Frost: Drug Counterfeiting Boosts Euro Pharma Market RFID Implementation
January 22, 2007 // Published as a news service by IHS
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The use of radio frequency identification (RFID) by Europe's pharmaceutical industry will continue to grow as a result of increasing counterfeit products in the market.
Recent analysis from Frost & Sullivan of the European markets for RFID in pharmaceuticals found earned revenues of $18.0M in 2005, with estimates to reach $464.8M in 2012.
According to analysts, counterfeiting is largely due to deficiencies in the supply chain and the legalized parallel trade in pharmaceuticals between European Union (EU) member nations.
"Globally, about 5% to 8% of prescription drugs are counterfeit, which is a big liability for pharma companies," said Frost & Sullivan research analyst V. Sriram.
"The absence of integration across the supply chain and the inability to track products at every stage has intensified this trend, while creating a real and urgent need for RFID."
Despite the tremendous scope for the use of RFID to track and manage products in the pharmaceutical industry, analysts said the lack of interoperability and harmonization of standards remains a key issue.
EU member nations will have to arrive at a consensus so that even as the initial cost of implementation is minimized, long-term sustainability can be achieved.
"Though 2-D (two-dimensional) data matrix is perceived to be a better choice than RFID, the latter does not require line-of-sight and can scan multiple products at any given point of time, when compared to two dimensional bar codes," said Sriram. "Hence, misconceptions about RFID and interoperability concerns need to be alleviated and uncertainties about the effectiveness of RFID fully addressed."
Analysts said RFID vendors need to keep themselves abreast of the regulatory and technological requirements of various countries and work closely with government agencies to ensure a smooth transition from bar codes to RFID.
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In the short term, companies cannot afford to dispense with bar codes and will need to adopt an informed approach toward implementing RFID.
Source: Frost & Sullivan.