Clinical trials could be "cancelled" under controversial Budget proposals — survey suggests

A survey of 59 biotech, medtech and health tech companies has found that 66% believe they will be ‘worse off’ under proposed R&D Tax Incentive changes. The survey was conducted by AusBiotech of its members — AusBiotech saying that the proposal to limit the RDTI’s longstanding refundable tax offset for companies less than 10 years old is “not fit for purpose and does not cater to the realities of the sector”.

New medicine, vaccine or advanced therapeutic development routinely takes well in excess of a decade, AusBiotech points out, with companies in this sector spending years developing new medical products that “improve and save lives in Australia and around the world”.

“Australian health and medical companies navigate multiple commercial ‘valleys of death’ as they progress from research through pre-clinical development, clinical trials, regulatory approval and manufacturing scale-up before revenue generation through market access is even possible,” AusBiotech said in a statement.

Other key insights of the survey include:

• 100% of companies aged 6–15 years expect significant or moderate impacts; for biotech companies specifically, 82% aged six years and older reported that the impact would be significant.
• 76% indicated they will be either significantly or moderately impacted and of these, 30 companies said the changes would impact them significantly and could involve moving overseas to more favourable countries, moving critical clinical trials overseas or reconsidering Australian manufacturing.
• 61% said proposed CGT changes would negatively impact them.
   

“The results send a clear message — companies already know they will be worse off under these changes, and if implemented as proposed, many will choose to leave,” AusBiotech CEO Rebekah Cassidy said. “The changes could cause irreversible damage to our vibrant and world-leading biotech, medtech and health tech sector.

“The impacts are already being felt by the sector, with the changes being discussed within boardrooms, investment committees and development teams. Decisions about where clinical programs are located, where investment is deployed and where companies establish long-term operations are being influenced by perceptions of Australia’s future competitiveness.

“The consequences are real and profound — lifesaving technologies could be shelved, promising clinical trials cancelled, companies closing, investors fleeing and some of our best talent leaving Australia.

“The proposals are at odds with existing government policy which is confusing for the sector. For example, ‘Biotechnology’ is one of the Australian Government’s seven Critical Technologies in the National Interest and a priority sector for the National Reconstruction Fund, while ‘Health and Medical’ is the first pillar of the Ambitious Australia: Strategic Examination of R&D report.

“Biotech is a major economic success story, supporting more than 350,000 jobs across almost 3000 organisations. It makes no sense to jeopardise a sector which contributes so substantially to our economy and prosperity.

“We have been working with the sector on options to help government to urgently fix the unintended outcomes of these poorly conceived proposed policy settings and get them right so that the sector can continue to grow, thrive and save lives. We just need government to urgently meet us at the table,” Cassidy concluded.

The survey follows concerns AusBiotech raised in May in response to Budget 2026–27.

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