BATTLING THE BITTER PILLS

Logistics Insight Asia, 1/11/2007

How do you know that pill you are about to swallow is not a fake? Peter Schmalleger of NXP met up with Logistics Insight Asia to discuss how serious the drug counterfeiting problem is and how RFID technology can help make sure you get the real thing.

Peter Schmalleger is Marketing Manager Pharmaceuticals for NXP Semiconductors. The chip manufacturer, which was spun-off from Philips in 2006, has been active in highlighting the issue of drug counterfeiting in the industry and in working with a partners to develop solutions based on RFIDtechnology.

Q: HOW BAD IS THE DRUG COUNTERFEITING PROBLEM?

A: Estimates from the World Health Organization (WHO) are that, globally, 10 percent of medical products are counterfeited. And the problem is getting worse – the economic loss is predicted to be US$75 billion by 2010, which compares to US$10 billion in 2005. And with the potential profits that can be made, it’s not surprising that organized crime is heavily involved in the counterfeiting business.

But more than just the financial implications, counterfeiting really undermines the whole healthcare system and presents a high risk to patients who need to rely in the efficacy of a drug.

There is one reported case in Nigeria where 50,000 people suffered severe health problems and 2,500 died in relation to a fake meningitis vaccine. And there are probably many other instances that are not reported because the connection between the fake medicine and consequent illness is not made.

Q: WHAT ARE SOME OF THE POTENTIAL SOLUTIONS TO THE PROBLEM?

A: Today, the only real technology that can provide a solution is RFID. Because RFID gives you the ability to recognize the unique identity of a product and track it as it moves through the pharmaceutical supply chain. And what we’re talking about here is item-level tagging; pallet or case tagging will not provide sufficient visibility.

Q: SO YOU’RE PROPOSING THAT EVERY BOTTLE OF, SAY, COUGH MEDICINE HAS AN RFID TAGPLACED ON IT?

A: Well, cough medicines are not the highest priority. It’s the high profile prescription drugs that are the most exposed to counterfeiting, like Viagra, for example. In fact, the FDA has issued guidelines on how likely is that a particular drug will be a target for counterfeiting – based on factors like price, global availability, etc – so that the pharma industry can be aware of where their major counterfeit risks are likely to be.

Q: HOW WILL AN ITEM-LEVEL RFID TAG HELP IN THE BATTLE AGAINST COUNTERFEITING?

A: The classical pharmaceutical supply chain comprises drug manufacturer, wholesalers, hospital and retail pharmacies, and then the final consumer. The key goal in all this is that for the consumer at the end of the chain, the item he is given is a genuine one. Often, counterfeited products enter the chain in the middle, at the wholesaler.

So starting with the manufacturer, he puts a unique number RFID tag on every single item. This ID is stored in a database, which can be either the manufacturer’s or EPCglobal. When a shipment case arrives at the wholesaler it goes through a tunnel-type RFID reader, which takes just a couple of seconds to scan the several hundred tagged products in the case. Each ID is then authenticated via the database to check whether these are the same products originally manufactured.

This process is repeated at the repackaging center where cases are broken down and consignments prepared for the local outlets. Then finally at the pharmacy, the drug is scanned by the retail assistant for the final authentication. This last step can be considered a value-add service to the customer, providing assurance that the drug is genuine.

Q: WHY NOT JUST USE A UNIQUE SERIAL NUMBER BARCODEINSTEAD OF AN RFID TAG?

A: The problem with using mass serialization barcoding comes in the middle of the chain, because it is not feasible to open up the case and scan several hundred codes individually. RFID is the only technology that can do track and trace both efficiently and to the required level of security.

Q: WHERE ARE WE NOW IN TERM OF ACTUAL IMPLEMENTATIONS?

A: There are a number of companies engaged in pilot projects. The most prominent one is Pfizer, which is tagging an annual quantity of four to five million bottles of Viagra using HF RFID tags. Another one is Purdue Pharma, which is tagging widely counterfeited painkiller OxyContin using UHF technology.

Feedback from trials is that the technology is working, and the focus is switching to the financials and developing ROI models.

Q: NXP IS AN UPSTREAM CHIP SUPPLIER. WHY GET SO INVOLVED IN PROMOTING THE USE OF RFID IN THE PHARMA SUPPLY CHAIN?

A: As a technology company we have to understand the needs of the end consumer otherwise we do not know what technology we should be developing. Once we understand the value proposition, what we can do is help to align the entire ecosystem; get the channel partners together and say, look, there is a real nice business coming along, we are doing the chip bit, would you be interested in working with is?

We also talk to the drug manufacturers and the distributors, and analyze concerns of the end user such as privacy. And we engage with regulatory bodies like the FDA, and with players from the insurance industry, who are the ones that bear the financial burden when things go wrong. In fact, NXP is one of the few companies in this arena actively assisting the authorities by articulating how RFID can help battle the drug counterfeiting issue.

Peter Schmalleger - NXP

Authenticating the product down the pharma supply chain

SEARCH & DESTROY In the ongoing battle against counterfeit drugs, TAGSYS RFID hardware and labels based on NXP’s ICODE UID-OTP ICs are being implemented to run pharmaceutical tracking programs that provide end-to-end security for high-value prescription drugs in the supply chain. The ICODE UID-OTP features an NXPprogrammed unique identifi er (UID) guaranteeing the RFID tag is unique and has a one-time-programmable (OTP) user memory that locks the user data after programming. It also supports a “destroy” command, allowing the RFID tag to be permanently disabled when the customer picks up their prescription from the pharmacy, to ensure privacy. By tagging a product with a TAGSYS label at the manufacturing plant, the drugs delivered to wholesalers and pharmacies can be authenticated by scanning the RFID tags. Pharmacies then run a query via a secure Internet connection to check tag data. As a fi nal check, the technology detects in real time whether the electronic product code (EPC), in combination with the UID, is valid, which confi rms the drug’s authenticity at pharmacy level. NXP says that ICODE UID-OTP can also help improve the process of developing drugs and running clinical trials. All data can be electronically stored and linked to the label, helping to decrease the amount of paperwork required. one-time-programmable (OTP) user memory