The electronics industry has been counting on RFID's adoption as the antidote to drug counterfeiting. But legal wrangling and federal foot-dragging, abetted by the powerful pharmaceutical lobby, are raising concerns that the technology's adoption for tracking drugs through the supply chain may no longer be a given.

That possibility looms despite the damage inflicted by counterfeit drugs, whose distribution has reached epidemic proportions. Fake AIDS and malaria drugs kill thousands of people--some put the estimate in the hundreds of thousands--annually across the globe.

Very few of those victims have been in the United States. But there are bogus drugs aplenty here. Knockoffs of Viagra and similar brands--which can be lethal if used in combination with nitrates used to treat angina--are sold unregulated over the Internet. In her book "Dangerous Doses" (Harcourt Inc., 2005), Katherine Eban documents cases of U.S. patients who died after receiving diluted Epogen, used to treat anemia in patients with kidney disease.

And the U.S. Food and Drug Administration's counterfeit-drug task force last year warned that "the U.S. drug supply is increasingly vulnerable to a variety of sophisticated threats."

"The issue is not just about counterfeit drugs; it's also about 'up-labeling' [diluted] drugs and selling them in the gray market," said John Jordan, president of worldwide field operations at Tagsys (Cambridge, Mass.), a manufacturer of RFID systems and tags for end-to-end item tracking.

The problem shouldn't be that hard to fix. A unique number at- tached to each pill bottle could track a drug throughout the supply chain.

Toward that end, the FDA has asked the pharmaceutical industry to develop "pedigree" mechanisms to identify "the chain of custody" as a drug travels from plant to wholesaler to pharmacy.

Creating a paper trail is one approach, but a potentially more effective mechanism would be an "electronic pedigree" (e-pedigree) system based on 2-D bar codes or RFID tags. The FDA has issued no mandates for an electronic system, but it has recommended that stakeholders move to implement RFID.

Boom or bust?
The application could prove a windfall for RFID technology suppliers. NXP Semiconductors was an early believer in the e-pedigree market's potential and has become the de facto RFID chip supplier to the pharmaceutical market, helping steer the course of an interim industry standard by participating in high-visibility trials.

Atmel Corp. is also bullish on the application. This week, it will unveil its CryptoRF product family. By adding more-robust security measures such as mutual authentication capability to its RFID chips, Atmel is hoping for a foothold in the e-pedigree market.

Texas Instruments is active in the sector as well. Besides providing UHF chips for inlay, label and antenna designs, TI has partnered with Certicom to enable authentication and encryption on TI RFID tags via Certicom's elliptic-curve cryptography.

But it's "way too early to pop the champagne," warned Louis Bianchin, senior analyst at market watcher Venture Development Corp. (VDC; Natick Mass.), and he's not alone in his belief that the enthusiasm for RFID-enabled e-pedigrees should be contained for now.

Indeed, some pharmaceutical industry observers now say the emergence of an RFID anticounterfeit market is a myth. Some warn that special interests seeking to erect political obstructions to the e-pedigree could blame the inertia on engineering problems.

E-pedigree is "stuck in the mud" of legal wrestling and federal waffling, said Bianchin. Last December, a group of secondary wholesalers, led by RxUSA Inc., won a temporary injunction preventing the FDA from fully imposing its pedigree rules. The FDA appealed, but the Second Circuit of the U.S. Court of Appeals has yet to schedule a hearing.

Legislators, meanwhile, have been slow to move on the issue. The pedigree requirement was established back in 1987 as part of the Prescription Drug Marketing Act but was stayed repeatedly, supposedly pending the development of practical technological solutions.

The pharmaceutical lobby hasn't seemed anxious to break the stalemate. Describing the RxUSA suit against the FDA as a "monkey wrench" thrown into the nascent market, Bianchin said, "Without the court's decision, and without federal legislation, the pharmaceutical in- dustry has little reason" to move forward with e-pedigree programs.