Addressing the RFID Security Hole

Preventing loss in the pharmaceutical supply chain

By Dr. Peter Atherton

The counterfeiting of pharmaceuticals is a large and growing problem throughout the world. It is estimated that the pharmaceutical industry loses $32 billion to counterfeiting globally each year (U.S. Chamber of Commerce).

In its report, "Combating Counterfeit Drugs," the FDA stated: "Widespread use of reliable track-and-trace technology is feasible by 2007. If properly implemented, this will help secure the integrity of the supply chain by providing an accurate drug pedigree, documenting the distribution of the drug from the point of manufacture to the final dispenser. RFID is the most promising technology to meet this need."

Recognizing the high risk and potential costs resulting from supply chain tampering, many pharmaceutical companies are turning to RFID technology to protect products throughout the supply chain, providing greater visibility of package location and movement. Alone, however, RFID tags cannot solve the problem; greater security measures must be in place to help prevent loss in the pharmaceutical supply chain.

RFID: a Crucial First Step

RFID tagging has the potential to greatly enhance supply chain efficiency. Eliminating the need for line-of-site access to the tagged items, RFID offers a more efficient means to maintain visibility of inventory through the supply chain, making it possible to track individual items to the final point of sale or use. The technology can improve productivity in shipping and receiving, reduce touch labor, increase shipping and dispensing accuracy, and reduce out-of-stock levels at the retail store.

In addition to anti-counterfeiting, RFID can track lot and expiration dates, improving expiration management. The technology can store pedigree information, satisfying regulatory requirements. By zeroing in on individual items and capturing manufacturing data, such as lot number and location information, RFID can significantly reduce the time spent identifying products targeted for recall as well as reducing the likelihood of a mass market recall of branded products.

Protecting the Protector

It's clear that RFID plays a crucial role in combating counterfeiting and tampering, but it's also essential to ask: What's protecting the RFID tag?

Conventional RFID labels are not physically secure and can easily be moved from one item to another without the tag's RFID function being affected, and therefore without the system being aware of the tampering. This can lead to security compromises and commercial losses through counterfeiting, substitution, theft, and other fraud.

For example, suppose someone removes all the items from a container but leaves the tags in the cartons. Without physical tamper detection, the system will continue to believe that the items are present. Or what if someone opens the tagged items, replaces the contents with counterfeits, and reapplies the tag?

The consequences of inadequate tag security could be devastating. Major pharmaceutical companies make thousands of shipments weekly, many containing valuable and sought-after prescription drugs. While in transit, the RFID tags can be transferred to counterfeit drugs that are injected into the supply chain while the legitimate product is stolen. Because standard RFID tags do not incorporate a physical security measure, there is no way for the RFID tracking system to detect this fraud.

To derive maximum value from an automated system, RFID tags must include a tamper-detection feature that is linked to the RFID function. Otherwise, a system will be monitoring tags only - without any assurance that the tags are still attached to their original items.

Supply Chain Safeguard

Tamper-evident RFID technology, such as Smart&Secure technology offered by MIKOH Corporation (www.mikoh.com), addresses the tag security issue by detecting whether an RFID label has been tampered or moved. MIKOH Corporation is a producer of security and digital marking products, including ensuring the physical security of RFID tags. The physical security of RFID tags is a largely overlooked problem in this emerging industry. For RFID end-users who need to protect materials, documents, and merchandise from security compromises and commercial loss, MIKOH's tamper-evident RFID technology is flexible, scalable, and easily integrates into any RFID ecosystem.

In its simplest form, the technology disables an RFID tag if it is tampered or moved. This prevents use of the tags on counterfeit or substitute products and ensures that a functional tag indicates a genuine product. A more advanced version of the tamper-evident technology allows the tag to be read after tampering but alerts the reading device that the tag has been tampered with - thereby protecting against counterfeiting, product substitution, and fraud.

In Combating Counterfeit Drugs, the FDA said: "It would be beneficial for manufacturers and re-packagers to consider using tamper-evident packaging for prescription product containers, starting with products likely to be counterfeited or newly approved products, where the benefits are equal to or outweigh the costs."

True to the FDA's statement, securing RFID tags with tamper-evident technology may slightly increase the overall price of packaging and shipping. However, the costs of lost product, lawsuits resulting from counterfeit products, and inefficiencies in the supply chain are potentially far higher, making the use of tamper-evident RFID technology a commercial necessity rather than an optional extra.

Dr. Peter Atherton is the Chief Technology Officer of MIKOH Corporation. Dr. Atherton co-founded MIKOH in the early 1990s and has been instrumental in the development of the company's security and authentication technologies. Prior to forming MIKOH, he spent around 10 years in the telecommunications industry in Australia and the UK, developing leading edge technologies for ultra high speed optical fiber systems. Dr. Atherton's academic qualifications include a Ph.D. in Quantum Physics and a Bachelor's degree in Mechanical Engineering. To contact MIKOH, visit www.mikoh.com.