HIV Drug to Carry RF Tags

Acting on the Federal Drug Administration's call to begin using electronic tracking technology to limit drug counterfeiting, GlaxoSmithKline says that it is launching one of the most significant RFID pilot projects to date in the pharmaceutical industry.

In mid-April bottles of the GSK drug Trizivir tagged with RFID chips will begin appearing on pharmacy shelves in the United States. An HIV medicine with $302 million in sales in the U.S. last year, Trizivir is included by the National Association of Boards of Pharmacy on its list of the 32 drugs most susceptible to counterfeiting.

The U.S. pharmaceutical industry loses hundreds of millions of dollars a year in sales because of phony medications, including fake versions of popular drugs like the cholesterol-lowering agent Lipitor, the narcotic painkiller OxyContin, and Viagra.

GSK is the third major U.S. drug maker to say it will equip bottles and cases of selected drugs with electronic tags. Purdue Pharma, maker of OxyContin, is shipping some bottles with the tiny transmitters, as is Pfizer Inc. on some of its Viagra orders.

Rob Coyle, director of GSK's warehousing, distribution, and RFID division, says that the project is designed to protect patients, not lower costs for GSK.

"It's fair to say that GSK is hopeful that supply-chain efficiencies will be gained by using this technology, and we will explore those in the future, says Coyle. "But we're really not looking at other efficiencies at this point, because we're only tagging one SKU [stock-keeping unit] of Trizivir."

Bottles of the HIV medication are equipped with high-frequency RF tags at GSK's plant in Zebulon, N.C., and packed in cases bearing ultra-high frequency tags. The tags are read at GSK's distribution center in Raleigh, N.C. GSK is inviting its wholesalers and retail pharmacy customers to participate in the pilot, which is based on middleware developed by IBM Corp. (NYSE: IBM), by tracking the product as it moves through the supply chain and on to pharmacy shelves.

The tags carry information on the product only, not patient information, says the company.

According to Coyle, the pharmaceutical maker has invested "several million dollars" in RFID technology to date. For the pilot, at its Raleigh distribution center GSK has installed a tunnel reader over its conveyor-belt system that reads the bottle and case tags. The IBM software then collects this data and matches it with the correct orders.

If successful, the pilot will likely lead to the expansion of other drug lines and other regions. Some analysts believe that all pharmaceutical products shipped in the United States will carry RFID tags in the next three to five years.

The push to adopt RFID technology through the pharmaceutical supply chain has fostered a number of cooperative efforts in the highly competitive drug industry. Coyle is co-chair of the Health and Life Sciences Group at EPC Global, an association formed to drive RFID and electronic product codes across a number of industries. While the technology may be sophisticated, the goals are simple, he says.

"The whole industry is enamored of this technology right now," explains Coyle, "but really when it comes down to it the objective is capturing data that will allow you to track products through the supply chain. The technology is just a vehicle."

And, he adds, only industry-wide efforts will make the technology effective.

"The only value we'll get out of this is if it becomes a networking solution. If it's just a one-off, one-company proprietary solution it's not going to work."

— Richard Martin, Senior Editor, Unstrung