Trilight Zone

[tricore]

That pharmaceuticals are widely pirated and counterfeited is no surprise to anyone with an e-mail account. Solicitations for obviously faked drugs are one of the most common spam topics.

But the money in the business is big enough that some have tried to subvert the legitimate pharmaceutical supply chain as well. There have been several high-profile counterfeiting cases involving drugs and pharmacy retailers that consumers normally trust.

In some cases, counterfeiting can involve a relatively benign case of substituting a generic for the far more expensive brand name, but some criminals just go all the way and make sugar pills. Clearly this is a problem that has to be stamped out before real damage is done to the industry, to retail, and to customers.

Some low-tech mechanisms for establishing "pedigree" – meaning documentation that the product came from the purported manufacturer – don't provide sufficient assurance. For example, holograms are too easy to copy. This is why the U.S. Food and Drug Administration (FDA) favors electronic pedigree.

Electronic pedigree

Electronic pedigree for pharmaceuticals involves the use of RFID tags with unique codes included, in some tamper-proof manner, in the packaging for the drugs. Most at-risk drugs are packaged in wholesale containers and dispensed as per prescription at the pharmacy, so it's the wholesale containers that need to be protected.

Pharmacies, upon receipt of such packages, can use RFID readers to read the codes and other data in the RFID tag and confirm their authenticity with the manufacturer. This gives a high level of assurance to both parties that the product did indeed originate with the manufacturer.

Electronic pedigree also facilitates investigations by the pharmaceutical industry and the FDA when problems arise, such as the diversion of drugs. In a market with middlemen who complicate the supply chain, they also make it easier for the manufacturers and FDA to issue recalls by specifying the RFID data.

An FDA report from February 2004, entitled "Combating Counterfeit Drugs," recommends that the technology be widespread in the industry by 2007. But that may be an optimistic suggestion. RFID does add some cost and, more significantly, changes to the equation. Manufacturers will have to change their packaging and their business processes. These are steps not to be taken lightly, even when the reasons for the changes are compelling.

Myriad security benefits

And the arguments for electronic pedigree are compelling as well. In terms of security, it beats the alternative proposals, such as more secure packaging and "unit-of-use" packaging, in which products are packaged in units of individual use (this works well for some products, as those who have taken Zithromax know, but not so well for others). Unit-of-use works if the drugs and the packaging of the drugs are counterfeit-resistant.

Electronic form is also a superior way to implement mass-serialization, another FDA recommendation, in which each package gets its own unique code. As compared, for example, to a bar code, RFID can be more resistant to some types of physical damage (and, of course, less resistant to others), and can encode far larger numbering systems than a bar code. Such numbering systems are typically administered by an outside authority that issues number ranges to manufacturers, so that there is no overlap in use.And electronic pedigree adds the potential for supply-chain management improvements, by allowing easy electronic scanning of inventory at all steps in the supply chain.

Cost issues

As with so many things, cost likely will be the driving factor to widespread adoption of RFID for electronic pedigree. Once the prices of tags drop enough, it will be hard to make the arguments for using alternative pedigree methods. When cost gets low enough, it may be feasible to tag every individual blister pack. At that point it will be hard to say whether pedigree advantages or the inventory and supply-chain management advantages are more important.