When we last checked in on RFID adoption back in January 2009, evaluations and adoption rates had still been increasing, continuing a 24 month trend of increasing interest in the technology. While adoption rates were still far from widespread, and nowhere near mainstream levels that many had predicted would occur during the early part of this decade, upward trends were still progressing. Approximately 43% of companies were assessing the technology (doubling from just 21% of companies conducting evaluations a year earlier during the beginning of 2008).

Similarly, approximately 20% of companies had actually implemented RFID in some fashion within their organization. Use cases ranged widely from the track & trace of drugs, to things like biospecimen tracking, sample management, and even clinical trial regimen compliance. Companies have sought areas where they can fully control RFID's ROI without 3rd party adoption dependence, such as is the case for traditional drug tracking, since benefits largely depend on the entire "chain" supporting RFID.  Without reliance on partner adoption, companies can independently justify the business case benefits, and get a jump start of developing understanding and best practices around the technology. For example, some pharmaceutical manufacturers who have tested RFID for biospecimen tracking have achieved ROI of over 1000%, though most projects are still on a smaller scale.

After 3 years of steady growth in both adoption and evaluation levels, recent data now suggests that RFID adoption has suddenly gone flat, and evaluation momentum has dropped considerably. Adoption levels have dropped by two percentage points among companies using RFID (18% now using RFID), and evaluations have reduced significantly with just 15% of companies currently evaluating the technology. Our RFID utilization data, collected via our semi-annual industry survey of several hundred industry leaders, is a lagging indicator, so the declines portrayed above likely began during late 2008 and continued through 2009.    The economy, combined with delayed pedigree legislation, were likely responsible for the decline in momentum, and we expect current levels to remain flat until at least early 2011. If the FDA passes a drug pedigree law during 2010, evaluations will increase, but the passing of such a bill is highly unlikely. As such, a long flat period of RFID activity is likely to ensue within the life sciences for the next few years.