One of the US's largest pharmaceutical wholesalers this week announced plans to launch a pilot scheme that uses RFID (radio frequency identification) technology to track drugs through the distribution process.

AmerisourceBergen is creating what it calls a track-and-trace program that uses IBM's WebSphere middleware, software that is embedded on RFID readers and IBM's EPCIS (Electronic Product Code Information System) technology. The system will also use software from VeriSign to authenticate transactions, the company said.

Once the full pilot is in operation, AmerisourceBergen expects the system to help secure its drug supply chain from theft and tampering, said Shay Reid, vice president for integrated solutions.

AmerisourceBergen plans to start using parts of the system early next year at its largest distribution center, which is in Sacramento, Reid said.

A complete history

The track-and-trace system will scan RFID tags used by pharmaceutical manufacturers on cases carrying drugs as they enter the Sacramento warehouse, Reid said. As drug orders leave the warehouse, the readers will record the departure time and destination of each RFID-tagged unit, providing the company with a complete history of tagged drugs that were stored in the warehouse, he added.

"We're hoping to establish an electronic chain of custody for each individual unit of drug that is tagged," Reid said.

AmerisourceBergen plans to have some components of the system working by January, with the reading of RFID tags set to start in March, Reid said.

The pilot program will also include linking AmerisourceBergen's track-and-trace system to those used by five drug manufacturers during the first half of 2007.

Reid declined to name the manufacturers or disclose the cost of the project.

In addition to securing the drugs throughout the supply chain, the track-and-trace system is also expected to provide real-time receiving and shipping information to help AmerisourceBergen and its manufacturing partners better track inventory, he said.

"The benefits will come across the board," he said. "There are benefits in being able to track shipments that we can't currently track."

AmerisourceBergen plans to expand the use of the track-and-trace system to its other distribution centers but has not set a timetable for the expansion, Reid said.

Chris Clauss, IBM's EPCIS solution executive, said that pharmaceutical wholesalers such as AmerisourceBergen have been more aggressive than drug manufacturers when it comes to using RFID technology to secure supply chains.

IBM also works with Cardinal Health, another of the country's largest pharmaceutical distributors, on a similar system, he noted.

"Those wholesalers who don't have to buy the RFID tags actually want it to go faster than those who do have to buy the tags," he said.