EPC/RFID Seen Helping Pharma Cos. Meet Regulatory, Retailer Requirements

Tests by industry group also show improvements in product security, order accuracy, returns efficiency, Accenture reports

Tests by industry group also show improvements in product security, order accuracy, returns efficiency, Accenture reports

Baltimore, MD — October 6, 2004 — Tests of electronic product code (EPC) and radio frequency identification (RFID) in the pharmaceutical supply chain have revealed that these emerging technologies can help satisfy regulatory and retailer requirements, as well as increase product security and consumer safety, according to a recent from consultancy Accenture.

These tests, which were confined solely within the supply chain and did not involve testing at the consumer level, also showed that EPC/RFID could enhance order accuracy and labor productivity and increase the efficiency and speed of recalls and returns, Accenture reported.

Run by a group of pharmaceutical manufacturers, distributors and retailers, the tests explored the application of EPC and RFID technologies across the pharmaceutical supply chain. The findings were based on shipping, tracking and tracing nearly 13,500 packages of pharmaceuticals over an eight-week period.

Participants in the tests included Abbott Laboratories, Barr Pharmaceuticals, Cardinal Health, CVS Pharmacy, Johnson & Johnson, McKesson, Pfizer, Procter & Gamble and Rite Aid. Accenture served as program manager.

"The pioneering nature of this project and its participants has helped the industry make a huge leap toward realizing the benefits of this technology," said Jamie Hintlian, a partner in Accenture's health and life sciences practice. "By making crucial connections both within organizations and across the industry, we're creating innovative approaches to address key issues such as counterfeiting and supply chain visibility."

The group also worked with the U.S. Food and Drug Administration's Anti-Counterfeiting Task Force on how RFID/EPC technologies can mitigate the risk of counterfeit drugs making it to market.

"Combating counterfeit drugs is a high priority of the FDA," noted Paul Rudolph, an official with the administration. "We're encouraged to see this cross-industry group show such strong commitment to working together to use RFID technology to improve the integrity of the pharmaceutical supply chain."

The Healthcare Distribution Management Association (HDMA) and National Association of Chain Drug Stores (NACDS) participated in the group and provided their members with information and education-related opportunities.

Solution providers Matrics (which has since been acquired by Symbol Technologies), Manhattan Associates and Dell supported the group with technology. Matrics supplied tags, readers and antennas. Manhattan Associates provided its RFID Integration Manager middleware, as well as its EPC Manager, Warehouse Management and Trading Partner Management solutions. These solutions were hosted by Accenture on Dell PowerEdge servers.

Michael Swenson, industry analyst at IDC's Life Science Insights, said that this proof-of-concept study by multiple participants throughout the supply chain was an important step in preparing for future use of RFID technology in the pharmaceutical industry.

"While confirming many of the expectations about increased visibility into the supply chain, the project also highlighted technical and organizational issues that will need to be solved by RFID vendors working closely with the pharmaceutical supply chain partners, regulatory agencies and systems integrators who will design, install and support these complex systems," Swenson said.

A second phase of the project will further explore the business value of RFID within the pharmaceutical supply chain. New companies such as Merck, Novartis, Sanofi-Synthelabo, Walgreen's and Wyeth have joined the group and will participate in the next phase.

For more information on trends relating to RFID, see the following SDCExec.com articles:

For more information on the use of RFID solutions in the supply chain, see "Needle in a Supply Chain Haystack," the Net Best Thing column in the January 2002 issue of iSource Business (now Supply & Demand Chain Executive) magazine.