EPC/RFID to eliminate counterfeit menace

Ravi Mathur

The US FDA has recommended RFID as the best way to thwart illegal drug trafficking and several states including Florida and California have passed laws requiring pharmaceutical companies to track drug shipments as they move through the supply chain

Counterfeit drugs are a huge problem not only to our society but also to the pharma industry globally. The annual cost of counterfeiting to the pharmaceutical industry is around US $68 billion. It ranges between 15-30 per cent of all medicines distributed and consumed worldwide.

As a major exporter and manufacturer of pharma drugs and other medical products it majorly affects the brand equity of India in global markets says Ravi Mathur, CEO, EAN India. According to a recent report, around eleven Indian companies have been blacklisted by the Nigerian regulatory authority for the alleged supply of counterfeit drugs. Such incidence give India’s fledgling pharma exports a bad image.

According to Mark B McClellan, commissioner of Food and Drugs at the Food and Drug Administration (FDA) in Washington, DC, there is a ‘‘significant and growing problem of counterfeit drugs.’’ The FDA estimates that up to 40 percent of pharmaceuticals shipped from countries such as Argentina, Colombia and Mexico may be counterfeit. The goal, he says, is to build a ‘‘21st century system that can better protect consumers against this emerging public health threat.’’

The US FDA has recommended Radio Frequency Identification (RFID) as the best way to thwart illegal drug trafficking, and several states, including Florida and California, have passed laws requiring pharmaceutical companies to track drug shipments as they move through the supply chain.

In its report titled ‘‘Combating counterfeit drugs - A report of the Food and Drug Administration’’ dated February 2004, the FDA clearly brings out RFID as the killer solution to combat the counterfeit problem. Report available at: http://www.fda.gov/oc/initiatives/counterfeit/report02—04.html

According to a release by the US FDA, approx. 88 per cent of the drugs coming into USA are unapproved, out of which India accounts for 14.3 per cent, Thailand 13.8 per cent and Phillipines 8.0 per cent.

RFID technology could be introduced to chemists across the UK within the next 12 months, following a successful trial. A three-month pilot study backed by a number of pharmaceutical companies, which ended at the end of January, added RFID tags to 180,000 medicines to improve visibility in the supply chain and to counter the distribution of counterfeit and illegal drugs.

Several manufacturers like Pfizer, GlaxoSmithKline and Purdue Pharma have already announced plans to tag their products. Electronic Product Code (EPC) is innovated out of research undertaken by Auto-ID Center, Massachusetts Institute of Technology (MIT), Boston which was funded and sponsored by US FDA, Baxter, Reckitt Benckiser, Abbott Labs, Pfizer, Johnson & Johnson, etc amongst 100 other leading companies across industry segments.

EPC-based RFID technology uses RFID tags affixed on cases/consignments and a serialised EPC for identification to facilitate detection and subsequent segregation of genuine and counterfeit pharma drugs and medical supplies globally with obvious benefits to all stakeholders — pharma manufacturers, health regulators and the pharma distribution chain covering chemists/druggists, stockists and most importantly, consumers.

Much of the effort centres on ‘‘authentication’’ and ‘‘track and trace’’ technologies. ‘‘The appeal of RFID and EPC technology is the ability to uniquely identify individual products throughout the supply chain and create seamless visibility,’’ says Lisa Clowers, vice-president of Supply Chain Processes & Technology at the Healthcare Distribution Management Association (HDMA), a Reston, Va. non-profit organisation set up in US to secure safe and effective distribution of healthcare products.

In the pharma sector an action group has been formed by EPCglobal Inc called Healthcare Life Sciences Business Action Group (HLS BAG) comprising leading manufacturers such as Abbott Laboratories, Barr Laboratories, Johnson & Johnson, Pfizer, Procter & Gamble; two pharmaceutical wholesalers, Cardinal Health and McKesson; and two retail pharmacies, CVS Pharmacy and RiteAid, Industry trade associations including the Healthcare Distribution Management Association (HDMA) and National Association of Chain Drug Stores (NACDS). Sanofi-Synthelabo, Walgreen and Wyeth have also joined the group recently.

It has been formed to facilitate the adoption and implementation of EPC-based RFID technology in this sector. Participation in this is open to all EPCglobal member companies worldwide.

Essentially, the EPC is a number designed to uniquely identify a specific item in the supply chain. The EPC number sits on a tag comprised of a silicon chip and an antenna, which is attached to an item. Using radio identification technology (RFID), a tag “communicates” its number to a reader. EPC tags would carry 96-bit or 128-bit “license plates” that would identify a manufacturer, describe the product and include a unique serial number.

Legitimate drug manufacturers overseas would tag their products and customs agencies and distribution companies would be able to scan the tags and check a database to verify the origin of the shipment.

RFID tracking in general could help improve the integrity of the supply chain. By clearly identifying and tracking products, cartons and pallets, companies can maintain much tighter control over legitimate shipments and ensure that they aren’t hijacked or stolen.

The EPCglobal Network will make organisations more effective by enabling true visibility of information about items in the supply chain.

EPCglobal India, a division of EAN India, is a regional member organisation of EPCglobal Inc, the not-for-profit organisation set up to establish global standards regarding the development, implementation and adoption of EPC and RFID technology and support of the EPCglobal Network.

According to Mathur, ‘‘Through counterfeit detection and efficient expiration management of pharma drugs and medical supplies, higher quality patient care is possible worldwide as never before through deployment EPC based RFID technology.’’

This technology also has possibilities of being deployed in a big way within India by virtue of its applications in detection of counterfeit merchandise, asset tracking, and traceability across national/global supply chains, product recall, arresting of pilferages/shrinkages, enhanced supply chain efficiencies, wastage control in supply chains etc. Because the capabilities of counterfeiters continue to evolve rapidly, RFID becomes the best medicine against counterfeit drugs.

—Courtesy: EAN India