FDA RULES FOR RFID AIMED AT FAKE DRUGS 2004-11-22 (2)

Michael Garry

WASHINGTON -- The Food and Drug Administration here last week released a Compliance Policy Guide for RFID (radio frequency identification) intended to encourage retailers, wholesalers and manufacturers of pharmaceuticals to become early adopters of RFID technology as a way to prevent the counterfeiting of drug products.

The Compliance Policy Guide, intended for "Radio Frequency Identification Feasibility Studies and Pilot Programs for Drugs," listed the parameters under which RFID pilot studies could be conducted. FDA said it would "exercise enforcement discretion" for any studies that adhered to the guidelines. The guidelines are listed on FDA's Web site, www.fda.gov.

So even if a retailer's RFID pilot didn't follow set FDA rules on labeling, electronic records and other drug-related practices, "we would not initiate enforcement action, so long as the use falls within the policy guide," said Dr. Paul Rudolf, senior advisor of medical and health care policy, FDA. "Our intention is to get folks to use RFID."

Several efforts have already been launched by retailers and manufacturers to use RFID tags on shipments (though not on bottles sold to consumers) to secure the distribution of pharmaceuticals, which have been subjected to increasing amounts of counterfeiting in recent years, according to industry experts. To date, most of the known tests have been conducted by Wal-Mart Stores and drug store retailers like CVS and Walgreen.

For example, the first phase of a major drug store retailer-manufacturer pilot, Jumpstart, was recently concluded under the direction of Accenture's Health and Life Sciences practice, Boston. Its next phase may include food retailers with pharmacy departments. FDA's new policy guide is intended to facilitate more such activity.

"In the past, people were calling us up, and we had to deal with pilots case by case," said Rudolf. "In some instances, pilots were held up because we couldn't respond that quickly." Under the new policy guide, "people don't have to come to us case by case."

The policy guide will expire at the end of 2007, when FDA expects to announce a more formal policy around the use of RFID in pharmaceutical distribution. FDA has also targeted 2007 as the date when RFID would be used widely in the pharmaceutical supply chain.

Even with the relaxed policy about notifying it, FDA would "still want to know if possible what's going on [with pilots]," noted Rudolf. "It's important for us to get data we need to create policy in 2007."

RFID has gained the most attention in the food industry through Wal-Mart's supply chain program in the Dallas area with its top 100 suppliers and about 30 other manufacturers, which have started tagging pallets and cases of CPG items shipped to Wal-Mart. Yet the need to contain the growing drug counterfeiting problem is generating increasing interest in applying RFID to this area.

Wal-Mart has also been testing RFID technology on Class 2 pharmaceuticals at the pack level, at a distribution center and in stores, said Gus Whitcomb, a Wal-Mart spokesman. So far, "the majority of the work with the FDA has been done by our suppliers," he noted.

One retailer that directly responded last week to FDA's announcement was Walgreen, Deerfield, Ill., a participant in Jumpstart. The new policy guide "will allow us to gain more practical experience using these technologies," said Trent Taylor, chief information officer, Walgreen. He said Walgreen hoped the FDA announcement "will encourage more companies to become involved in these efforts so that the technical issues can be resolved even faster."

CVS, Woonsocket, R.I., has been developing an internal "prescription tracking" RFID test aimed at "speeding script deliveries to the customer," said Jack DeAlmo, vice president, store replenishment and inventory management. The test will also focus on managing inventory, returns and expired product.

Speaking on Sept. 29 at the EPCglobal U.S. Conference in Baltimore, DeAlmo said CVS was "waiting for FDA's green light to proceed." Asked last week if FDA's announcement affected the rollout of the project, DeAlmo said he had no comment.

However, Rudolf, who said he was familiar with CVS' RFID project, told SN it was "exactly the type of pilot" FDA hopes the policy guide will allow to go forward without explicit FDA approval.

In its announcement last week, FDA mentioned recent efforts by drug manufacturers to put RFID tags on shipments, including Pfizer, GlaxoSmithKline and Purdue Pharma. For example, Pfizer, New York, said it hopes to be "well along the way" to tagging all shipments of Viagra, the most counterfeited drug in the world, by the end of next year, said Bryant Hoskins, Pfizer spokesman. Pfizer will be seeking support from retailers so "when we introduce the RFID tags, there will be equipment [in distribution centers and stores] to read them," he said.