Big Pharma Joins Distributors and Retailers in Fight Against Counterfeit Drugs with $3 Million Pilot Tracking Project

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Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). In a decisive attempt to combat counterfeit drug products, several of the large pharmaceutical companies have begun testing a new tracking technology that employs radio frequency identification technology (RFID). RFID was one of the anti-counterfeit measures suggested to the Food and Drug Administration (FDA) earlier this year, when the agency sought solutions to the increasing problem of counterfeit drugs. The urgency of combating the problem was underscored in 2004 by the discovery of fake versions of the cholesterol drug Lipitor, causing the recall of more than 150,000 bottles.

Placed on medicine bottles, the RFID tags look like ordinary labels, but are really computer chips with antennas wrapped around them. Sensors at distribution centers use radio waves to activate the tags, which are read electronically and stamped with a record of where they have been. It is hoped the RFID labels will catch products that have avoided the usual supply chains, before arriving at the pharmacies. The RFID labeled bottles will be tracked throughout the entire drug distribution channel, from the manufacturing plant to drugstore shelves.

A collaboration between pharmaceutical companies, drug distributors, and retail pharmacies is taking part in the initial $3 million pilot project. Among those companies participating are drug makers, Johnson & Johnson (NYSE:JNJ) (New Brunswick, New Jersey), Barr Pharmaceuticals Incorporated (NYSE:BRL) (Woodcliff Lake, New Jersey), and Merck & Company (NYSE: MRK) (Whitehouse Station, New Jersey); distributors including Cardinal Health Incorporated (NYSE:CAH) (Dublin, Ohio) and retailers, CVS Corporation and Rite Aid Corporation.

In a 2003 report, the FDA said that while drug counterfeiting is known to be widespread outside the country, its prevalence within the U.S. is not known. Other proposals made to the FDA included a classification system to categorize drugs, based on their counterfeiting and patient safety risks, to help federal agencies focus resources on the drugs most vulnerable to counterfeiting. Another suggestion called for stricter licensing requirements for wholesalers and drug re-packagers, with tougher penalties and frequent federal inspections. As reported by Industrialinfo.com in January 2003, the FDA has already begun the process of requiring bar codes on packaging for drugs dispensed in hospitals, ensuring that the right drug gets to the right patient at the right dose.

Despite the obviously beneficial value of the RFID program, there has been some dissention from those who believe the FDA and drug companies have ulterior motives with the entire counterfeiting issue. Skeptics have voiced the belief that the attention being focused on counterfeiting is a direct result of the increasing number of Americans ordering less expensive drugs from Canada and other foreign countries.

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