Opinion: 2018–19 Budget should focus on biotech
The federal government will hand down its 2018–19 Budget on Tuesday, 8 May, and members of Australia’s biotech sector are waiting with bated breath to learn how they will be affected.
Dr Chris Nave is no stranger to the sector, as managing director of venture capital firm Brandon Capital and CEO of the Medical Research Commercialisation Fund (MRCF) — Australia’s largest life science investment fund. With $505 million under management, the MRCF has invested in over 30 companies developing promising medical innovations — an investment that Dr Nave thinks is well worth it.
“It is a pivotal time for Australia’s burgeoning biotechnology sector, which is being spurred on by sound government policy in the form of the R&D tax incentive and the $500 million government-initiated Biomedical Translation Fund (BTF),” said Dr Nave, referring to the jewel in the heart of the government’s National Innovation and Science Agenda (NISA) opened in 2016.
“For more than 100 years there has been successive government policy focused on funding innovative medical research which has made Australia one of a handful of countries globally producing the very best medical research.
“This strong foundation of excellence, combined with the ease with which clinical trials can be conducted, strong patent and regulatory laws and increasing access to capital, uniquely provide Australia with a generational chance to supercharge this already important industry.”
Yet despite the value of biotech to the Australian economy, Dr Nave explained that the sector is currently reliant on venture capital. “The reality is that the level of risk-tolerant investment capital in Australia remains severely inadequate when compared to the size of our medical and clinical research sectors,” he said.
“This lack of capital has traditionally seen promising Australian medical discoveries leave our shores early in development to access these larger pools of capital, with little economic benefit to Australia. With the advent of the federal government’s Biotechnology Translation Funds and the Medical Research Future Fund, hopefully this intellectual property drain will be arrested.”
So how do we keep Australian research in Australia? According to Dr Nave there is a “fundamental problem” with how scientists are incentivised, with researchers rewarded for publishing their work in scientific journals but punished for choosing to commercialise their discoveries.
“The government needs to look at making structural changes to motivate and reward researchers for translating their tax fund research outcomes into industry. Australian researchers represent many of our brightest and most talented individuals; we need to provide them the pathway to direct these capabilities for the benefit of the country.”
The key to this, according to Dr Nave, lies in the Medical Research Future Fund (MRFF), established by the government in 2015 with the aim of distribution around $400 million in medical research funding over several years.
“It is important that a significant proportion of MRFF investment is targeted at translation and commercialisation, enabling and awarding those researchers that choose to drive their research from the laboratory to the bedside,” said Dr Nave. “The fund needs to do more than just invest in pure research, as it is only through translation and commercialisation that true health and economic benefits are reaped.”
In addition to the MRFF, Dr Nave said the R&D tax incentive (RDTI) “plays an absolutely crucial role in making Australia an attractive location for carrying out clinical research, ensuring that Australian patients get access to the latest medical treatments. As a policy, it is doing a significant amount to expand and mature our local biotech sector, which has the potential to deliver enormous wealth and health benefits to this country.”
Despite this, Dr Nave said the pressure to achieve a budget surplus may tempt government to sacrifice programs such as the RDTI. “However, while this may provide a short-term budget win, the RDTI is crucial in supporting Australia’s innovation ecosystem and industries that will ultimately drive job creation and Australia’s future prosperity,” he said.
“Rather than taking the politically expedient approach of euthanising the program, we believe that government should focus its efforts on tightening the eligibility so that the program supports the types of pursuits for which the program was originally intended. This will significantly reduce the total cost of the program and will ensure that the funds are directed to where there is a legitimate need for government intervention.”
The 2018–19 Budget will be released at approximately 7.30 pm (AEST) on Tuesday, 8 May 2018.
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