Experts do not expect the technology to stop there. The adoption by the drug industry, they said in interviews, could be the leading edge of a change that will rid grocery stores of checkout lines, find lost luggage in airports, streamline warehousing and add a weapon in the battle against cargo theft.
"It's basically a bar code that barks," said one expert, Robin Koh, director of applications research at the Auto-ID Labs of the Massachusetts Institute of Technology. The technology, Mr. Koh said, could "make supply chains more efficient and more secure."
Wal-Mart and the Department of Defense have already mandated that their top 100 suppliers put the antennas on delivery pallets beginning in January. Radio tags on vehicles and passports could become a central tool in government efforts to create a database to track visitors to the United States. And companies are rushing to supply scanners, computer chips and other elements of the technology.
The labels are called radio-frequency identification. As in automated highway toll collection systems, they consist of computer chips embedded into stickers that emit numbers when prompted by a nearby radio signal. In a supermarket, they might enable a scanner to read every item in a shopping cart at once and spit out a bill in seconds, though the technology to do that is still some distance off.
For drug makers, radio labels hold the promise of cleaning up the wholesale distribution system, where most counterfeit drugs enter the supply chain, often through unscrupulous employees at the small wholesale companies that have proliferated in some states.
Initially, the expense of the system will be considerable. Each label costs 20 to 50 cents. The readers and scanners cost thousands of dollars. But because the medicines tend to be very expensive and the need to ensure their authenticity is great, officials said, the expense is justified.
Costs are still far too high for individual consumer goods, like the amber bottles that pharmacies use to dispense pills to individuals. But prices are expected to plunge once radio labels become popular, so drug makers represent an important set of early adopters.
Privacy-rights advocates have expressed reservations about radio labels, worrying that employers and others will be able to learn what medications people are carrying in their pockets. Civil-liberties groups have voiced similar concerns about ubiquitous use of the technology in the marketplace. But under the current initiatives, the technology would not be used at the retail level.
The food and drug agency's involvement is crucial because drug manufacturers cannot change a label without the agency's approval. In its announcement, the agency is expected to say that it is setting up a working group to resolve any problems that arise from the use of radio antennas on drug labels.
Counterfeit drugs are still comparatively rare in the United States, but federal officials say the problem is growing. Throughout the 1990's, the F.D.A. pursued about five cases of counterfeit drugs every year. In each of the last several years, the number of cases has averaged about 20, but law-enforcement officials say that figure does not reflect the extent of the problem.
Last year, more than 200,000 bottles of counterfeit Lipitor made their way onto the market. In 2001, a Sunnyvale, Calif., pharmacist discovered that bottles of Neupogen, an expensive growth hormone prescribed for AIDS and cancer patients, were filled only with saltwater.
"We've seen organized crime start to get involved," said William Hubbard, an associate food and drug commissioner. With some drugs costing thousands of dollars per vial, the profit potential is huge, he said.
The weak point, Mr. Hubbard said, is the wholesaler system, which ships more than half of the 14,000 approved prescription drugs in the United States. While three large companies - McKesson, Cardinal and AmerisourceBergen - account for more than 90 percent of drugs that are sent through wholesalers, there are thousands of smaller companies throughout the country, many little more than a room with a refrigerator.
State pharmacy boards are responsible for regulating drug wholesalers, but most boards do almost nothing to police them.
In many states, only a small fee and a registration form are needed to set up shop. A 2003 report by a Florida grand jury found that the state had 1,399 approved wholesalers, one for every three pharmacies in Florida.
Radio labels fight counterfeiting by providing a unique identifier that is almost impossible to copy. When pharmacists receive delivery, they should be able to pass a wand over the bottles and, through an online database, check the history of each.
Any bottles that have been reported missing or previously sold, have an unusual delivery history or are not recognized by the system will be flagged as suspicious.
Makers of prescription narcotics say radio labels could help cut down on the booming trade in stolen pills.
"We get calls once a week from state troopers saying they got a guy with one of our bottles," said Aaron Graham, chief security officer for Purdue Pharma, the maker of OxyContin.
With radio labels, Purdue will be able to trace those bottles to individual pharmacies. "If that pharmacy was robbed, we'll know for certain that that guy is in possession of stolen property," Mr. Graham said.
Radio labels could conceivably help ensure that imported drugs are safe, Mr. Hubbard of the F.D.A. said. But drug manufacturers are unlikely to put radio labels on drugs sold in other parts of the world for many years, he said. The F.D.A. has been a fierce opponent of legalizing drug imports.
"This is about securing the domestic supply," said Tom McGinnis, the F.D.A.'s chief pharmacist.
So far, the agency is relying on a nonprofit industry group, EPCglobal, based in Lawrenceville, N.J., to set standards for radio labels.
The labels will remain voluntary until 2007. After that, the agency may require the labels and specify which types must be used, Mr. Hubbard said.
November 15, 2004
Tiny Antennas to Keep Tabs on U.S. Drugs
By GARDINER HARRIS
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