"Companies should build their serialization strategy with the idea that they are going to leverage it for all kinds of future-value
propositions, such as supply chain visibility, recall management, expiration-date management, deductions, and chargebacks,"
says Michael Lipton, director of RFID solution management for the life sciences industry at SAP.
Consider a recall. Pharmacies tend to over-return drugs in fear of missing a bad product. And wholesalers often use a recall
to clear themselves of old product, knowing that manufacturers will take what they get and issue credit for it. According
to Lipton, manufacturers have no way of validating product coming back and can't determine the original invoice price they
charged the wholesalers, so they end up giving the current price. "If you can authenticate that the product coming back is
the exact product that you are recalling, and if you can match that product against the exact invoice amount that it was shipped
out under, that's millions of dollars of value for that process alone," Lipton says.
But for track-and-trace systems to work, the whole supply chain has to adopt the same pedigree technology and method of serialization.
"There is a huge need for collaboration across the supply chain for this to be effective," says Peggy Staver, Pfizer's director
of trade product integrity. "Technology alone won't solve this issue. The solution requires legislation, better business practices,
and enforcement to help make sure that our supply chain is as secure as possible."
The High Cost of RFID
The ability to track a drug across a supply chain is appealing, but is RFID really catching on? According to some industry
experts, the technology is being piloted by only a handful of companies, for less than a dozen drugs.
And although RFID chips have dropped in price (the average tag costs 25 cents), the technology is still much more expensive
than basic, linear bar codes or their 2D counterparts.
Besides the actual chips, every link in the supply chain must be outfitted with RFID scanners, a software infrastructure,
and data storage units. This upgrade is a costly proposition for warehouses that are using decades-old legacy systems.
Glossary of terms
"More of our customers have been leaning toward 2D bar codes because of the concern about whether it will be possible to get
RFID to work in terms of scanning a pallet and being able to read everything that is on it," says Edge Dynamics President
and CEO Henry Olson. "They are more comfortable with 2D bar codes, and the cost factor is appealing as well."
Some distributors also noted that their biotech customers are concerned about RFID and whether the radio frequency waves affect
the stability of the product. FDA and manufacturers can't answer that question yet, but to be on the safe side, most manufacturers
are tagging biotech products with 2D bar codes. "We have systems set up so that we can tell if there is any difference if
RFID tags are mixed with products that have foil packaging or liquid content," Reid says. "A lot of the RFID tag manufacturers
will tell you that their tags have less effect with liquid or foils, but we have yet to collect enough data to determine that."
There is also debate on whether ultrahigh frequency (UHF) or high frequency (HF) RFID chips offer better read rates. Most
companies said that they are agnostic between the two at the item level, but are requiring UHF at the case level.
According to some experts, it is difficult to read standard UHF chips when they are near liquid or certain metals. An alternative
is the 13.56-MHz HF tags, which have a higher read rate and more features and functionality but don't have an EPC standard.