Cost issues and a lack of consistent frequency standards are at the heart of the holdup for the pharmaceutical industry’s slow adoption of RFID, according to Health Industry Insights, an IDC company.
The market research firm draws upon 143 life science industry leaders in its latest survey, which covers additional roadblocks (like security and privacy concerns) to implementation. Today, only 16 percent of pharmaceutical companies are even evaluating the benefits of RFID technology, says the survey.
Health Industry Insights Identifies Pharmaceutical Industry’s Top Roadblocks to RFID Adoption
Survey Findings Reveal Cost and Lack of Frequency Standards Cause for Delay
FRAMINGHAM, Mass.–(BUSINESS WIRE)–Today, market research firm Health Industry Insights, an IDC company, announces survey findings that identify the top factors contributing to pharmaceutical industry’s slow adoption of radio frequency identification (RFID). Results from a survey of 143 life sciences industry leaders names technology cost and lack of demonstrated return on investment (ROI) as the number one roadblock contributing to slow RFID adoption, followed closely by the lack of an item-level frequency standard. Other reasons, in order of importance, cited by respondents include security/privacy concerns, lack of pressure from Federal Drug Administration, and unreliable read rates (i.e., the percentage of RFID tags, or microchips attached to an antenna, that can be accurately read within a certain period of time).
“While many pharmaceutical companies are eager to begin their RFID pilot work, we’re seeing a freeze on project funding until an item-level frequency standard is established. Evaluations are being hindered by corporate fear of investing in the wrong infrastructure,” says Eric Newmark, senior research analyst at Health Industry Insights. “It is unfortunate that patient and consumer safety is being delayed due to something this trivial.”
The report goes on to spotlight the slower-than-expected RFID adoption with additional survey findings. Results reveal less than one in five (16%) pharmaceutical companies are currently evaluating the benefits of RFID technology, and even fewer (15%) companies adopting RFID in some capacity. Overall, the report indicates average life science company spend on RFID technology is approximately $25,000, although this level is expected to triple to $75,000 over the next 12 months.
Additionally, the report discusses read rate results from commercial RFID pilots in the pharmaceutical industry. The report reveals that initiatives utilizing high-frequency (HF) technology for item-level tagging are achieving better read rates than those using ultra-high frequency (UHF). Findings show initiatives using HF are experiencing read rates in the Four to Six Sigma (a well-know management practice used to help companies achieve exceptional performance levels) range, and exceeding Six Sigma in some cases, whereas those using UHF are typically between Three and Four Sigma.
Adds Newmark, “Although we’re seeing higher item-level read rates from HF technology, it’s unlikely that we’ll see an industry mandate for an item-level frequency. Manufacturers need to realize there is minimal risk and move forward by choosing whichever frequency they believe will deliver the best results for their situation.”
Newmark’s report, which also delves in to decision criteria surrounding RFID implementation and more, is entitled “Item-Level Tagging: Moving Beyond the Frequency Dilemma” (Doc # HI206122) and available on http://www.healthindustry-insights.com.
This Health Industry Insights’ survey was conducted in March 2007 among 143 leaders in the life sciences industry to capture quantitative information on the topic of RFID. Findings were also complemented in the report by direct interviews used to capture more qualitative industry sentiment.
NOTE TO EDITOR: Any data reported from this survey must be sourced as origination from “Health Industry Insights, an IDC company.”
About Health Industry Insights
Health Industry Insights, an IDC company, provides health and life sciences industry executives, and the suppliers who serve them, with market research and advisory services. The company’s integrated coverage spans the entire health industry value chain and closely follows the payer, provider and life sciences markets with special emphasis on developing and employing strategies that leverage IT investments to maximize organizational performance. Staffed by expert analysts and consultants with extensive industry experience, Health Industry Insights delivers a portfolio of offerings relevant to both IT and business needs. IDC is a subsidiary of IDG, the world’s leading technology media, research and events company. For more information, visit http://www.healthindustry-insights.com.