Pharmaceutical Companies in Europe & US Lose $US 50 to US$100 Million Annually on Counterfeit Drugs According to Capgemini
16 May 2004
Radio Frequency Identification (RFID) Or Electronic Tagging Can Reduce this Considerably
Cork, Ireland: Wednesday May 19, 2004 - A seminar in Cork heard today (Wednesday May 19) that pharmaceutical companies in Europe and the US are losing $US50 to US$100 million annually on counterfeit drugs. Ian Brodie expert in Global Life Sciences, Capgemini says that RFID (Radio Frequency Identification) can significantly reduce this figure as he gives his key-note speech at a pharmaceutical seminar in Cork. RFID is a track and trace technology that can uniquely identify each product electronically but it is one step up from barcoding. It can not only tell the product type but the unique identity of the product (allowing tracking of the date it was produced, supply details, handling etc) - all from a distance.
Ian Brodie, Executive Consultant of Capgemini explains, “The significant advantage of RFID for pharmaceutical companies is that drugs will be distributed under secure conditions so that counterfeit drugs introduced into the supply chain can be quickly detected. This will ultimately lead both to greater safety for patients and to increased sales for pharmaceutical companies. And I think I am under-estimating when I gave the figure above of $US50 to US$100 million lost annually in counterfeit drugs.” The World Health Organisation (WHO) estimates that ten percent of all pharmaceutical products globally are counterfeit.
Ian Brodie adds, “The hype so far in RFID has been in the retail and consumer manufacturing market where significant labour and cost savings can be reaped through the reduction in unpacking of warehouse goods as the pallets are remotely scanned electronically with RFID. Retail companies such as Tesco, Metro and Wal-Mart are pushing all their main suppliers, including over-the-counter pharmaceuticals, to introduce RFID by next year.” But the main benefit of RFID for pharmaceutical companies is not in the reduction of warehouse costs or stock-taking.
The Food & Drug Administration (FDA) is targeting anti-counterfeiting and they want to see RFID as a very high priority for pharmaceutical products by 2007 according to Capgemini. He continues, “By 2005 the FDA are advising that some products be tagged at case/pallet level leading up to 2007 when most products should be tagged. RFID can also lead to significant reductions in theft and a much better visibility of stock.”
By 2007 to 2009 there will be significant improvements with on-shelf availability and stock-taking in retail stores or supermarkets. This technology will eventually be able to inform supermarket staff that an item is running low on the supermarket shelf. Ian Brodie says, “Although the product has run out on the supermarket shelf there will usually be more of the product in the storeroom or warehouse and so this technology will warn staff early on so the items can be replenished quickly. This will be a major boon for retailers and the suppliers of their products.”
RFID will also be very important with the transportation of temperature sensitive drugs in the future. Ian Brodie predicts, “This market currently costs the pharmaceutical companies $US10 to 50 million per year and this will be hugely reduced with RFID. The technology will be able to use a temperature sensor to give an early warning signal that the perishable goods are at the wrong temperature. This technology could also play a role in speeding up clinical trials by avoiding trial delays due to clinical supplies not being available.”
RFID tags cost 25 cents today when purchased in bulk, but in five or ten years time the price is likely to fall to as low as 1 - 2 cents per tag, according to industry forecasts. This will make it practical to tag even relatively low cost items.
Ian Brodie adds, “Germany, through the Metro store chain is already ahead of the rest of Europe in the speed of adopting RFID and in pharmaceuticals the Italians are already looking very seriously at RFID and other track and trace technologies to help implementation of the new Bollini law.”
Capgemini is working primarily with pharmaceutical and bio-tech companies in Ireland in the manufacturing and supply chain sector.
-ENDS-
For further information, please contact:
Jacinta Ryan, Simpson Financial & Technology PR
Tel +353 1 2605300
Note to Editors
About the Capgemini Group
Capgemini, one of the world’s foremost providers of Consulting, Technology and
Outsourcing services, has a unique way of working with its clients, which it calls
the Collaborative Business Experience. Through commitment to mutual success and
the achievement of tangible value, the company helps businesses implement growth
strategies, leverage technology, and thrive through the power of collaboration.
Capgemini employs approximately 55,000 people worldwide (including 2,727 Transiciel
people who joined on December 2003) and reported 2003 global revenues of 5.7 billion
euros.
