Ziagen

WASHINGTON -- Drug makers can study a promising new technology that makes drugs visible as they travel throughout the pharmaceutical supply chain, without fearing repercussions from the industry's regulating body, the government has ruled.

Last month the U.S. Food and Drug Administration published guidelines to help drug makers study the use of radio frequency identification, which involves putting little tags on bottles of medicine. The goal: to help protect the safety of U.S. consumers by stemming the flow of counterfeit drugs into the system.

The guidelines permit drug products to be tagged down to the item level, with no limit on the number of tags that can be used. How ever, the guidelines do not permit the study of RFID in proteins or biologics. The FDA published the guidelines to encourage drug makers to study the use of RFID for authentication, tracking, tracing, inventory control and other purposes.

The FDA also will assemble a working group to identify regulatory problems surrounding RFID and its applications in the drug industry, and to find straightforward ways to handle them before its widespread use occurs throughout the industry. In return, the agency is expecting manufacturers conducting RFID studies to share their findings.

"The working group is a point of contact for the industry so we can make sure information obtained flows to the FDA and we can develop policy on that, said Paul Rudolf, senior advisor for medical and health policy at the FDA.

The agency hopes the new guidelines will encourage more test piloting of RFID technology. Rudolph said that before the guidelines were published, the FDA received numerous questions from drug makers asking whether putting RFID tags on bottles violated any labeling requirements or good manufacturing practices and whether there were concerns about drug packaging coming into contact with electromagnetic waves sent out by RFID tag readers.

We believe certain pilot studies were inhibited and may have been delayed [because of these issues], said Rudolph, who noted that more pilot studies are needed to help the FDA address regulatory issues in a more definitive way. "It's critical for RFID to be used and for the industry to feel comfortable using it."

In a press conference following the announcement of the guidelines, William Hubbard, associate commissioner for policy and planning for the FDA, said the agency could at some point mandate the use of RFID technology. He cited Florida's pedigree-law, which expands to all drugs and wholesale distributors in July 2006, as one reason.

RFID, Hubbard said, would establish an electronic pedigree, instead of a paper pedigree. "We're saying this new technology can substitute for [a paper pedigree] and can be cheaper and better, he asserted. Hubbard also admonished that from this point on, the drug industry needs "someone to step forward and exert leadership" in the use of RFID.

Wal-Mart in the United States is the first retailer to mandate the use of the technology. In late October, it gave the go-ahead to its suppliers that were ready to get a head start putting RFID into practice. "They're ready. We're ready. There is no need to wait,"' said Carolyn Walton, Wal-Mart's information systems division vice president. "I sometimes get the feeling that people think we are going to flip some gigantic switch on Jail. 1, and tagged cases and pallets will appear from more than 100 suppliers. Instead, as we anticipated, suppliers are coming to us and asking to get into the game before that milestone happens."

Starting next month, Wal-Mart will require its top 100 suppliers to use RFID tags on the case and pallet levels for products headed to its Dallas/Fort Worth-area distribution centers. The company stated that its quest to increase efficiencies is driving its aggressive pursuit of the technology.

Pfizer, plagued with counterfeiting problems rather than efficiency problems, stated that beginning next year, it will tag every bottle of Viagra intended for sale in the United States. Purdue Pharma announced it will tag its painkillers OxyContin and Palladone, and GlaxoSmithKline noted that in the next 12 months to 18 months, it will tag one or more of its drugs Retrovir, Combivir, Epivir, Trizivir and Ziagen.

A collaborative effort called JumpStart also is under way. Theprogram studies the flow of drugs in the real-world setting and is run by a partnership of drug makers-including Pfizer--wholesalers and retail pharmacies like CVS, Rite Aid and Walgreens. JumpStart's working prototypes currently use RFID and electronic product codes to see how drugs move through the supply chain. Experts say, however, that the widespread use of RFID outside of pilot tests/working prototypes is still years away.

"There are many examples of where technology could make improvements, but people are afraid to jump in without a certainty that something will happen or efficiencies will be there," Hubbard said. "Look at the example of high definition television. The industry did not want to invest in it until the [Federal Communications Commission] finally set a standard and pushed it forward. That sort of government leadership can be the catalyst to get people to move ahead."

But current roadblocks to the adoption of RFID include up-front costs combined with the lack of industrywide standards for its use.

Estimates today put RIFD readers at about $1,000, which should drop to about $200 over the next several years. Tags currently cost 30 cents to 50 cents each, but are expected to fall to 10 cents per tag.

Rudolph said that if more drug makers study the use of RFID, that will increase demand for tags and readers and, in turn, will drive down costs.

"The other thing going on now is the setting of standards," Rudolph said. "There has been hesitancy on the part of industry to purchase scanners and tags if there is not a standard out there. It's like the VCR and Betamax. If you invest a lot of money in Betamax and VCR becomes the standard, it's not good for your return on investment."

Some patients will be happy, however, when hospitals do invest in RFID. Last month, the FDA cleared the use of RFID tags in surgery by granting marketing approval for the SurgiChip Tag Surgical Marker. The device includes an RFID tag that notes a patient's name, the anatomical site for surgery, the date of the surgery and the operating physician, thereby minimizing the likelihood of wrong-site, wrong-procedure and wrong-patient surgeries.

But while innovative uses for RFID like SurgiChip illustrate the scope of the technology, some say RFID alone is not the total solution, especially in the creation of a completely visible supply chain.

Todd Skrinar, a partner in the life sciences practice for Unisys, said RFID tags are absolutely necessary, but are not 100 percent sufficient.

"There is a lot of promise in utilizing RFID infrastructure to create a much greater level of visibility and control, but the infrastructure alone doesn't get it done, Skrinar said. "The analysis I like to use is RFID is like water today. There aren't too many sources of water in nature these days where you can go right out to it, put it in a cup, drink it and be comfortable that it's safe.

"With RFID, you can deploy the infrastructure of the tags and readers and do the testing necessary to get read rates where they need to be, but what you still have at that point is massive volumes of raw data, which alone don't do anything for you. You need additional layers to distill it, cleanse it and transform it."

Currently, early adopters that are piloting RFID studies are sorting out those core infrastructure issues. As those lessons are understood and integrated, Skrinar said, more advanced pilots with data sharing and extended inventory visibility will come into play.

Skrinar noted, however, that he sees other key components in creating a safe and secure supply chain in addition to information controls provided by RFID.

"One is the physical dimension--things like packaging-level controls, whether covert or overt," Skrinar said. "For example, holograms are a way to provide a level of unique ID to [product] packaging, and watermarks that are only visible under certain lighting conditions can prove authenticity also at the package level. The other thing is physical security. Can you control the flow of goods so that if you are using RFID, you can ensure tagged products are passing by RFID readers in a controlled and reliable way?"

While RFID's merits, opportunities and limitations are a hot topic in the industry today, an even hotter issue, reimportation, also has been connected to the technology. Some members of Congress in proposed legislation have suggested that RFID would facilitate the safe reimportation of drugs to the United States.

Hubbard said, however, that despite growing efforts in the study of RFID, industry is many years away from a global standard that would make reimportation safe.

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