The Burden of Clinical Trial Participant Taxation

Removing the financial and logistical barriers that limit patient participation in clinical trials is a top priority for all clinical research industry partners.

However, the current tax treatment of participants discriminates against vulnerable or underrepresented communities. In the United States, reimbursements more than $600 are taxed as income, which can jeopardize eligibility for government benefits, such as food stamps, for low-income participants.

Join SCRS and our partners in advocating for change and removing barriers for all patients in clinical trials.

In 2023, the SCRS community wrote more than 200 congressional letters urging Congress to pass the Cures Act 2.0. In these letters, we advocated for:

    • non-taxable patient reimbursements
    • removing the cap for rare diseases
    • eliminating the burdensome CMS Medicaid form
    • exempting travel reimbursements from OIG restrictions
    • allowing sponsors to cover Medicare beneficiaries’ copays and deductibles
    • convening a stakeholder meeting to address barriers and simplify rules for trial-related routine care coverage

Supporting Legislation & Other Working Groups

Harley Jacobsen Clinical Trial Participant Income Exemption Act

In January 2024, U.S. Reps. Mike Kelly (R-PA) and Chrissy Houlahan (D-PA) introduced the Harley Jacobsen Clinical Trial Participant Income Exemption Act. The act aims to:

  • Increase diversity of the enrolled patient populations across all trials, aligning with the strategic goals of the NIH and FDA, thereby improving the effectiveness of drug development for the benefit of the general American public.
  • Provide greater access to experimental therapies to the least-empowered Americans (those with disabilities, minority populations, chronic physical illness, low-income populations, low-education level, etc.).
  • Eliminate the reporting requirements for both the patient/caregiver (the payment recipient) and the 1099 reporting requirement of the payor. This will also protect participants who rely on social welfare programs such as SNAP, WIC, and others from exceeding income requirements.

Clinical Trials Modernization Act

Larry Bucshon, M.D.(R-IN) and Raul Ruiz, M.D. (D-CA) introduced the Clinical Trials Modernization Act on May 16, 2024. This act will address economic barriers to participation in clinical trials by:

  • Exempting free digital health technology that enables trial participation from the Anti-Kickback statute when doing so will facilitate clinical trial participation by underrepresented populations;
  • Allowing patient cost-sharing by a drug or device manufacturer in a clinical trial when specific criteria are met;
  • Excluding remuneration for participation in clinical trials from taxable income.

Other Important Initiatives

DIA Landscape Analysis

Led by Donna Libretti Cooke and Carie Pierce, DIA is conducting a Landscape Analysis to address Participant Compensation in Clinical Trials, with an initial focus on the U.S. They are researching sponsor/CRO participant payment/compensation strategies for their clinical trials. The analysis and review will provide an assessment of the current state-of-the-industry approach and make recommendations to bring industry transparency, consistency, and standardization to participant compensation in clinical trials. The aim is to make clinical trial enrollment faster, reduce dropout rates for financial reasons, and ensure that participants are not negatively impacted financially as part of a clinical trial, with the end goal of enhancing diversity in clinical trials.

How to Support:

  1. Educate yourself and your organization on the two bills and how you can build a network to help.
  2. Educate the political action committees within your company. Have them get involved with this legislation and help patients with your voices.
  3. Write a congressional letter urging action. Use the template below to get started.
  4. Download the American Cancer Society Cancer Action Network (ACS CAN)’s Fact Sheet on the H.R. 8412 and send to your government affairs teams and local representatives.
  5. Get involved with the SCRS Payment Initiative.

Email Your Congressperson

  1. Visit house.gov
  2. Enter your zip code/address.
  3. Select your representative: Each representative has a slightly different site – locate the email your representative. Many are a small envelope under their name.
  4. Follow directions to enter your personal information.
  5. Some will ask for a topic – select health or healthcare.
  6. Copy and paste the content below, filling in relevant details in the highlighted areas. Note: Most of the representatives have a very limited form of 2000 characters. The template letter will allow you a few sentences of a personal nature. See example.

Subject: Tax Burdens for Clinical Trial Participants

 

[DATE]

The Honorable (insert Congressman/woman name)
Address
Cite, State Zip

 

Dear [Name],

My name is [Your Name] and I live in district [Your District].  [Insert a personal message.]

[Jackie’s personal example: I have spent 30 years dedicating my career to the advancement of clinical trials to bring medicines to patients. All patients! As I have entered retirement, I am focused on ensuring clinical trials are a care option and that all clinical trials have a plan for diversity.]

Acknowledging health as a human right recognizes a legal obligation on states to ensure access to timely, acceptable, and affordable health care. However, we continue to perpetuate health disparities through existing legislation that works for some but not all – especially as it relates to clinical trial access and diversity. Please consider several actionable items that can change the current status quo, reduce patient burden, and improve clinical trial diversity and equitable access.

Currently, some compensation provided to clinical trial participants is classified as “income” and is taxed if it exceeds $600. This taxation can create financial hardship, particularly for participants in lower income brackets, as it may risk their eligibility for government benefits due to exceeding tax reporting limits. This causes unnecessary friction for any patient entering a clinical trial.

Two bills have been introduced in 2024 that support all clinical trial participants: The Clinical Trial Modernization Act and the Harley Jacobsen Clinical Trial Participant Income Exemption Act. Notably, both bills advocate for removing taxation for clinical trial participants. If these issues are not addressed, we will NOT be able to adequately focus on issues we face with diversity in clinical trials.

I am grateful for your leadership in ensuring equitable access for diverse populations is possible and required. I look forward to working with you on this and other proposals that will improve the lives of people across the United States.

Respectfully,

Your Name
Credentials
Email address
Phone number