Health Industry Insights: Cost, Lack of Standards Delay Pharma RFID Adoption
April 28, 2007 // Published as a news service by IHS
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Technology cost and lack of demonstrated return on investment (ROI) are primary roadblocks contributing to slow radio frequency identification (RFID) adoption by the pharmaceutical industry, according to results from a survey of 143 life sciences industry leaders conducted by Health Industry Insights, an IDC company.
Other reasons, in order of importance, include:
- The lack of an item-level frequency standard.
- Security/privacy concerns.
- Lack of pressure from the Federal Drug Administration (FDA).
- Unreliable read rates (that is, the percentage of RFID tags, or microchips attached to an antenna, that can be accurately read within a certain period of time).
"While many pharmaceutical companies are eager to begin their RFID pilot work, we're seeing a freeze on project funding until an item-level frequency standard is established. Evaluations are being hindered by corporate fear of investing in the wrong infrastructure," said Eric Newmark, senior research analyst at Health Industry Insights.
Survey results show that fewer than one in five (16%) pharmaceutical companies are evaluating the benefits of RFID technology, and only 15% are adopting RFID in some capacity.
Overall, the report indicates that the average life science company spend on RFID technology is approximately $25,000, although this level is expected to triple to $75,000 over the next 12 months.
The report also discusses read rate results from commercial RFID pilots in the pharmaceutical industry. The report shows that initiatives using high-frequency (HF) technology for item-level tagging are achieving better read rates than those using ultra-high frequency (UHF).
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The report, which also discusses decision criteria surrounding RFID implementation, is titled Item-Level Tagging: Moving Beyond the Frequency Dilemma (doc No. HI206122). It is available at http://www.healthindustry-insights.com.
Source: IDC.