The Hindu Business Line : Radio-frequency tags on drugs to check fakes

WHEN global retail giant Wal-Mart insisted on radio frequency identification (RFID) tags on prescription medicines sold from its outlets, Indian drug major Ranbaxy was quick to meet this requirement.

Described as "the next level barcode," RFID technology is becoming globally popular as an effective check against the trade in counterfeit products. However, a large section of domestic drug companies have yet to warm up to this technology due to lack of awareness and the cost involved, observed a pharma industry representative.

RFID uses the Internet as a backbone for information distribution. Products are given a unique, encrypted serial number that cannot be copied, said Mr Ravi Mathur, Chief Executive Officer, with standards organisation EAN India. Barcodes can be duplicated, he added.

Explaining RFID's significance, he said the finger of suspicion in counterfeit trade often points to South-East Asian and Latin American countries. Last month, 11 domestic drug companies had been blacklisted by the Nigerian Government for the alleged supply of counterfeit drugs.

"It is a wake-up call for the Indian drug industry. About 14.3 per cent of unapproved medicines entering the US market come from India. It is in the interest of the Indian company to adopt the new technology, since it helps trace their medicine supplies, and hence check counterfeits. It is also effective in the management of goods close to the expiry date," the EAN official said.

Under the Union Commerce Ministry, EAN India (soon to be re-christened GS1) is a joint industry-Government initiative to bring international best practices into India. It is affiliated to EAN International or GS1, based in Brussels.

Earlier this month, the World Health Organisation (WHO) had sounded an alarm saying that the global counterfeit and substandard drug trade is a $35-billion business, with little risk of prosecution.

In fact, global pharma majors such as Pfizer are already piloting projects using the RFID technology to keep track of their products. Meanwhile, the US Food and Drug Administration has also recommended the use of this technology and by 2007, the drug supply chain in the US would be RFID-compliant.

"The USFDA may consider making this technology mandatory. Their prime concern is only the safety of consumers. Export is the buzzword and Indian drug companies need to act quickly. If this technology becomes mandatory in different markets, they will have no choice. This is not as easy as slap and ship. It takes some time to adopt this technology," he explains.

Price is a deterrent in the domestic market, but it has fallen from a few dollars to about 30 US cents per tag per carton, said Mr Mathur. RFID labs are working on this technology and expect to bring price down to less than one cent by 2008.

When more customers demand it, like Wal-Mart, volumes will increase and prices will crash, he points out.

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