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There are a number of factors potential subjects need to consider when deciding whether to participate in a clinical trial, including an often overlooked matter that this month's authors examine: taxes.
Recently, at a sponsor's request, we audited a Phase I unit under consideration for conducting a relatively intensive study that included multiple lung biopsies. Subjects who completed the study could earn up to $5000 in compensation for participating and undergoing the potential clinical risks of the biopsies.
Douglas R. Mackintosh
Five-thousand dollars represents more reimbursement than we are used to seeing for studies we audit. The sizable amount caused us to contemplate a rarely discussed but almost certain to occur phenomenon: Subjects participating in this study probably would not realize the full $5000.
Study subjects won't realize the full amount because they will receive an Internal Revenue Service Form 1099 from the Phase I unit, and they will have to pay taxes on the dollar amount indicated on the 1099 when it is added to other income they earned during the calendar year. Depending on a number of personal income and expense factors, the $5000 might shrink to $4000 or less.
Vernette J. Molloy
When a potential subject is considering the value of the $5000 versus the risks of the lung biopsies and other study-related tasks, perhaps he/she should also consider this benefit–risk ratio in light of the actual dollar amount he/she might realize. It would therefore be prudent to inform potential subjects that taxes may have to be paid on the $5000.
Of course, if some of the $5000 is spent on parking, baby sitting, or other legitimate study-related expenses, these items could be used on tax return forms to offset a portion of the study compensation income.
The tax will have the greatest impact on those with the highest income and have the least impact on those with no other income. Nevertheless, the surprise of having to pay income tax on the $5000 probably will be greatest for those with the lowest income. If the stipend for a clinical study is small, say $50, then neither rich nor poor subjects will be greatly impacted by federal and state taxes.
There are other considerations regarding the $5000. Some ethicists would assess this payment as "coercive," particularly for low-income persons. Others prefer to place the payment into a free enterprise/willing adult framework. In either case, net after-tax realizable income is applicable to the discussion of payment ethics.
Informed consent content should include an accurate and thorough description of all relevant factors that might influence a potential subject to enroll or not enroll in a study. Most subjects probably do not initially consider their tax burden on earned income when they read and discuss consent.
Fuller disclosure of net monetary benefit in informed consent is the right thing to do.
The authors can be contacted at: GCPA, Inc., 12208 Fairfax Station Road, Fairfax Station, VA 22039, (703) 988-9080, fax (703) 988-9082, email: GCPaudits@aol.com
Douglas R. Mackintosh, DrPH, MBA, is president of GCPA Incorporated and a Member of the ACT Editorial Advisory Board
Vernette J. Molloy, MBA, RN, is vice president of GCPA Incorporated