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Blogs - February 28, 2020

3 pharmaceutical sector challenges RFID and flexible electronics could solve

Gillian Ewers

Pharmaceutical companies are under increasing pressure. There are key challenges to address such as fake goods, grey market diversion and consumer engagement. Following Pharmapack, the leading industry event, Gillian Ewers, VP Marketing at Pragmatic, shares some insights into how exciting developments in RFID and flexible electronics could help in this sector.


1. Counterfeit goods

The worldwide pharmaceutical industry is huge – it is predicted that it will be worth over $1.5 trillion in 2021. But, the value of the counterfeit market is also considerable, estimated at $200 billion, of which online sales account for around $75 billion. The World Health Organisation (WHO) claims that 16% of counterfeits contain the wrong ingredients and another 17% contain the wrong levels of necessary ingredients, so these illegal medications can be harmful or, worse, fatal.

To combat this, regulatory authorities have been putting various measures in place. For example, the European Falsified Medicines Directive (FMD) regulation which requires pharmaceutical companies to include a unique identifier (UID) and an anti-tampering device. These are used by suppliers to verify and authenticate the products prior to distribution, then can be used by retail and consumers to ensure integrity up to the point of consumption or application. Presently companies are using 2D barcodes for the unique identification which requires digital printers. These codes are easy to replicate and difficult to read in large numbers.

2. Grey market diversion

Another challenge is grey market diversion, which is when products are not counterfeit but are sold outside approved supply agreements. This could be goods that are bought in a low-priced region, and then sold in another for a much higher price, or it could be medicines that are OTC (Over the Counter) in one country, but under prescription, or prohibited in another territory. Therefore, grey market diversion is not only a problem for suppliers, but also for consumers. Whilst it is not illegal to buy from grey market sources, there could be significant consequences if, for example, pharmaceutical products come without local language instructions or information.

3. Consumer engagement

In an increasingly competitive market, pharmaceutical brands must stand out from the crowd and build strong long-lasting relationships with consumers. There is also the need to reduce consumer confusion about medication dosage and counter indications – information which is usually written in the smallest font size on that piece of paper you just threw away! 

RFID to the rescue

RFID (Radio Frequency Identification) and flexible electronics offer a great solution to these challenges. A RFID inlay (or tag) can be added under labels or inside packaging, with an integrated circuit (IC) and a unique identifier (UID). With this technology manufacturers and retailers can read many codes in a short period of time, and with the software systems that are used they can quickly identify the supply chain route and if there are any hotspots of replicated codes. Assigning a digital UID enables item-level tracking through the whole lifecycle of a product, and crucially with RFID it is more difficult to counterfeit or tamper with as the inlay and IC are not visible. With smart packaging consumers can also gain personalised product and promotions information, all with a simple tap of a smartphone. 

The smart thing

Until now it has not been economically viable to introduce intelligence and interactivity into high volume low margin pharmaceutical products. Fortunately, Pragmatic’s FlexICs are the ideal solution as these are ultra-low-cost, imperceptible, robust and compatible with existing high throughput label and packaging lines.

So, the time is right for the pharmaceutical sector to do the smart thing to address these challenges.

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