Legislation Uncertainty Slows Adoption of Pharmaceutical RFID Tracking

ABI: Study of RFID tracking in the pharmaceutical industry, anticipates that no more than about ten medications will be tagged on a large scale during 2006. This contrasts with the optimism of a year ago, when the evidence suggested a nearly 3.5-fold increase in life-sciences RFID transponder shipments between 2005 and 2006. , the slowdown may be attributed to cost, as well as to a retreat from the irrational exuberance of early market hype and a desire to execute small-scale pilots before committing to full deployments. One important inhibitor of this market concerns legislation on hold . The United States Prescription Drug Marketing Act (PDMA) of 1988 requires biotech and pharmaceutical manufacturers to prove they have processes in place to prevent the diversion of drugs. This encompasses the idea of pedigree , or the ability to trace a shipment's chain of custody at all stages from manufacturing to delivery. The PDMA caused an uproar because there was no way that companies could achieve that within the specified time. So the law was subjected to a temporary stay, and has not been enforced to date. Certain states then decided that they would enact their own pedigree laws, due to increased drug counterfeiting. The first was Florida: its pedigree law is scheduled to commence in July 2006. California followed suit; its regulation goes into effect in January 2007. Coincidentally, that is also when the moratorium on enforcement of the PDMA expires, and is the target set by FDA guidelines for widespread use of drug shipment tracking. It is clear that the FDA's RFID expectations will not be met, as many companies plan to use barcodes to satisfy state pedigree laws. There is a potential that the market will slow more if state pedigree laws are pushed back. Initially, only high-value, frequently-counterfeited or stolen drugs such as Pfizer's Viagra and Perdue Pharma's OxyContin are likely to be tagged. Does this worry RFID vendors? Probably not much. Many vendors that serve the pharmaceutical market, notes Shah, also serve the retail market. Only a few companies, such as Raining Data, SupplyScape and Tagsys, have focused pharmaceutical supply chain solutions. The RFID Healthcare and Pharmaceutical Markets

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