Tag Archives: MRFF

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:

  1. the concerns surrounding the source of the funds in the MRFF;
  2. 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
  3. 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.

Elizabeth Campbell

MRFF: what is the future of the future fund?

Reading the recent reporting and commentary on the Medical Research Future Fund (MRFF), it is difficult to get a grasp on whether its introduction will be a “good thing”.

Overwhelmingly, research institutes support the introduction of the MRFF, though some commentators have requested a more “socially acceptable” way of funding the research. The opposition in this respect had been focussed on the prospective source of the funds, namely the $7 dollar GP co-payment. While the government’s rethink of the policy would exempt certain vulnerable groups from the requirement to pay to visit their GP, commentators have pointed to evidence from around the world that suggests that any co-payment will stop people from accessing health care. If people skip necessary GP appointments and get sicker, costing the health system and the broader economy in doing so, will a MRFF funded in part by the savings made from these individuals ultimately have no net benefit?

Other commentators question whether the MRFF is simply an accounting sleight of hand – a way for the government to say that it is not making any cuts to health spending while doing just the opposite. In this way  “savings” in health (such as the cuts made to National Health and Medical Research Council (NHMRC) and Commonwealth Scientific and Industrial Research Organisation (CSIRO)) are repurposed to build the $20 billion MRFF, the interest on which will be spent on medical research. The net saving to the government’s budget is immediate. However, as the payments from the net interest earnt on the MRFF will now begin in the 2015-16 financial year, and as the government is in deficit, it will have to add further borrowing to its normal borrowing (which covers the deficit) in order to finance the spending on medical research through the MRFF. As a mere lawyer it has taken me ages to understand the thinking behind this argument, but it seems to me to mean that the money for medical research is ultimately coming from the same place. Is it drawing too long a bow to say that the MRFF is not additional research funding at all?

Further, it should be asked what the MRFF will support that is not currently supported by the country’s two main funding bodies, the NHMRC and Australian Research Council (ARC). I would like to see a focus on funding to support the translation of research through to product development and ultimately to commercialisation. A recurring theme at industry events is that, while Australian scientists excel at research, we fall far behind in translating that research to commercial outcomes.

Setting aside where the funds will come from, and to what end they will be directed, Australia’s current level of investment in medical research is just 75 cents of every $1,000 of the nation’s GDP and less than two-thirds of the OECD average. Investing more in medical research is a solid investment for the future and one which the government should embrace.

Elizabeth Campbell