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Unraveling RFID for pharma

Frost & Sullivan's RFID expert assesses RFID in the healthcare and pharma markets.

RFID for healthcare markets is forecast by Frost & Sullivan to reach $2.3 billion by 2011.
RFID for healthcare markets is forecast by Frost & Sullivan to reach $2.3 billion by 2011.

Research analyst Priyanka Gouthaman of research firm Frost & Sullivan led a Webinar in late January on Unraveling the Promise of RFID within Healthcare and Pharmaceutical Markets. "The RFID vision for the [healthcare] industry is to track and trace pharma products or medical drugs right at the time of production through distribution as well as to the point of final dispensing," she said. We present highlights from Ms. Gouthaman's presentation:

• Healthcare and pharmaceutical markets hold one of the strongest business cases for RFID.

• Regulatory recommendations and legislation are key factors that are impacting the adoption of the technology now.

• RFID technology is expected to have huge potential in drug tracking applications in reaction to various regulatory developments. Item-level tagging for these products is expected to drive future volumes for the RFID market.

• We expect that RFID will play a complementary role to bar codes rather than replace them in the immediate future.

• The cost of hardware continues to be relatively high for widespread adoption, therefore it is product lines and brands that have the highest margins and also the highest safety and authenticity concerns that are being initially considered for RFID tagging.

• Long-term benefits are expected when companies develop mobility solutions for the supply chain, a hybrid of RFID with other technology, for example global positioning systems (GPS).

• Initial interest levels were triggered primarily because of retail mandates, especially in North American and European markets with RFID tagging requirements among pharmacy chains supported by such retailers.

• Pharma companies can also expect to increasingly adopt the technology especially in view of the large number of product recalls in recent years. This has a direct impact on revenues as well as overall brand image.

• RFID in the healthcare market is driven by possible benefits rather than mere mandates, unlike the retail supply chain. As a result, before deciding on pilot projects, market participants are conducting a more thorough evaluation of their internal processes.

• The Asia Pacific region holds good promise for RFID growth, including anti-counterfeiting of pharma products.

• Companies such as Purdue Pharma, Pfizer, GFK, and Johnson & Johnson have experimented with RFID integration in their supply chain.

• Total demand in the pharma supply chain ranks higher than in other healthcare markets. The reason is that multinational drug manufacturers have been more active in budgets and evaluating the technology. [Editor's note: Drug manufacturers' higher-cost products help justify RFID investment.]

About the expert

Research analyst Priyanka Gouthaman is recognized as an expert in the Automatic Identification (Auto-ID) industry. Her primary expertise is in RFID, with other areas that include Healthcare Systems and Applications, Pharmaceutical Markets, Retail Markets, and Supply Chain Strategies.

Note: Next month's RFID Antenna continues with the revealing question-and-answer portion of this Webinar.

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