ID Chip's Controversial Approval

By Julia Scheeres

Story location: http://www.wired.com/news/politics/0,1283,55952,00.html

02:00 AM Oct. 23, 2002 PDT

A surprise decision by the Food and Drug Administration permits the use of implantable ID chips in
humans, despite an FDA investigator's recent public reservations about the devices.

The FDA sent chip manufacturer Applied Digital Solutions a letter stating that the agency would not
regulate the VeriChip if it was used for "security, financial and personal identification or safety
applications," ADS said Tuesday.

But the FDA has not determined whether the controversial chip can be used for medical purposes,
including linking to medical databases, the company added. In the United States, ADS has principally
marketed VeriChip as a life-saving tool, saying, for example, that unconscious patients brought to
emergency rooms could be scanned to determine their medical histories.

Repeated phone calls to the FDA's press office were not returned Tuesday, and ADS refused to
provide the media with a copy of the agency's letter.

The decision comes five months after ADS made international headlines by implanting three members
of a Florida family with the VeriChip, which is slightly larger than a grain of rice and emits a
125-kilohertz radio frequency signal that can be picked up by a scanner up to four feet away.

In an interview earlier this month, FDA investigator Wally Pellerite said he was unaware of any
implantable device that was not regulated by the FDA. Cosmetic implants -- including breast and
penile enhancers -- undergo a rigorous FDA examination to determine their effect on the human body
despite having no medical function.

Although ID chips have been used in animals for years, they may have "inherent risks" when used in
humans, Pellerite said in the interview.

On Tuesday, Pellerite referred questions to the FDA press office.

"At this point, I can't say anything other than to represent what the official agency opinion is in this
matter," he wrote in an e-mail. "Previously I was free to give you both sides of the argument and to
point out the pros and cons to each. I am no longer free to do that."

Applied Digital Solutions has gotten into hot water in the past for issuing conflicting statements to the
media and to the FDA about the VeriChip's intended use. In May, the FDA launched an investigation
into the VeriChip when the company repeatedly referred to the chip as a medical lifesaver in the
media, yet assured officials it was merely an identification device.

Tuesday's press release was also confusing, with ADS repeatedly referring to VeriChip as a medical
device despite the fact that the FDA has not ruled whether the chip may be used for health purposes.

ADS president Scott Silverman did not comment on the release, but said he was pleased with the
FDA's decision.

"We'll now go into high gear with our sales, marketing and distribution plans in the U.S.," he said,
adding that the company would be focusing on the security and ID aspects of the microchip.

Silverman said security applications could include using the chip to control access to sensitive
structures such as nuclear power plants, government buildings or private businesses. An example of
an ID application could include "chipping" an Alzheimer's patient who suffers memory loss and
wanders away from home, he added.

Richard Smith, a privacy expert who follows the VeriChip, suggested the device should have been
subjected to a full FDA review to determine its safety.

"Does ADS have any data for complications of VeriChips being installed in animals?" Smith asked.
"Are there ever infection problems or autoimmune rejections? Since the FDA has chosen to not test
the device, the next best thing is to try to understand if there have been health-related problems in
animals."

Meanwhile, Leslie Jacobs, the matriarch of the Florida family chipped in May, said she hoped the
FDA would approve the VeriChip for medical use. Both her husband and son experience ongoing
health problems.

"People who need this should be able to elect to have it," she said. "The VeriChip could help saves
lives."