Is RFID technology able to mitigate the ever-growing amount of pharmaceutical waste?

The severity of the pharmaceutical waste problem: Is RFID the solution?

One of the biggest problems currently facing hospitals is pharmaceutical waste.

We aren't talking about the process of disposing dangerous medication containers and syringes. We mean throwing out prescription drugs due to expiration dates and unfinished dosages.

As someone who manages pharmaceutical inventory, this isn't exactly news. You're aware that discarding expired medication or partially finished containers is – to a degree – unavoidable. But a recent report highlights just how serious – and how expensive – pharmaceutical waste really is. Fortunately, the evolution of RFID technology, which already exists in many hospitals and healthcare centers for expensive medical equipment, may help curb these costs as the technology migrates into hospital pharmacy.

A costly challenge
The New York Times recently reported on a study conducted by the Memorial Sloan Kettering Cancer Center, which found that the 20 highest selling cancer drugs cost insurers $1.8 billion in pharmaceutical waste every year, while hospital pharmacies and other health care providers spend approximately $1 billion on discarded medication annually.

In total, worldwide the pharma industry invests around $3 billion on prescription cancer drugs that are simply thrown in the trash. These findings were published in BMJ, known previously as the British Medical Journal. Of course, the problem of pharmaceutical waste extends far beyond the cancer drug market. One arthritis drug incurs almost $500 million in unnecessary spending, according to the NYT.

The physical waste of medication
While larger-sized packages from manufacturers contribute to the overall waste of pharmaceuticals, inherent challenges associated with inventory management as well as drug expiration dating is something hospital and pharmaceutical professionals could address with an affordable RFID solution geared towards expensive medications.

Difficulty in the management and tracking of expensive medications in crash carts and lack of visibility into pharmaceutical stock all result in wasted medication. Fortunately, radio-frequency identification technologies have begun to address many of these pain points.  However, obtaining an affordable RFID solution and ensuring specific medications have RFID-enabled labels continues to be a challenge and has not yet become commonplace for the many different medications that would solve a portion of these challenges for hospitals.

The soft costs of waste
In some ways, issues with respect to inventory management are at the core of the pharmaceutical waste problem. But beyond that, hospital pharmacists don't generally have the tools and affordable resources they require to dramatically reduce the amount of effort and revenue they spend on manual inventory management processes, proactively managing expiration dating, and limiting or reducing the cost of waste.

For example, maintaining inventory volume in crash carts is time-consuming and demanding, calling on pharmacy techs and pharmacists to track the medications that have been administered, what medications need to be replaced, and what medications are close to expiring. Manually tracking all of this information uses valuable pharma staff resource and there are few affordable options to automate these processes today.  Additionally, expensive cancer medications are even more difficult to manage and track within the hospital and an RFID solution that is affordable and operationally sound has not yet been brought to market successfully.

RFID: A solution to the waste challenge
The average hospital pharmacy doesn't have the technology in place to capture and consistently manage medication inventory and expiration dating without somehow manually accounting for the location, quantity and expiration dates of their most expensive and mission-critical prescription drugs.

The good news is that RFID technology can help hospital pharmacies reduce the physical waste specifically associated with the management and maintenance of specific products. RFID will also contribute to the ease at which pharmacists are able to track certain products, further mitigating the amount of wasted or missing medications and the time and resources currently manually managing those processes.

In the past, hospitals would only use RFID on high-ticket capital equipment and assets, but it's clear that a similar practice (i.e. labeling medications with RFID) can go a long way toward waste prevention. For one, RFID will drastically cut down on the possibility for theft, as pharmacists are able to physically track the location of the most-valuable and perhaps the most abused prescription drugs.

"One provider has 23% less inventory now than before it implemented RFID."

In the same vein, RFID and other technologies, such as the cloud, can help hospital professionals keep better tabs on what medical supplies are in stock, ensuring that medications and other resources aren't ordered only to sit on shelves. According to Cardinal Health, BJC Healthcare has 23 percent less inventory now than before it implemented RFID and a cloud service (medical devices). It's likely that redundant resources of all types accounted for a majority of that stock reduction. That said, it's easier to track larger supplies without RFID, making it probable that most of that organization's efforts should be focused on better labeling and packaging of prescription drugs.

Lastly, a report published in the American Health Information Management Association's Perspectives explained that RFID use in health care can increase the efficiency of staff members.

The hospital and health care industries aren't ones to shy away from technology that can make dramatic impacts to operations and financials. If hospitals want to reduce pharmaceutical waste, they will have to explore different use cases and technologies for additional RFID applications within the hospital for pharmaceuticals. Health care vendors will need to bring more affordable and easy-to-use hospital RFID options to market for at least expensive pharmaceutical products. While this market isn't as mature as others, there are hospital vendors that can (and will) actively assist hospital pharmacies with implementing the existing RFID software and processes required to make RFID prescription drug management to reduce waste and to improve operational efficiencies a reality.