FDA Is Taking Baby Steps Toward an RFID Mandate

Yes, the US Food and Drug Administration has issued its long-awaited task force report and has stated: "We continue to believe that RFID is the most promising technology for implementing electronic track and trace in the drug supply chain and that the stakeholders should move quickly to implement this technology." No, it's not a mandate, but it's clearly an "almost." The June 8, 2006 Drug Taskforce Report has the makings of becoming a high-level doctrine toward building a more secure and dependable system for safeguarding the drug supply chain.

Ken Reich

Baby steps. With more than 24 months of in-depth research, the taskforce has been examining RFID technology and the search for the Holy Grail: an e-pedigree solution that will stem the tide of drug counterfeiting, black marketing, gray market diversion, and tampering.

Underscoring the report is FDA's belief that the broad adoption and implementation of electronically driven track, trace, and authentication processes would be a virtual fail safe for a more secure drug supply chain. In fact, all stakeholders in the value chain are urged to work in an expeditious manner toward achieving the e-pedigree.

Furthermore, most stakeholders interviewed for the report agreed it was a necessary step to adopt mass serialization with unique identifiers on each package to facilitate e-pedigree. Further to the issue of mass serialization, it was suggested that the National Drug Code be included in the encryption process. Again, no mandate, but it appears that the agency is referring to RFID as a de facto elixir for safeguarding drugs such as "Viagra," which are viewed as prime targets for counterfeiting, black marketing, and diversion.

Standards and regulations. Correlating with the report, the agency intends to announce in the Federal Register the availability of a Draft Compliance Policy Guide. This document will amplify FDA's enforcement of the proposed e-pedigree regulations and its focus on those products viewed as highly targeted for purposes of counterfeiting and gray diversion. In an effort to provide wholesalers a compliance "looking glass," the policy guide is intended to help these companies focus resources and attention on those types of drugs that are of greatest concern to the agency.

Further, FDA will fully implement regulations related to the Prescription Drug Marketing Act of 1987. This regulatory guideline requires distributors to document by pedigree (albeit not necessarily an e-pedigree) a chain of custody as product moves through distribution channels. The "hold" introduced because of concerns that pedigrees would negatively impact smaller wholesalers expires in December of this year. No further extensions or holds will be issued. The result? Become compliant with new e-pedigree and chain-of-custody guidelines.

Widespread adoption. Speaking for one RFID company providing solutions in trace and authentication for the drug supply chain, we remain optimistic in viewing the future adoption process. We share with FDA its assessment of a sluggish widespread adoption process; a process that has apparently been blunted by a variety of issues. The agency's viewpoint on one challenge that has plagued robust adoption is well stated in their recognizing "progress may have been delayed because standards have not yet been established." They continued, "However, we are encouraged by the progress that the industry has made to adopt universal standards. Based on what we heard, those standards are close to completion." Once completed, it's important to note that the FDA anticipates "a rapid growth in the implementation of RFID in the drug supply chain." Once again, no mandate but certainly a powerful endorsement of the technology.

Some hesitation. Unfortunately, in addition to the standards issue, there are a few other drags in the adoption process that seem to be lingering. These factors include the cost of tags (which is dropping through economies of scale, enhanced manufacturing processes, and expanding capacities), the cost of infrastructure build-out (which may be defrayed by interfacing with and enabling existing database, and Internet protocols taken together with more sophisticated integration as well as new software, middleware, and edgeware developments), ongoing controversy of frequency selection (high frequency versus ultra-high frequency for item-level versus a double-frequency adoption that also will cover cases and pallets). Of course, while there are still opportunities to spin the frequency issue, we will continue to see flourishing debates.

Where frequencies are concerned, the guiding questions are, "What will the pharmaceutical community decree? Will Six Sigma (with 99.9997% efficacy) be an absolute requirement? Will 99.65% or even 94–96% functionality be acceptable?

The fact is that one need only do the math to understand what seemingly innocuous failure rates can really equate to in terms of larger volume. What's the difference between 99.65% and 99.9997%? The facts have been calculated using standard pharmaceutical case and tote quantities (see sidebar "Ultra-high frequency versus high frequency").

Ultra-high frequency (UHF) versus high frequency (HF)

More to come. The FDA task force was "encouraged by the efforts of GSK, Pfizer, and Purdue in tagging their products," as well as the efforts of others in exploring and piloting RFID. Nonetheless, they "are disappointed with the lack of overall progress."

Regardless of the overall marketplace perception that the agency fell short on issuing a "mandate," there is more than good reason to remain sanguine that the next shoe to drop will be a touch louder than a dull thud. The agency's sentiments of "encouragement" and "disappointment" are telling evidence that there's more to come.

Ken Reich is the director of global marketing and public relations at Tagsys, 196 West Ashland St., Doylestown, PA 18901, tel. 267.895.1750, ken.reich@tagsysrfid.com