Pharmaceuticals play a more prominent role in American health care than in any other nation. The North American market today comprises 47% of the global prescription drug market, which now exceeds half a trillion dollars, with Americans spending approximately $251.8 billion annually on pharmaceuticals. This is up significantly from a decade earlier, when American consumption represented approximately one-third of the world market (IMS Health, 2006a). America’s insatiable demand for prescription drugs has led to serious cracks in the drug supply chain of the world’s leading pharmaceutical market. This chapter examines the size and scope of the problem of counterfeit pharmaceuticals, both globally and in the United States. It looks at the impact this crisis is having both on public health and the pharmaceutical industry. Today, leaders in both the pharmaceutical industry and government are looking to more stringent regulations and radio frequency identification (RFID) tagging of pharmaceuticals as a way to head off the problems associated with an increasingly leaky drug supply chain. This chapter outlines the steps being taken in the United States to help secure this vital supply chain. Finally, an analysis is given of the impact the shift to electronic pedigrees of pharmaceuticals will have both on the pharmaceutical and RFID market spaces.
Key Terms in this Chapter
Slap and Ship: A manufacturer placing RFID tags on cases and/or pallets at the last possible point before shipping from a supplier to a mandating retailer or other organization. With a slap and ship strategy, a manufacturer or distributor is simply trying to meet the requirements of another firm’s RFID mandate rather than attempting to capture any data—and value—from the RFID tagging in their own system.
Read Rate: The number of tags that can be read by an RFID reader in a given time period.
Read: The process of retrieving data stored on an RFID tag by sending electromagnetic waves to the tag and converting the radio waves the tag sends back into data.
Semi-Passive Tag (also called battery-assisted tags): This type of tag is similar to an active tag in that there is an onboard battery. The battery is used to run the microchip’s circuitry and to boost the effective read range of the tag. Some semi-passive tags sleep until they are woken up by a signal from the reader, which conserves battery life, while some are programmed to broadcast at set intervals of time.
Electronic Article Surveillance (EAS): Acknowledged by many as the first widespread use of RFID technology widely used today in the retail environment and in libraries, these systems use microwave or inductive technology “readers” to detect the presence or absence of EAS tags as a means of detecting and deterring theft. When an item is purchased (or borrowed from a library), the tag is turned off. However, when someone passes a gate area holding an item with an EAS tag that hasn’t been turned off, an alarm sounds. These tags are inexpensive and do not contain any data.
Sensor: A device that responds to a physical stimulus and produces an electronic signal reporting on that stimulus. Sensors can be tailored to report on a variety of environmental conditions, including temperature, movement, vibration, and shock.
Electronic Product Code: This is a unique number - stored in the chip on an RFID tag -that identifies an item in the supply chain, allowing for tracking of that item. EPC is the generally accepted acronym for “Electronic Product Code.”
Reader (also called an interrogator): A device that communicates with RFID tags. The reader has one or more antennas, which emit radio waves and receive signals back from the tag. Readers may have a digital display to relay information to the operator and may transmit data on to an organization’s computer network infrastructure. Readers can be either fixed or portable, and today, they are beginning to be integrated into other electronic devices such as PDAs (personal digital assistants) and cell phones, and even into objects such as pens.
Harvesting: The way passive tags gather energy from an RFID reader’s antenna to be able to respond to the reader.
Automatic Identification (Auto-ID): This is a broad term, encompassing technologies used to help machines identify objects. A host of technologies fall under the Automatic Identification umbrella, including bar codes, biometrics, smart cards, voice recognition and RFID.
Power Level: The amount of radio frequency (RF) energy radiated from a reader or an active tag. Higher power outputs enable longer read ranges. However, most governments regulate the power levels at which RFID readers can operate in order to avoid interference with other RF devices.
Active Tag: A type of RFID tag that has its own power supply (battery or external power), and, when interrogated by a reader, the tag emits its own signal. Typically, active tags have far greater read distances than passive tags, and they can be combined with sensors to provide information on the environment and condition of the item. They are also more expensive than passive tags and – due to the battery – have a limited life span.
Passive Tag: A type of RFID tag that does not have its own power supply. Instead, the tag draws power from the reader, which sends out electromagnetic waves that induce a current in the tag’s antenna. Without an onboard power source, passive tags have a lesser read range than active tags. However, they cost less than active tags and have an unlimited life span.
Read/Write: The ability of an RFID system to change the data that are stored in a tag. For example, as a product moves from the final packaging area to the warehouse, a read/write tag can be modified to reflect the new location so that now, when interrogated, it passes the new location as part of its updated data stream.
Radio Frequency Identification: An automatic identification technology that uses radio waves to identify objects. RFID is the generally accepted acronym for Radio Frequency Identification.
Smart Label: A generic term that refers to a printed label that typically contains printed information, a bar code identifier, and an RFID tag. The label is considered to be “smart” because of its ability to communicate with an RFID reader.
Frequency: The number of repetitions of a complete wave within one second. 1Hz equals one complete waveform in one second. 1KHz equals 1,000 waves in a second. RFID tags use low, high, ultra-high and microwave frequencies. Each frequency has advantages and disadvantages that make them more suitable for some applications than for others.