The Medical Research Future Fund to become a reality
On 12 August 2015, the Senate passed the government’s legislation to establish the Medical Research Future Fund (the MRFF). The intention of the Fund is to provide funding for medical research and innovation, and to provide stability for such funding into the future, with the capital to be preserved in perpetuity.
According to a joint press release, the MRFF will receive an initial contribution of $1 billion from the Health and Hospitals Fund. The remaining contributions into the MRFF will come from 2014-15 Budget savings in the health portfolio which have passed, or will pass through the Parliament in the future, until the balance in the MRFF reaches $20 billion. The first $10 million in additional medical research funding will be distributed in 2015-16 and over $400 million is estimated for distribution over the next four years.
I have previously written about the MRFF and commented on:
- the concerns surrounding the source of the funds in the MRFF;
- whether or not the MRFF will in fact be additional research funding to that offered by the National Health and Medical Research Council (NHMRC) and Australian Research Council (ARC); and
- whether the MRFF would support the translation of research through to product development and commercialisation.
On the first issue, the government’s failure to part fund the MRFF through GP co-contributions has been well-documented and, with the current make-up of the Senate, such a measure is extremely unlikely to ever succeed.
On the second, setting aside whether or not the funds which will make up the MRFF will be cannibalised from funds that would otherwise have been available for distribution by the NHMRC or ARC, one of the 20 changes that the Senate made to the legislation was that the independent expert advisory board in charge of administering the MRFF will include the CEO of the NHMRC; my hope is that this will go some way towards providing cooperation and coordination between the two funds. In addition, the Minister for Health will be required to report to the Parliament once every two years on how research funded by the MRFF meets the MRFF board’s strategy and priorities. These reports will have to compare the spending profile for the MRFF against that of the other Commonwealth funds available for medical research and innovation and should prevent wastage of resources.
The third issue is, essentially, what stages of medical research will be supported by the MRFF. It is widely accepted that the translation of the excellent research and innovation emerging from Australia’s universities and research institutes is an area that needs attention. If the MRFF focusses solely on early stage innovations, and businesses are not given an incentive to translate, then ideas could move overseas for development and commercialisation with the investment from the MRFF never being realised through company growth and sales in Australia. On the other hand, funding late-stage commercialisation of medical research is a domain that would typically be left to – and some would argue is better left to – the private sector with its nous for assessing commercial risk. Translational research sits between academic research and the research required to commercialise medical innovation; investment in this key stage could increase the productivity and profitability of the medical research sector in Australia.
The MRFF will raise Australia’s overall expenditure on medical research to the average OECD level. I hope that its administration will build on the strengths of Australia’s medical research sector.