|U.S. FDA warns Applied Digital on chip implant
Original Link: http://biz.yahoo.com/rc/021119/health_chip_2.html
Applied Digital Solutions Inc. has improperly marketed its implanted microchip for medical uses, U.S. regulators warned in a letter made public on Tuesday.
The VeriChip is a scannable device, implanted under the skin, that contains a unique verification number. The company has said the chip has a variety of "security, financial, emergency identification and other applications."
The U.S. Food and Drug Administration ruled in October that it would not regulate the VeriChip as a medical device unless it was sold for medical applications, such as providing access to information to assist with diagnosis or treatment.
In the letter dated Nov. 8, the FDA said it "had understood from ADS's repeated assurances" that the company had no immediate intention of marketing the chip for medical uses without first consulting the agency.
"We now see that ADS has resumed its marketing of the VeriChip for precisely these applications," said the FDA letter.
Applied Digital Solutions President Scott Silverman, in a statement, said the company "has advised the FDA it is not marketing the VeriChip as a medical device or for medical applications."
The letter, posted on the FDA Web site on Tuesday, was written by Philip Frappaolo, acting director of the compliance office in the FDA's Center for Devices and Radiological Health.
"ADS's conduct flagrantly disregards FDA's prior comprehensive advice," the letter added.
The FDA ordered the Palm Beach, Florida-based company to correct the marketing violations immediately.
"If ADS continues to market the VeriChip for medical applications, FDA is entitled to initiate enforcement action without further informal notice," the letter said.
Such actions may include seizing the product, preventing the company from further marketing the VeriChip or civil monetary penalties, the letter said.
The company is going to work with the FDA to determine how it may properly market the chip for health-related uses, Applied Digital spokesman Matthew Cossolotto said.
Applied Digital Solutions stock lost 1 cent, or 2.04 percent, to close at 48 cents on the Nasdaq market on Tuesday.