The pharmaceutical industry's adoption of radio-frequency identification accelerated last week when the manufacturer of OxyContin began using RFID to track shipments of the theft-prone painkiller, and two other drugmakers outlined their plans to implement the technology. The number of drugmakers experimenting with RFID will likely grow following last week's release of the U.S. Food and Drug Administration's guidelines for RFID pilot programs.

Pharmaceutical companies are counting on the technology to provide track-and-trace protection for drugs and reduce drug counterfeiting and thefts, which cost the industry $30 billion a year.

"The proliferation of counterfeit drugs in the U.S. is on the rise. But RFID technology allows us to create electronic pedigrees and prevent the introduction of counterfeit drugs into the nation's drug supply," says Aaron Graham, VP and chief security officer at Purdue Pharma LP, the maker of OxyContin. "It also provides a mechanism for the industry to work collaboratively with law enforcement to address the problem of pharmacy robberies and burglaries."

Purdue last week began putting RFID tags on 100-tablet bottles of OxyContin, the widely abused pain medication that's a frequent target for theft, to make it easier to track and authenticate the drug. Purdue is shipping the bottles to Wal-Mart Stores Inc. and H.D. Smith Wholesale Drug Co.

The bottles, used by pharmacists to fill prescriptions and not sold to consumers, come in cases of 48. The RFID information is collected from individual bottles; each has a Class 0 tag from Matrics Inc. containing a 96-bit electronic product code number that's a unique license plate for each bottle, says Chuck Nardi, executive director of supply-chain and corporate systems at Purdue. The EPC data read from RFID tags will be integrated into Purdue's enterprise-resource-planning system using SAP's Auto ID infrastructure and supply-chain event-management software.

Pfizer Inc. will begin placing RFID tags on all bottles of Viagra intended for sale in the United States as soon as possible next year. GlaxoSmithKline plc says it will start using RFID in the next 12 to 18 months on at least one of its drugs that's susceptible to counterfeiting.

Purdue is working closely with law-enforcement agencies to use RFID to protect shipments of OxyContin. Purdue will donate 100 handheld RFID readers to federal law-enforcement cargo-theft units, FDA Office of Criminal Investigations field offices, and state and local task forces targeting prescription drug thefts. The readers will be used to identify bottles of OxyContin confiscated during robbery and burglary investigations, Graham says.

But RFID has to be widely adopted all along the distribution chain for such efforts to work, Forrester Research analyst Liz Boehm warns. "If they really want to crack down on counterfeiting, they have to use readers every time the drug changes hands," she says.

The FDA Compliance Policy Guide will make it easier for pharmaceutical companies to start testing RFID, said Dr. Paul Rudolf, senior adviser for medical and health policy at the FDA, during a press conference last week. The guide outlines regulations for conducting RFID trials, and drugmakers won't have to come to the agency for permission to start pilot programs. The FDA also formed an internal working group charged with monitoring RFID adoption within the pharmaceutical industry, identifying regulatory issues and developing processes for handling problems.