Radio Frequency Identification (RFID) in Pharmaceuticals - Supply Chain Security Concerns Provide Impetus for RFID Adoption

GBI Research's report on the market for RFID in the pharmaceutical industry provides a comprehensive analysis of the applications of RFID technology in the pharmaceutical supply chain. The market for RFID hardware, software and services is forecast for seven years and the key factors driving or restraining the market are analyzed. The analysis of regulations and mandates provides valuable insights into the key trends that drive the growth of RFID in the pharmaceutical industry.

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Pharmaceutical Industry's Pressing Need to Regain Lost Reputation and Revenues Due to Counterfeit Drugs Will Drive the Growth of the RFID Market

GBI Research finds that there is a growing need for the pharmaceutical industry to secure their distribution channels from counterfeit drugs. RFID solutions provide the ideal identification method by which pharmaceutical industry can counter fake drug issues. While pharmaceutical companies, distributors and wholesalers are on a continuous look out for these fake drugs, counterfeiters find innovative ways to introduce fake drugs into legitimate supply chains. The use of RFID solutions can avoid the loss of investor confidence and a consequent decline in share prices due to such counterfeiting incidents. Also, increased supply chain security and operational efficiency will help the pharmaceutical industry improve their reputation in the delivery of safe drugs. Hence, increasing concerns over the safety of supply chains and the health of patients have forced companies to think big and adopt RFID solutions. A steady increase in the adoption of RFID hardware, software and services in the pharmaceutical industry is expected to drive the growth of these solutions.

Lack of Awareness about the Technology and the Lack of Proof-of-Concept Studies for Return on Investment is Deterring RFID Adoption

GBI Research finds that the pharmaceutical industry is reluctant to adopt RFID systems in their supply chains due to concerns over the high projected costs of implementation. Although concerns over high costs of tags have been alleviated, costs of other hardware and software services are still prohibitive for most pharmaceutical companies. The pharmaceutical industry is also uncertain about technology reliability and data overload, which has delayed implementation. To add to these concerns, there are currently only a few services to accurately estimate the return on investment (ROI) that RFID can offer. The uncertainty about the ROI and the necessity of high cost implementation prevents companies and supply chain participants from adopting RFID solutions. Therefore, lack of a clear business case for RFID implementation proves to be the most important barrier that needs to be overcome to increase adoption rates.

Retailer Mandates Act as the Primary Driver for RFID Technology Adoption in the Pharmaceutical Industry

GBI Research's analysis suggests that retailer mandates that require pharmaceutical companies to tag cases and pallets of drugs with RFID act as the principal driver of technology adoption. The realization of the true benefits of RFID systems requires complete adoption beginning at the manufacturer's site to the point-of-dispense. The mandates of retail pharmacies are doing thisby forcing the pharmaceutical manufacturers to tag their packages with RFID. The initial implementation of RFID tags and readers even at the pallet level will help the industry to gain valuable knowledge and expertise about the real time functioning of RFID-enabled supply chains. The expertise gained will then drive the pharmaceutical manufacturers and trading partners to adopt RFID technology throughout the supply chain.

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