RFID forecasts prove too optimistic

Despite expectations 12-months ago of a 3.5-fold increase in life-sciences RFID (radio frequency identification) transponder shipments between 2005 and 2006, no more than around ten medications will be RFID tagged on a large scale during 2006 according to ABI Research, a global a researcher and intelligence services provider.

"Initially, only high-value, frequently-counterfeited or stolen drugs such as Pfizer's Viagra and Perdue Pharma's OxyContin are likely to be tagged," says Sara Shah, ABI's industry analyst for RFID, who puts down cost and "a retreat from the irrational exuberance. of early market hype" as two of the main causative factors in the market slowdown, along with a desire to execute small-scale pilots before committing to full deployments.

Another issue that ABI deems to be holding back the market is safety and anti-counterfeiting legislation, particularly the United States Prescription Drug Marketing Act (PDMA) of 1988. Shah says that the PDMA, with its requirements that biotech and pharmaceutical manufacturers prove the existence of their processes for the prevention of "the diversion of drugs" and the tracing of a shipment's "chain of custody" at all stages from manufacturing to delivery, "caused an uproar because there was no way that companies could achieve that within the specified time."

The PDMA was thus subjected to a temporary "stay" and has not been enforced to date, although this moratorium on enforcement is due to end in January 2007, which is also the US Food and Drug Administration's (FDA) target date for widespread use of drug shipment tracking. However, Shah believes that with many companies planning to use barcodes to satisfy state pedigree laws, the FDA's RFID expectations will not be met.