The market for Radio Frequency Identification, or RFID, applications in pharmaceuticals is conservatively estimated to reach US$ 600 million by 2012 with a compound annual growth rate of 60 percent, according to a new market research study.
One quarter of the major pharmaceutical companies are expected to implement large-scale RFID projects to reduce costs, improve inventory control, track clinical trials and manage samples, claim the authors of “RFID in Pharmaceutical Manufacturing,” a study by the market research firm Kalorama Information. Kalorama notes that the total pharmaceutical market is expected to hit US$ 1 trillion by 2020, doubling from 2005 levels. The Food and Drug Administration and state governments are requiring additional product tracking to curb counterfeit drugs and improve patient safety and product integrity. As a result, RFID is positioned to be a top solution to help companies efficiently cope with the changing structure of the industry. “Drugs change hands at various points in the pharmaceutical supply chain – in the packaging operation, at the distributors, retail pharmacies and hospitals,” said Bruce Carlson, publisher of Kalorama Information. “Each transaction carries risk of counterfeiting, dilution or diversion, which lead to fatal ramifications such as improper doses, contamination and incorrect ingredients. RFID is a means of reducing these risks.” Carlson said the adoption of RFID is being driven by two important factors: a huge drop in hardware prices (about 80 percent since 2000) and the promise of major cost-savings. The Kalorama report claims that with the implementation of RFID, large manufacturers could save US$ 17-55 million annually, while large distributors can save about US$ 10 million. The report also states that as much as 40 percent of inventory can be managed more efficiently. According to Kalorama, the data in “RFID in Pharmaceutical Manufacturing” is the result of primary research interviews conducted with industry utives, as well as data gathered through secondary research. The report analyzes the cost of RFID implementation, key market trends and dynamics and customer preferences. Various solutions are provided for the main segments of the healthcare industry: hospitals, nursing homes, pharmaceutical manufacturers, distributors and pharmacies.