Notwithstanding the increasing popularity of radio frequency identification (RFID) in pharmaceutical packaging, the pharma industry records a slow pace in adoption of the technology, stuck under various roadblocks, according to a latest study.
According to a survey conducted by a US-based market research firm Health Industry Insights and IDC company, only 16 per cent pharmaceutical companies are currently, evaluating the benefits of RFID technology, and 15 per cent companies adopting RFID in some capacity. The survey was conducted among 143 life sciences industries. The industry leaders are finding roadblock in adopting RFID, due to the technology cost and lack of demonstrated return on investment (ROI). This reason is closely followed by the lack of an item-level frequency standard.
Lack of pressure from Food and Drug Administration, security and privacy concerns, and unreliable read rates (the percentage of RFID tags, or microchips attached to an antenna, that can be accurately read within a certain period of time) are some of the other reasons, which resulted in slower than expected RFID adoption rate. The report indicates average life science company spend on RFID technology is approximately USD 25,000, although this level is expected to shoot up to USD 75,000 over the next 12 months.
Eric Newmark, senior research analyst at Health Industry Insights comments, "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".
The report, which also discusses the read rate results from commercial RFID pilots in the pharmaceutical industry, reveals that initiatives utilizing high-frequency (HF) technology for item-level tagging are achieving better-read rates than those using ultra-high frequency (UHF). According to this, the initiatives using HF are recording read rates in the four to six sigma range, which is a well-know management practice used to help companies achieve exceptional performance levels, and exceeding six sigma, in some cases.
The initiatives using UHF are experiencing read rates between three and four sigma. The survey was conducted in March 2007 among 143 leaders in the life sciences industry to capture quantitative information on the topic of RFID.