Diluted cancer drugs. Schizophrenia or HIV medication laced with talcum powder, aspirin and salt water. Menstrual cramps pills polluted with lead-based highway paint. These are not the sick scenarios of bad made-for-TV movies. They're real-life incidents that have occurred during the last few years due to the escalation of counterfeit pharmaceuticals. Purdue Pharma L.P. and numerous other drug manufacturers are taking this issue very seriously. They're aggressively attacking the scourge by piloting new radio frequency identification (RFID) tracking systems designed to keep a constant watch over their products as they go to market.
Purdue Pharma (Stamford, CT), the maker of OxyContin and Palladone, among other prescription and non-prescription drugs, last November was one of the first to launch a pilot program to integrate RFID tags at the item-level for two of its largest customers: Wal-Mart and drug wholesaler H.D. Smith. The pilot, which places RFID tags on the labels for 100-tablet bottles of OxyContin, is just the start of Purdue Pharma's major RFID initiative and multi-layered security approach. The drug manufacturer is also pursuing other overt and covert measures to safeguard its products. The goal: To transform the way Purdue Pharma packages and ships medications in order to deter counterfeiting and diversion, and to track the authenticity and safety of its products throughout the entire pharmaceutical supply chain.
"We've seen a greater incidence of counterfeit drugs, and we ... take the threat very seriously," explains Aaron Graham, the company's vice president and chief security officer, who was hired in 2002 to take on counterfeiting and other security issues. "RFID is critical to how we can keep counterfeit drugs out of our nation's supply chain."
Counterfeit prescription drugs have become such a matter of concern that other pharmaceuticals manufacturers are placing a similar bet on RFID. Pfizer Inc. (New York) last November announced plans to use RFID tags to authenticate all Viagra sold in the United States by the end of this year, and will consider the technology for other products moving forward.
GROWING PHENOMENON
The U.S. Food and Drug Administration (FDA) is also concerned about the counterfeiting trend; it released a report last year to promote and assist companies looking to adopt RFID throughout the drug-distribution system. While the FDA maintained drug counterfeiting isn't yet a widespread problem, it acknowledged that the number of FDA investigations surrounding counterfeit cases is on the rise. The FDA now looks into more than 20 cases a year since the year 2000, up from around five annually in the 1990s.
The report, which didn't mandate any deadlines for RFID's use, said the technology showed the most promise as a means for tracking and tracing a drug's "pedigree" -- a record of the drug as it moves through the supply chain showing it was manufactured and distributed under safe and secure conditions. Typically, if a pedigree exists at all in today's world, it's achieved with a paper trail.
Using RFID tags, the FDA report contends, companies could achieve mass serialization, meaning they could assign a unique number (the electronic product code) to each pallet, case and package of drugs and then use that number to record information about all the transactions involving the product. As a result, a drug purchaser could immediately determine critical factors such as a drug's authenticity, where it was intended for sale and whether it was previously dispensed. The FDA sketched out a timeline for RFID implementations, predicting that a variety of companies would conduct feasibility studies in 2004 and 2005, with more widespread adoption and deployment of RFID throughout the pharmaceutical supply chain by 2007.
Purdue Pharma is in the small camp of companies getting an early jump on the FDA's recommendations. The manufacturer initially took an interest in RFID as a result of retail giant Wal-Mart's mandate, issued a few years ago to its major suppliers, to embrace the technology as a means to streamline operations, achieve supply chain efficiencies and lower inventory costs. Specifically, Wal-Mart requested that suppliers of Class Two prescription drugs (addictive painkillers and other prescription narcotics) perform item-level tagging on their products.
Based on that demand, Purdue Pharma got started on its RFID initiative, but it quickly realized there were other benefits beyond appeasing Wal-Mart. "We saw potential for RFID, not only as "slap and ship" or putting tags on bottles to send to Wal-Mart," explains Chuck Nardi, Purdue Pharma's information officer of commercial systems. "We plan to expand RFID on more products going to more customers as the industry grows with it. Then we can collect the data and use it as a new element within different business processes."
Under the Wal-Mart pilot, which kicked off in November 2004, every bottle of OxyContin shipped from Purdue Pharma's Wilson, NC, manufacturing facility is tagged with a RFID chip. That gives Wal-Mart and H.D. Smith a serial number, or license plate as they call it, on individual bottles so they can identify what specific product came to them at what specific time, as opposed to having a less specific batch number on a shipment of goods. With this unique identifier, the partners can tell Purdue Pharma exactly what they received and match it up to what the drug maker sent them.
That kind of insight is a giant improvement in tracking products, according to Nardi. "Previously when we shipped our product out the door, we'd lose visibility to it," he explains. "With this kind of electronic pedigree, as the product moves through the supply chain, we have a great source of information to know that the product ended up with the supplier that it's supposed to, and flowed through the supply chain as it was intended to."
Eventually, as the RFID tracking system is implemented across more suppliers and retailers, the pedigree will take on more importance in stopping counterfeiting. Bruce Roberts, executive vice president and CEO of the National Community Pharmacists Association (NCPA), which represents 24,000 independent pharmacists around the country, applauds Purdue Pharma's and other companies' efforts in RFID. "When you find counterfeit drugs that have ... who knows what in them, it undermines the pharmacy and creates lack of trust -- and that's a problem," he says. "RFID can really help restore trust in the supply chain and ensure that as a drug moves through the supply chain, we know where it is and where it's been. It can help eliminate the incidents of drugs getting into the system from rogue sources."
That's not to say Roberts and others don't have concerns about RFID. Getting many of the smaller players to participate in the programs may be a challenge, especially if they have to shoulder some of the cost of RFID equipment, such as readers or tags, Roberts admits. And there's also the chore of integrating the RFID track-and-trace systems with core business applications like ERP (enterprise resource planning) and other manufacturing software to achieve all the potential benefits.
INTEGRATION IS KEY
That's the direction Purdue Pharma is heading. It tapped SAP AG (Walldorf, Germany) for the RFID-enabled version of SAP's ERP system, which allows information captured in the RFID EPC code to flow through and be fully utilized in the company's core business systems. "A license plate on its own is not all that important unless you can attach it to specific business events and information," Nardi says. "That's when the value becomes tremendous."
The company is also working with its existing vendors on integration between the tracking system and its programmable logic controllers (PLCs) on its production line so it can ensure 100% accuracy on the RFID tags being placed on the bottles. If a bottle's RFID tag cannot be properly read, Purdue Pharma has established a system whereby high pressure air blows the bottle off the production line, Nardi explains. Purdue Pharma is currently using tags and readers from Symbol Technologies Inc.'s (Holtsville, NY) RFID unit, formerly known as Matrics Inc.
Nardi tackled the RFID initiative with the help of Purdue Pharma's current vendors. Along with SAP and its PLC provider, Purdue Pharma worked with its label manufacturer to develop capabilities to put the RFID tags directly on the labels before applying them to the bottles. Says Nardi: "We went to our current vendors instead of introducing new players. We're trying to leverage the competency we have in-house today to do this."
Purdue Pharma is taking a multi-layer approach to protection from counterfeiting. While the RFID project is one of the major efforts underway, the firm is pursuing other safeguarding measures.
The company now employs variable-effect, color-shifting ink in the label for OxyContin, a process that's similar to the technology used to deter counterfeiting of U.S. currency. This new label processing was also among the recommendations of the FDA when it endorsed RFID in the report on drug counterfeiting. The integration between the RFID tracking system and Purdue Pharma's ERP software also aids in security. Theoretically, someone might be able to duplicate the tag, Graham says, but there is no way to replicate all the proprietary information being tracked by the drug pedigree. "They can't knock off the pedigree, so the minute there's two products we know exactly which is ours and how it got there," he explains.
Other efforts to squash drug counterfeiting are underway, and Purdue Pharma is committed to playing a leadership role in supporting industry-wide initiatives. It's part of a group that is developing and funding RxPATROL (Pattern Analysis Tracking Robberies and Other Losses), an information clearinghouse for data related to pharmacy robberies, burglaries and theft. It's also working with the FDA and others on promoting RFID use throughout the pharmaceuticals industry. "We have the first fully-integrated RFID protocol for scheduling two drugs at the item level not because we're the most counterfeited, but because we don't intend to be on the other side of the equation," Graham says. "Our goal is to put the criminal element out of business to increase the safety of the American public."