A Workable Alternative To Rfid?

The pharmaceutical industry has pinned its hopes on RFID technology to win the battle against counterfeiters. Given that the technology has not yet proved the silver bullet many hoped it would be, some brand protection developers are considering simpler, less costly and more effective alternatives.

The entry of counterfeit drugs into the pharmaceutical supply chain has become one of the major concerns in the industry, which has shown its enthusiasm for a practical, cost-effective solution to protect their products and the reputation of its brands.

The problem is growing across all industries, with the German Industry Action Group against Product and Brand Piracy estimating annual worldwide sales losses at Ä200bn to Ä300bn caused by counterfeit goods. Furthermore, production losses, product recalls and recourse claims can cause serious disruptions to production and damage to a company’s image.

‘In the past in Europe and the USA, the pharmaceutical supply chain was very well controlled,’ notes Wilfried Schipper, managing director of Hologram Company RAKO GmbH. ‘Drugs went from producers to wholesalers to pharmacies and then on to doctors and patients. It was a closed loop that worked well for centuries. From the 1990s onwards, cost pressure opened the market, and pharmacies began buying on the grey market or over the internet. The supply chain is open so there are more opportunities for counterfeiters. The industry wants to do something to give patients and pharmacies a way to ensure the products are real.’

Hologram Company specialises in brand protection and product security, with solutions often based on holograms, but encompassing a wider range of technologies. Schipper has seen the pharma industry turn to radio frequency identification (RFID) technology as the solution for the future, but he has his doubts about how effective it will be.

‘Low-cost RFID is not a silver bullet,’ he says. ‘It is more expensive, insecure and, at the moment, it is not working. IT is just like an electronic bar code with a fast read and write capability. A printed bar code can’t be changed, but an electronic bar code can.

It works for big retailers like Walmart, but it is not an item-level solution.’

Practical alternatives

Hologram Company believes that a combination of existing sophisticated technologies can deliver better performance and better value than RFID, and companies such as Daimler-Chrysler in the automotive sector increasingly agree. Schipper now wants to convince more pharma companies that they can act now to limit counterfeiting and protect their brands in a cost-efficient way.

He notes that in the EU there is less call for anti-counterfeiting solutions, and that 2D bar codes are sufficient to meet the needs of that market, though it will be important to incorporate new technologies as they develop. For other markets, where counterfeiting is more likely, he believes a hologram will suffice.

Bar codes or information coded into a hologram, if read by a central database online using the appropriate software, can track products effectively through the supply chain and help detect counterfeiters if the same serial numbers are flagged on the database for two separate products.

‘We are a system provider and we work out a concept for each customer,’ notes Schipper. ‘It can include “covert features” like a hologram, but also covert elements such as marks printed on the instruction leaflet or the package. 2D bar codes and numbers containing logistics information are also incorporated. Holograms are impossible to copy, and if we incorporate a bar code into it then it becomes a machine-readable hologram.’

By combining holograms, 2D bar codes, packaging and blister solutions – all of which are well-established technologies – with their own security measures, Schipper believes that pharma companies can act now to stem the flow of counterfeit drugs. Convincing them, focused as they are on RFID, could be a slow process.

Company profile

Founded in 1994, Hologram Company is one of Europe’s leading brand and product protection enterprises. For more information, visit: www.hologram-company.com.

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