RFID on the rise again in pharma

Radio-frequency identification (RFID) technology, mostly rejected a decade ago for pharma track-and-trace applications, is winning adherents, especially in hospital pharmacy systems. In the 2004-2009 period, the technology was actively pursued both by pharma companies and by wholesale-distributors, who envisioned streamlining the inventory management process in their vast warehouses. But technical difficulties and cost swung the pharma industry globally to deploying 2D barcode for serializing product and tracking it through the supply chain. Passage of the Drug Supply Chain Security Act (DSCSA) in the US in 2013, and the Falsified Medicines Directive (FMD) in the European Union around the same time, more or less locked in the path industry had chosen.

Over the past year, something of a critical mass of RFID providers and their hospital customers has been achieved. An industry consortium, DoseID, has been formed with (as of May) 24 members. One of the founding members, generally regarded as an industry leader, is Kit Check, which says it has some 500 hospital systems as customers, and has delivered over 150 million RFID tags, either to the hospitals themselves or to pharma manufacturers. DoseID is not the only source; at least one company, IntelliGuard, says that it has built up a customer base of 400 hospitals. (Both IntelliGuard and Kit Check generate revenue with the in-hospital stations that read and collect RFID data; the tags themselves come from business partners.)

Mention of DSCSA highlights a key element of this RFID movement: the technology can provide the same (if not better) anticounterfeiting and supply-chain visibility that the 2D barcode scheme offers—including all the data that DSCSA requires. Technically, FDA has mandated use of 2D barcodes plus human-readable product identification on packages—so at best, RFID would duplicate, but not replace, the 2D barcodes.

The Healthcare Distribution Alliance, the trade association of US wholesalers and distributors, is fairly adamant that any combination of DSCSA compliance and RFID adoption is a waste of time. While commenting on last year’s FDA Pilot Program summary, which included a demo from Kit Check, it told FDA that “urging widespread adoption of RFID or mandating its use would be contrary to the DSCSA and its persistent discussion at the public meeting was an unwelcome distraction.”

“I do not see DSCSA transitioning to RFID, except maybe at the shipper [case] level,” says Jeanne Sirovatka, senior director of packaging design and technical projects at Fresenius Kabi, which has recently announced that 20 of its injectable products are going to be RFID-tagged. “At this point, with the investments that the pharma industry has made in 2D barcode, nothing will stop that effort.”

But at least one manufacturer sees a future for RFID. “RFID is a step farther in tracking product than the 2D barcode for DSCSA compliance,” says Lou Kennedy, president of Nephron Pharma. “We consider it the gold standard for traceability, and eventually we will be moving our entire suite of products to it.”

For years, experts involved in DSCSA implementation have been looking for “value beyond compliance” in serialization and tracking; to its proponents, the value of RFID is already there. “DSCSA is a compliance requirement,” says Kevin MacDonald, CEO of Kit Check, “that adds cost to the system rather than taking costs out. Health systems aren’t doing RFID tagging because they have to but because they want to.”

So far, the manufacturer-RFID-tagging trend is of most interest either to producers of generic injectables, or to outsourced compounding pharmacies (503b facilities) And while it seems to be a growing trend, it has a long way to go to approach a significant fraction of the US pharma market. Data from IQVIA’s 2020 Medicine Spending and Affordability report show that, at best, 25% of pharma sales occur in hospitals and clinics. According to industry estimates, some 11% of US hospitals have RFID systems paired with pharmaceuticals currently.

The hospital use case

Health systems have been energetic users of RFID for years: tracking medical devices’ location and identity; connecting patient wristbands with the nurses who treat them, and the procedures being performed; inventory of healthcare supplies. For pharmaceuticals, a key use case is surgical trays equipped with the drugs typically used during certain surgeries. Related cases include “crash carts” that are brought to the patient’s bedside during emergencies, and dedicated cabinets for anesthesia, or for refrigerated products.

According to Kit Check’s MacDonald, the key issue for hospital pharmacies is that drug dosages need to be hand-tagged with RFID labels before they are loaded into trays or carts. There is a substantial labor overhead to doing so; in addition, if the dosages are not tagged, a considerable inventory of expensive drugs could be sitting in the trays, potentially expiring.

(left-right) How labels could look on Kit Check-enabled vials and Fresenius Kabi’s “+RFID” smart-labeled products. Credit: Kit Check; Fresenius Kabi

In practice, Kit Check’s automated cabinets read incoming product data, and the products are tracked into trays or other storage options. Kit Check maintains a cloud-based database, branded as Bluesight, to record all these details. A valuable benefit of the system, says MacDonald, is the ability to derive a “beyond use date” (BUD) for a product that might be withdrawn from a refrigerated cabinet, then returned; as long as the product’s stability budget (time out of refrigeration) has not been exceeded, it can be reused.

The company touts at least one health system client, Reading Hospital in Reading, PA, that used this BUD tracking for Covid-19 vaccine management. The hospital’s pharmacy was nearly overwhelmed with hundreds of dosages being administered daily, while striving not to lose vaccine that had been taken out of its ultracold storage, but not given to a patient.

Yet another important application for Kit Check, IntelliGuard and other players in the RFID/pharma space has been diversion control of controlled substances. Kit Check’s Bluesight for Controlled Substances won an award from the KLAS Research organization for this application in 2021. At IntelliGuard, CEO Gordon Krass says that his company’s tracking technology enables linkages to the pharmacist or nurse dispensing a controlled substance, as well as to the hospital’s electronic health records (EHRs) database, to enable “preventive, not just retrospective” control of dispensing.

Who has the data?

There appears to be an obstacle to widespread use of RFID by manufacturers (let alone contemplating filling in a DSCSA function): who controls the data? As things stand now, any user of Kit Check equipment and services has its data stored in a cloud-based “registry” (as Kit Check calls it). CEO MacDonald says that this centralization provides an important benefit—avoiding the silo effect with automation. “There are so many siloed systems,” notes MacDonald, as one moves from the pharmacy to the operating room to the EHR system. “A key benefit of the DoseID program is that if I have a [DoseID-certified] piece of equipment, I’m not perpetuating these silos.”

The DoseID program, managed by the Auburn University RFID Lab, is intended to provide certification of equipment performance, as well as compatibility across its membership. And while the DoseID website says that this standardization includes the GS1 EPC UHF protocol, it is apparently not limited to that. Kit Check’s MacDonald says that “DoseID is trying to both support GS1 standards and create compatibility that works with modern RFID silicon [i.e., the onboard memory of an RFID tag] and the cloud more broadly.”

For its part, IntelliGuard says that it is the first company to provide GS1 EPC standards in hospital pharmacy applications. When Fresenius Kabi announced its RFID program last year, it specified GS1 compatibility (and is working with a tag supplier, eAgile, that is a business partner of Intelliguard. Neither Intelliguard nor eAgile are currently members of DoseID.) On the other hand, Kit Check issued a press release saying that it has worked out interoperability issues with Fresenius Kabi.

A related issue is management of the database that contains the drug-tracking data. One thing has become clear from the years of wrestling that manufacturers and wholesalers have had with DSCSA, is an unwillingness to put all supply chain data in one database. So far, Kit Check’s MacDonald says the company has had “no pushback” either from hospitals or from manufacturers over how it runs its registry; data can be protected from one user looking into another’s.

At IntelliGuard, Krass says that there is significant potential for manufacturers in the RFID data: “Today, pharma companies rely on distributor reports, but don’t have visibility inside the hospital. They spend millions of dollars with third-party firms to find out what happens with their products. We could eliminate all of that, with data sharing, and blinding patient info. This gives pharma an understanding of how their products are used.”

Nor is the data-sharing problem solely a competitive matter between Intelliguard and Kit Check. When Avery Dennison, a leading tag and label manufacturer, announced a new family of tags earlier this year, they also announced (see https://bit.ly/2T9fJlD) a relationship with a Silicon Valley firm, SUKU, for a blockchain-based data-storage system. Moreover, there exist other system providers (such as AmerisourceBergen, with its Cubixx station) that provide their own data-storage systems. Ultimately, provided that more hospitals get on the RFID bandwagon, and pharma manufacturers follow suit, these issues will be worked out.

About the Author

Nicholas Basta is Editor Emeritus and Founder, Pharmaceutical Commerce