FDA Counterfeit Drug Report Does Not Signal a Pull Back

Filed in archive Healthcare on June 24, 2006

A few days ago, Gautam Chhabra, my co-editor here at the RFID Weblog, linked to an interesting article about the U.S. Food and Drug Administration's (FDA's) recent action with regard to using RFID in the pharmaceutical industry. The FDA is asking pharmaceutical companies to use RFID to secure the drug supply chains.

This is an important topic, so I would like to add my own analysis.

As background, we start with the realization that counterfeit drugs have become a major problem in the United States and elsewhere around the world. First, you have a public health issue: people can die or suffer when they end up taking inert pills when they think they are getting a legitimate prescribed medication. And in the case of certain drugs, such as Viagra and Oxycontin, there is a thriving black market for such pills by gangs and organized crime. Such popular drugs are also copied and fakes distributed through the Internet, blackmarket channels, and in countries with lax drug enforcement procedures.

Thus, the goal of the FDA (and presumably the pharmaceutical companies, as well) is to ensure that the pharmaceutical supply chain is secure -- all the way from manufacturing plant to the pharmacy. Sometimes this is referred to as establishing a pedigree for pharmaceuticals. That way we know that only legitimate drugs are getting into the public's hands -- and the criminal aspect can be controlled.

The FDA earlier this month issued an update of its 2004 Counterfeit Drug Task Force report. In this latest update they chastised the industry for not moving fast enough to adopt RFID. While the FDA stops short of mandating RFID usage by a particular date, it is clear (a) they want to see more action, and (b) they are backing RFID as the technology to secure the pharma supply chain.

Some have taken the latest updated report as a sign that the FDA is backing off -- that the FDA's commitment to RFID is lessening. I don't think it is.

What has happened is that the FDA (along with most everybody else in the world) now understands RFID better than we did in 2004 -- both its promise and the technical, financial, public policy and logistical challenges associated with implementing RFID across a supply chain.

In other words, everyone now realizes this is more complicated than it seemed back in 2004 when business and government was full of enthusiasm and making predictions about RFID adoption rates. It takes more time to implement RFID across entire supply chains than the over-optimistic early plans realized. The technology issues are more complex and not as simple as anticipated. And the business and public policy issues are more multi-layered and require resolving more considerations than some thought initially.

In other words, everyone is just more knowledgeable -- and realistic -- today.

We've seen something similar play out again and again. The U.S. Department of Defense approached its RFID mandate in 2004 with similar unbridled enthusiasm, which they later scaled back to a phased-in approach when the enormity of their vision became apparent. The vision is still there -- they just scaled it back to make that vision achievable without bringing their suppliers to their knees. The same has happened with private industry mandates, such as the Wal-Mart mandate. Today, the mandates are just being handled more realistically.

Scaling back to phased-in plans is not about backing off the commitment to implement RFID. The revised plans are the result of having a better understanding of what it takes to implement RFID. I see this as a sign of real progress, because today everyone is GETTING REAL about what it takes. One thing is for certain: without those early optimistic reports and mandates, we would not have come as far as we have. We'd be further behind the RFID adoption curve.

For more reading on the FDA's latest updated report on counterfeit drugs, see:

InformationWeek "FDA Scolds Drug Industry for Anemic RFID Adoption."

RFID Journal has an article on the topic.

June 8, 2006 FDA update report on Counterfeit Drug Task Force.

Original FDA Counterfeit Drug Task Force Report, 2004.