RFID in Healthcare--A Whole Industry of Value
Written By: Lucy West
Published On: October 20 2004
FDA is not only responsible for the protection of citizens and consumers, but
also is an active partner with industries such as food, pharmaceuticals, medical
devices, etc., in pursuit of industry best practices.
billion of imports of pharmaceuticals enter this country every year.
pressure is on from consumers and industry to protect their own interests. These
represent sometimes conflicting goals of protection. Protect the consumer, yet
protect brand integrity and the more political objectives (protect my profit
margins). FDA and its stakeholders and lobbyists, and the ecosystems of industries
around it have been actively pursuing how various information technology initiatives
can enable and mutually support these goals.
18, 2004—the U.S. Food and Drug Administration released its final report today
on ways to reduce the counterfeiting of prescription drugs. The report's recommendations
include the use of RFID technology to create a "pedigree"—a secure record
documenting that the drug was manufactured and distributed under safe and
FDA said: "The adoption and common use of reliable track and trace technology
would help secure the integrity of the drug supply chain by providing an accurate
drug "pedigree" which is a secure record documenting that the drug was manufactured
and distributed under safe and secure conditions." The implication? The industry
needs to track information like drug name, dosage, container number and size,
lot and control numbers, transaction history, etc.
HDMA said: "The Healthcare Distribution Management Association (HDMA) strongly
supports the U.S. Food and Drug Administration's Final Report on combating
counterfeit drugs, particularly the agency's recommendations for technology-based
solutions for the electronic tracking, tracing, and authenticating of pharmaceuticals."
Public Health Security and Bioterrorism Preparedness and Response Act of 2002
(Title III, Subtitle A Protection of Food Supply) requires establishment
and maintenance of records to identify immediate previous sources and immediate
subsequent recipients of food.
whole industry, from manufacturers, distributors, providers, retailers, and
even patients, has a world of value that can be addressed from RFID solutions.
mandates for non-tampering of products.
Brand protection—big pharmaceutical concern about US imports of drugs from
cheaper overseas sources.
Product pedigree tracking—lifetime tracking of product from batch or lot through
final sale, use, and disposal.
Supply chain efficiencies, such as ordering and replenishment, stockroom management,
FIFO use of expiring products, disposal of medical damaged, spoiled, and expired
Medical grade network and healthcare provider effectiveness and costs, which
includes keeping expensive equipment repaired and in use (and locatable!);
doctor productivity (the average doctor touches 600 documents a day!); and
moving paperwork and information through the entire healthcare network to
speed up admin processes.
Worker productivity and efficiencies.
Patient care and protection.
has quadrupled its counterfeiting investigations from 1998 to 2002.
$12 billion annual loss to counterfeit pharmaceuticals.
Pharmaceutical counterfeiting range from 2 to 7 percent rising to 80 percent
in some countries.
Approximately 1,300 recalls were processed in 2001.
Distributors and manufacturers cited out-of-stock for 8 percent that could
not be fulfilled.
Industry-wide returns worth $2 billion occur annually.
Cost of diverted medications: $1 billion annually.
Number of on-line pharmacies registered and verified by the National Board
of Pharmacy's VIPPS program: 1.3 percent.
rapid adoption of RFID technology in the healthcare market is a major strategic
initiative for HDMA and its members", said Lisa Clowers, Vice President of Supply
Chain Processes and Technology at the Healthcare Distribution Management Association
FIGURE 2-HEALTHCARE VALUE CHAIN
about it. The government inspection process' has always been a bit
scandalous, with inspection processes being years behind. But RF-enabled business
processes allow the item count and scope of what can be inspected, understood,
etc., to go exponentially higher, protecting citizens, and yet adding
value to business as well.
RFID Power in the Value Chain
real power of RFID is unleashed in industry-wide implementations. And healthcare
products—FDA-regulated products—are sold through retailers as well, so these
food, pharmaceutical, and device companies have multiple value chains and customers
to serve, and are already getting on the band wagon, from supply chain applications,
to deal with FIFO effectiveness and product pedigree issues. New FDA mandates
will just enhance and escalate the interest and value for this industry.
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