, i.e. tags and readers, has been decreasing over the last few years and this trend is expected to continue…for example, RFID tag costs declined from $1 in 2000 to less than 20 cents in 2006. Similarly, the cost of RFID readers declined from $1,000 in 2004 to $200 in 2006." ​ As well as decreasing hardware costs, increasing interoperability between RFID products supplied by different companies will drive uptake, eliminating tricky integration problems. Common standards and regulations promoted by bodies such as EPCglobal are likely to help push these integration advances, according to the report. Promotion of RFID by various industry associations and agencies is also likely to have an impact on uptake of RFID solutions across the healthcare sector. The US Food and Drug Administration (FDA), for example, has openly endorsed RFID for several years as an ideal solution to ensure product integrity and public safety. "The FDA also permits manufacturers and other concerned players in the pharmaceutical supply chain to introduce item-level RFID tags for curbing the use of counterfeit drugs as well as other supply chain applications,"​ note the report authors. Although there are alternatives to RFID (bar codes, smart cards or GPS for example), this solution is expected to emerge as one of the most significant, the authors claim. "In the pharmaceutical industry, RFID can lead to several benefits such as elimination of out-of-stock products, better inventory management, secure and efficient data management, and reduction In labour costs,"​ the report states. ​Other advantages can be gained in terms of combating the ever-growing counterfeiting problems experienced by the industry, ensuring regulatory compliance, and managing product recalls. However, there are still some challenges for the technology to overcome before it can be whole-heartedly adopted. Concern for patient privacy is a key obstacle hindering adoption in certain areas of the healthcare industry, and an issue that be will no doubt be hotly debated by interested parties. Other issues that could inhibit the growth of RFID include the technology's limitations under harsh environmental conditions, where increased humidity or contact with metal surfaces can cause the hardware to fail, and the fact that RFID signals cannot pass through liquids and metals, which could limit its application. However, the report authors state that "RFID is considered to be the most efficient identification technology available for the healthcare sector,"​ with the healthcare industry expected to emerge as the fastest growing segment in the worldwide RFID market through to 2008. For more information on the Kalorama report, pleases click here​.

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