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Though RFID has progressed significantly in recent months at pharmaceutical companies, industry confronts some knotty obstacles. In actuality, it is just starting to figure out RFID's technology and business implications.

Driven in part by the pressing issue of ensuring product integrity and patient safety, many companies have set up test labs to try out RFID. Some are using RFID-ready printers for printing labels and encoding electronic product code (EPC) tags in line, at the case and pallet level. Faced with Wal-Mart’s request for tagging Class 2 narcotics, some companies are tagging bottles with preencoded tags supplied by label converters or tags that they code themselves off line before labels are applied.

This stepped-up activity is occurring, despite uncertainty—uncertainty over appliance and software standards, over RFID-investment payback, and over what solutions downstream partners will employ and their willingness to share data.

"Some organizations are sitting on the fence because they feel that costs, such as tag costs, are still too high, and that standards need to be further along before they commit to buying a product, for fear these devices will become outmoded," says Gene Fedors, director of education programs, RFID Technical Institute (Cambridge, MA).

Companies have taken different approaches in the information they chose to put into tags. No clear paths have been defined for sharing data with partners. While standards are firming up for UHF tags - EPCglobal and ISO standards on UHF 915 MHz tags are merging, says Fedors - there is still a question as to how 13.56 MHz HF tags will be standardized.

"This is a very hot topic now. HF is much better suited for item-level tagging. Tagsys has made a strong case for using different frequencies for different applications, as complimentary parts of an overall solution," Fedors says.

"EPCglobal doesn't acknowledge 13.56 MHz right now. There are discussions as to whether they will take it on as a standard, and how that will play with the ISO standard for 13.56 MHz," he says.

Though case and pallet tagging is well under way, spurred by mandates from major retailers and a 2005 DOD deadline for case and pallet tagging that affects its 40,000 suppliers, item-level tagging remains problematic.

"Nobody is programming on the fly for the item level. Encode times are holding that back," says Matt Ream, senior product manager, RFID systems, Zebra Technologies (Vernon Hills, IL). Ream says companies are queuing up Zebra’s RFID-ready printers to encode master label rolls off line and installing production-line readers for verifying the tags in-line.

Another outstanding issue is where item tags will be placed. Companies are investigating putting tags in caps. The advantages to this approach are that tags would be less vulnerable to tampering, and you are minimizing compromised reads arising from misoriented labels or labels that are touching each other. West Pharmaceutical Services (Lionville, PA) and Tagsys (Doylestown, PA) launched a solution for embedding tags into parenteral vial caps earlier this year.

Tag-embedded caps can also promote faster in-line coding, says Roger Smith, O-I (Owens-Illinois; Toledo, OH) manager of global R&D and innovation for healthcare packaging. "Part of the reason for slower line speeds when you are coding a label is that labels do not enter the write field in an oriented manner. With the tag embedded in the cap, the write antenna can be placed in an optimized position, where it takes up virtually no space and doesn’t slow the line down," he says.

Though industries efforts in RFID have been largely on an experimental scale up to this point, and some companies are holding back, there is no doubt that pharmacy anticipates major benefits from RFID in the not-to-distant future. Pharmaceutical and wholesaler companies have identified eight business drivers for the technology, according to The EPV Value Model for Healthcare, a report by EPCglobal, Stanford University, and Eindhoven University of Technology.

Counterfeiting, product diversion, and vendor-managed inventory are among the drivers that the companies interviewed cited as important. The report concludes that four additional drivers are unique to the healthcare industry: product pedigree, reverse logistics, cold-chain management, and clinical trials.

The report notes that some companies have reacted conservatively, which "may be caused by the current immature EPC/RFID infrastructure and high capital investment requirements."

These are undoubtedly temporary obstacles that drug companies will strive to overcome, since corporate revenues, brand images, and patient health hang in the balance.

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