Tuesday, September 12, 2006

Contrarian Views on RFID

Looks like RFID is a sensitive topic!

I got some strongly worded emails about my post on RFID in supermarket pharmacies, especially my comment that "...we have a long way to go before this technology has any impact on supply chain security." (That quote was also highlighted by FDA News in their Blog Watch.)

For another contrarian viewpoint, read the fascinating article by Industry Week columnist Paul Faber called "RFID Market Continues To Move Sideways". His main points:

  • "The major retail compliance initiatives are moving forward at a steady pace, but well below previous expectations/hype."
  • "The innovations that we see due to RFID technology are still largely due to pursuit of realistic goals in custom projects that address a specific need and provide an unambiguous return on investment."
Faber is especially cynical about IBM's recent announcements regarding RFID in pharma. Recall that IBM's press release got Paul Chang from IBM talking about RFID on CNBC , where he claimed that the pharmaceutical industry "...is rallying around this technology." (Yes, that's an exact quote -- I bought the transcript.)

I find it hard to reconcile Mr. Chang's (self interested) optimism with the comments from outgoing Pfizer CEO Hank McKinnell, who said "RFID is not ready for prime time anywhere." Mr. McKinnell also notes that "It does give you control [up] to the first person you ship to. But if that person subdivides, or the pharmacist subdivides, you've lost control." (The whole interview is worth reading -- see the article in July's Pharmaceutical Executive magazine.)

I'll add that track-and-trace breaks down if the person decides not buy from a legitimate source, which is the topic of my popular post on our demand-side counterfeit drug problem.

The FDA and state legislatures are sincere in their interest to secure the pharmaceutical supply chain with track and trace technologies. But we should not let technology hype overcome the real world of patients and pharmacies. The law of unintended consequences will come back and bite us hard.

Then again, I fly over 100,000 miles per year yet I'm not allowed to bring toothpaste on a plane. I wonder how well things will work if we let a giant government bureaucracy take charge of a pharma supply chain track-and-trace database?

If you are brave, feel free to leave comments, rants, and flames in the comments below. If not, just email me directly.

1 comment:

  1. George LaszloSeptember 22, 2006

    Adam, just wanted you to know that RFID in Pharmaceuticals is covered on a regular basis on my blog, The Laszlo Letter. The most recent post is about two articles on RFID in the September issue of Contract Pharma. Go to www.thelaszloletter.com to see the posts. By the way, I agree with you that there is a disconnect between what the RFID vendors are claiming vs. the industry regarding the RFID adoption rate. My own opinion is that it will take 4-6 years for it to be in widespread use.

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