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WASHINGTON -- A high-profile group of pharmacy retailers, manufacturers and technology vendors will complete its first real-world test of radio frequency identification technology as a way to clamp down on drug counterfeiting next month, and industry leaders are likely to study the results with keen interest.

Industry partners--and competitors--are collectively studying the value of RFID through a program called Jump Start. In September, the Jump Start partners will begin drawing conclusions about the value of the technology as an anti-counterfeiting tool.

The study is of particular interest to some of Jump Start's supply chain partners, including Johnson & Johnson and Pfizer, both of which have faced head-on counterfeiting problems with J&J/Ortho Biotech Products anemia drug Procrit, and Pfizer's cholesterol fighter Lipitor and erectile dysfunction drug Viagra.

"Anti-counterfeiting in terms of pharmaceuticals got our attention quickly," said panel member Pat Rizzotto, vice president of global consumer initiatives for J&J. Rizzotto noted that Procrit vials equipped with RFID and electronic product code tags will soon be available.

Rizzotto and other Jump Start partners offered details on the anti-counterfeiting pilot during the panel discussion: "RIFD use in pharmaceutical distribution: a collaborative effort between pharmaceutical manufacturers, distributors and retail pharmacies at the TRAX: Pharmaceutical Supply Chain Summit held here in late July.

According to discussion leader Lyle Ginsburg, a technology partner with Accenture, the RFID anti-counterfeiting pilot began by tagging pharmaceutical products at the manufacturer level and tracking them as they moved through the supply chain.

"We're following normal shipping lines and taking real orders as we go," said Ginsburg. "Somewhere along the way we want to test [what happens] if we have a real problem with counterfeit drugs. Rather than waiting for that to happen, we're going to tamper with the drugs ourselves so that we can create a situation we can catch."

When the pilot, under the watchful eye of the U.S. Food and Drug Administration, is complete, Jump Start partners will publish the findings.

Before embarking on any pilot studies, however, the first step was to establish whether there was any value in studying RFID on a broad, collaborative front across competing retailer and supplier lines. The resulting collaboration among industry rivals makes Jump Start a unique experiment in technological innovation.

Jump Start partners include: CVS, Rite Aid, Abbott Labs, Barr Laboratories, Cardinal Health, J&J, Manhattan Associates, Matrics, McKesson, Pfizer, Procter & Gamble and the National Association of Chain Drug Stores.

Common "pain points" Jump Start members identified included product returns, inventory management challenges, out-of-stocks, product lot tracking, recalls and drug counterfeiting.

But beyond solving its "pain points," Jump Start partner CVS sees RFID in the pharmacy setting as a way to enhance customer service and meet high customer expectations.

"Anything we can do within the pharmacy environment to simplify picking up a prescription has got to be to our advantage," said Steve Leng, director of project management for CVS and a member of the TRAX panel discussion.

Leng said that behind the pharmacy counter, retailers are dealing with a limited number of SKUs within a small area of the store served by it's own supply chain. "If we can service that supply chain, we can take those learnings into the rest of the store," he added.

Outside of Jump Start, CVS worked with a technology vendor to look at RFID in the pharmacy setting, down to the single-item level, as a way to provide insight into the scale and range of change required to achieve benefits from the technology. The retailer currently is testing a narrowly focused, customer-centric application involving RFID tags on prescription drug vials. Part of the study includes understanding privacy issues among pharmacy customers.

Among a panel of customers, CVS found that no one had an issue with the use of RFID tags on prescription drug vials. When the same customers were told RFID was used for inventory tracing to provide better customer service, more than 75 percent said it was a "great" idea.

"It's vital to take customers with us as we pilot solutions," said Leng. He also noted that Jump Start is a key element in CVS' overall "approach to adopting RFID technology and that the initiative is helping the retailer understand how it can support new store-level processes, support regulatory change, create technology blueprints to leverage across all supply chain partners and synchronize its key business processes.

Wilson Lester, senior vice president of supply chain for Rite Aid and TRAX discussion panelist, said the Jump Start initiative has aligned Rite Aid with key suppliers to further enhance its business planning and collaboration initiatives. He agreed with Leng that a major driver behind adopting RFID technology is customer satisfaction.

Rite Aid also is looking at RFID to enhance regulatory compliance, operational efficiencies and inventory management. "We have about one trillion dollars of unproductive inventory across all supply chains," Lester noted. "Our business is all about inventory. Anything we can do to enhance it is a driver."

Rite Aid now is focusing on RFID on the pallet and case level. Internally, the retailer has its own initiatives under way to leverage its participation in Jump Start, including powering its receiving doors with the technology, as well as using RFID for minor shelf applications.

"Even though the initiatives are embryonic, we still feel it s critical that our organization across many levels is understanding [RFID,] and ready to work with it, said Lester. "We're also building an internal assimilation team of functional stakeholders."

Lester said Rite Aid is taking advantage of Wal-Mart's mandate that its top 100 suppliers adopt the technology on a case and pallet level by January. "[Some] of those vendors are our vendors, said Lester. "We want to learn what they're doing, how they're doing it and how they're overcoming barriers."

Rite Aid currently is planning two RFID pilots this quarter, as well as establishing internal projects and looking at RFID in cigarette tax stamp tracking.

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