With headlines like "Look out, your medicine is watching you," and "Big Pharma to begin microchipping drugs," Novartis AG will need to be proactive in addressing public suspicion over its smart pill technology.

Novartis announced last month that it is seeking approval in Europe for the first pill to contain an embedded microchip. Two clinical trials of the chip, called "Raisen," are underway in the UK. The chips turn on when activated by stomach acid, then send information to a skin patch which in turn transmits data to a smart phone or sends data to a doctor via the Internet.

Proteus Biomedical, a privately owned company in Redwood City, California, developed the chip-in-a-pill technology and sold it to Novartis for $24 million. Novartis may be the first to hit the market with a smart pill, but several other labs are working on similar technology.

One big concern with ingesting chips is ensuring that patients' personal medical data is protected as it's being wirelessly transmitted from their bodies. Valid reservation, especially since the most common rationale for smart pill technology seems to be that it will help nag patients into adhering to their prescribed meds. I could be wrong but I wager the public will require a stronger reason to ingest wired pills.