Pfizer Uses RFID to Fight Viagra Counterfeiters
The New Reality for Customer Engagement
No one likes a faker, especially when one's health, money and good time are on the line. That's why Pfizer Inc., manufacturer of Viagra, has begun a pilot RFID tagging program on its popular erectile-dysfunction drug in an effort to prevent counterfeit doses from entering its supply chain in the U.S.
Pharmaceutical counterfeiting is a far more complex endeavor than just swapping in little blue placebos.
Some counterfeiters sell sugar pills as bona fides, but they also hustle drugs containing lower levels of the actual active ingredients, or with different active ingredients altogether. Sometimes legitimate, but expired, drugs are repackaged and sold to unwitting wholesalers.
And thanks to the convoluted supply chains throughout the pharmaceutical industrymedicines can pass through several wholesalers and distributors before making it to their final destination in a hospital or pharmacyit is becoming increasingly difficult for retailers to be sure they have the drugs they think they have.
The World Health Organization estimates that pharmaceutical counterfeiting is a $32 billion-per-year business, and the U.S. Food and Drug Administration claims that fake or substandard medicines account for more than 10 percent of yearly pharmaceutical sales worldwide.
According to Tom Kubic, executive director of the Pharmaceutical Security Institute, Viagra's popularity, price tag and market sizeabout $10 per pill adding up to $1.6 billion in worldwide sales in 2005has aroused the interest of counterfeiters and regulators alike.
While the FDA has not mandated that pharmaceutical manufacturers begin deploying RFID on their products, companies such as Pfizer and Purdue Pharma LLP are taking steps toward better authentication technology in their supply chains in anticipation of stricter rules down the road.
Peggy Staver, director of trade product integrity at Pfizer, says that the FDA's interest in the growing problem of counterfeiting makes the U.S. a good proving ground for adoption of RFID technology.
"While the U.S. supply chain is still relatively safe from counterfeiters [compared to other countries], adopting RFID is most feasible in a highly regulated environment where the exchange of information is married to the secure transfer of the products," Staversays.
So in November 2005, Pfizer began rolling out RFID tagging on all bottlesboth the 100-count and 30-count bottles that are shipped to pharmacies and hospitalsas well as on cases and pallets of Viagra sold in the U.S.
Each RFID tag has a unique Electronic Product Code number written into it, which allows distributors, wholesalers and retailers to verify that the bottle, and the drugs within, were shipped by Pfizer. The EPC reveals no information beyond its authenticity as a Pfizer product; the technology is still young, and very few members of Pfizer's supply chain have the equipment required to scan and read the tags, says Staver.
Programs such as Pfizer's are only the beginning. "This is going to be the year of the pilot," says Eric Newmark, a health industry analyst at IDC, "and pharma is going to surpass other industries with RFID because of the patient-safety issues involved."
The eventual goal is to be able to provide an electronic pedigree on products as they move through the supply chain, so retailers will be able to tell where the drugs have been and how they have been handled. And though Newmark estimates that it will take at least five years before RFID is widely implemented across the industry, the adoption of the technology will allow for greater accountability within the distribution chain, which could have an effect on pricing.
For now, with the Pfizer project in its infancy, it's hard to predict results. Staver says that Pfizer won't have an idea of the effectiveness of this $5 million venture until the second or third quarter this year.
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