The chip, which would last for 16 years, would release levonorgestral daily, a hormone which is used to prevent pregnancy.
However with the new implant, a woman could choose when to deactivate or reactivate the chip using a wireless control.
It is designed to be implanted under the skin of the buttocks, upper arm, or abdomen.
The implant provides a long-term solution to birth control and would mean no more trips to the clinic or a procedure to remove the implant.
Currently the contraceptive implant the NHS provides lasts three years but if a woman wishes to remove it before then, she must attend a clinic.
The creators believe it will be more convenient and if it passes safety tests, it could be on the market as early as 2018. They said it would be “competitively priced”.
Pre-clinical testing of the implant, developed by start-up MicroCHIPS in Massachusetts, will begin next year.
The idea for the chip originated two years ago. During a visit to Massachusetts Institute of Technology’s (MIT) lab, Gates and his colleagues asked Robert Langer, professor at MIT, whether it was possible to create birth control that a woman could turn off and on.
MIT said the implant would have to be encrypted to protect wireless data flow and keep it secure.
The chip’s size is 20mm x 20mm x 7mm and reservoirs of the hormone are stored on a 1.5cm-wide microchip within the device.
The implant’s daily dose works by a small electric charge melting an ultra-thin seal around the hormone. This would then release a 30 microgram dose into the body.
The co-creator of the chip, Dr Robert Farra, said that the control would have to be close enough for skin contact.
“Someone across the room cannot reprogram your implant,” Dr Farra, from MIT, said.
He added: “The ability to turn the device on and off provides a certain convenience factor for those who are planning their family.”
However the chip would not be without its problems according to Simon Karger.
The head of surgical and interventional business at Cambridge Consultants told the BBC implanted technology faced some obvious risks and challenges.
Mr Karger said he could “foresee a future in which a huge range of conditions are treated through smart implanted systems”.
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