Big Blue sees green in e-pedigree solutions market
A year from this coming January, California's e-pedigree requirement kicks in. That law will require pharmaceutical companies to create an electronic certificate of authenticity (or e-pedigree) for every drug distributed within the state, starting in 2009. The law, already postponed once to give industry more time to prepare, is regarded as the toughest track-and-trace initiative in the country.
To date, California is the only state requiring electronic tracking, although more states are expected to follow. Oregon,New York, and Florida are considering e-pedigree legislation, as are several European countries, including Spain and France. Although there is no current U.S. law calling for the electronic tracking of drugs, legislation is under consideration.
With these requirements looming, high-tech companies are jumping into the race to offer e-pedigree solutions. IBM announced last month that it hopes to help pharmaceutical companies comply with e-pedigree standards through a new version of its WebSphere RFID Information Center, a data repository that allows clients to manage and securely share information with trading partners to authenticate pharmaceuticals. Unlike some solutions, IBM says, the new version is able to manage and aggregate product serial numbers to enable processes in manufacturing plants, distribution centers, pharmacies, and hospitals.
AmerisourceBergen, a "big three" pharmaceutical distributor, is already piloting the technology at its DC in Sacramento, Calif. IBM says the system is also being used by another large global pharmaceutical manufacturer.
"Our e-pedigree system will help manufacturers, distributors, and pharmacies meet the regulatory requirements that will take effect in California on Jan. 1, 2009," says Christian C. Clauss, director of sensor information management for the IBM Software Group. "This system has the potential to improve the integrity of the entire drug supply chain by allowing users to quickly authenticate pharmaceutical products through direct data exchange with trading partners."
IBM is not the first to offer such a system, however. Cambridge,Mass.-based SupplyScape claims to have pioneered the world's first electronic pedigree product, and counts market giant Pfizer among its customers. Pfizer uses SupplyScape to secure the distribution for its frequently counterfeited Viagra line. Purdue Pharma and Associated Pharmacies are also using the SupplyScape system.
Although IBM's primary goal is to help pharmaceutical companies combat drug counterfeiting and facilitate product recalls, company executives say the new e-pedigree offering has the potential to make a significant impact in other industries. The technology could be used in the agricultural industry, for example, to track food shipments and help stop the spread of food-borne viruses. In addition, the system might be used to ensure the authenticity of a wide variety of consumer goods shipped from overseas, and could make international shipments easier to trace.
Active RFID systems represented only 12.7 percent of the total RFID market in 2007, but their share of that market is expected to surge over the next 10 years. Driven by demand for real-time location systems, the market for active RFID technology could reach $7 billion within a decade. A new research report by IDTechEx predicts that active technology will account for 26 percent of the total RFID market by 2017. Active RFID tags are powered by a battery or other power source.
The rapid growth of the active RFID sector is being driven primarily by increased demand for systems that track, locate, and monitor assets and people. Hospitals, for example, are using the technology to keep better track of expensive machines that often get misplaced.
Other factors driving growth in this sector include reductions in the cost and size of the tags and systems, and the increasing popularity of various forms of short-range wireless communication, particularly WiFi, UWB, and ZigBee. The use of mobile phones for purchasing items will also drive gains.
About the Author
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
More articles by John R. Johnson
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