RFID Implants and Cancer

In a rush to prove their concepts and make money, companies often overlook information that is bound to return and blacken their eyes. The Associated Press reported this weekend that animal studies from the 1990s raised questions of whether RFID chips, implanted under the skin, could cause cancer:

"The transponders were the cause of the tumors," said Keith Johnson, a retired toxicologic pathologist, explaining in a phone interview the findings of a 1996 study he led at the Dow Chemical Co. in Midland, Mich.

Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.

Share prices in VeriChip, which is in the business of creating microchips for identifying people, fell more than 11 percent yesterday, according to a New York Times article. What is amazing, to me, is the following section:

VeriChip said that it had not been aware of the studies cited in the report, according to the article, but both the company and federal regulators said yesterday that animal data had been considered in the review of the application to implant the chips in humans. They said that there were no controlled scientific studies linking the chips to cancer in dogs or cats and that lab rodents were more prone than humans or other animals to developing tumors from all types of injections.

Let's set aside, for the moment, the question of whether the RFID chips are actually dangerous or not. (I'd think that a cell phone would generate similar radio signals at significantly higher power levels.) Either VeriChip is lying about not having seen these studies, or it was grossly incompetent in not researching thoroughly enough to find them and consider how they might affect the company's strategy. In either case, this is a major business screw-up at the highest levels, and the ones paying for it are currently the investors.

Even if management decides to can a few people for not having turned up the information, did it commission an external review to find every potentially problematic study? If not, why not? If it did, will the company make that report public? The only way out of such problems is to come clean, and quickly. It will be interesting to see how VeriChip's management handles this. So far, it hasn't looked promising.