Medical Research Belongs to Private Enterprise

The federal government has thrown another $500 million at the Medical Research Futures Fund, but is it right for taxpayers to be slugged with such a huge burden when the private medical sector already provides the same service...

Researchers have a lot to celebrate after last week’s federal budget, with Canberra announcing that it will increase investment in the Medical Research Futures Fund (MRFF). Treasurer Scott Morrison boasts that increased medical research spending will generate income and jobs, will build “another strong and competitive industry” and boost diagnostic tools, clinical trials of new drugs and medical technologies. While these things all sound great, the case for expensive, multibillion-dollar research footed by taxpayers is hollow at best when it is already undertaken by private investors, entrepreneurs and innovators. Importantly, these individuals and businesses are capable of doing a better job without draining public finances.

The new medical research budget will see a whopping $500 million invested over a ten-year period for genomic research. The government hopes that dipping deeper into the public purse will turn Australia into a world leader in this field. $275.4 million will be invested in mental health research, preventative health ($18.1 million), health systems research ($39.8 million), women’s health ($17.5 million) and advanced health research translation ($75 million).

This sort of funding comes with its fair share of problems. Of particular concern is the absence of a private investor’s commercial motives due to the lack of accountability mechanisms such as shareholder meetings, coupled with abundant access to taxpayer funds granted to bureaucrat decision-makers. As a result, millions go towards projects that give taxpayers little or no benefit and are often driven by political factors or partisan social agendas.

Unlike the private sector, there is no requirement for the failure of these projects to be disclosed to and critically examined by the investors (taxpayers in this case), and the heads of those responsible for poor research funding decisions are less likely to roll as a result. Of course, in the instances where publicly funded research does produce some ultimate benefit, the government of the day will make sure that even more is spent on publicising the discoveries, affording them political mileage points they can take to the next election.

 

The government spent an exorbitant $850,784 for a study of medieval Italian noblewoman, Catherine de Medici’s letters and writings on the basis that it would produce an “exciting new analysis”.  Just last year, The Australian Research Council spent $191,394 to evaluate strategies on how winemakers use websites and share information.

Medical research projects are no exception. Millions have been spent on fields such as stem cell research which have not produced tangible outcomes to benefit patients or the medical community that justify their cost to taxpayers. There needs to be a greater discussion about how research funding can be prioritised, whether such research is likely to deliver what it promises, and who will be able to take advantage of the resulting innovations.

A better solution is to encourage private sector innovations and research backed by private funding. The CEO of the National Health and Medicine Research Council (NHMRC), Warwick Anderson, has called for more research-trained people in the private sector to increase competitivity with other nations. Senator David Leyonhjelm has similarly slammed medical research hand-outs and called for medical researchers to turn to private sources for their funding. Outside of multibillion-dollar projects funded by private investors, the American model, for example, encourages and features philanthropic private donations for research projects where commercial risk-takers can’t be found.

The private sector has a long and remarkable history of promoting and supporting scientific research and technical development without draining public resources. It has improved processes that were detrimental to public health and the environment, produced widely adopted technologies and driven the development of entire economic sectors. While governments must cater to a diverse range of priorities and interests, private business and philanthropists have the resources and expertise to focus on underwriting scientific innovation. Millions in private research investment goes towards projects which are most likely to produce medical or commercial benefit as profit incentives are protected by intellectual property regimes that encourage further funding.

The reality is that very few medical research projects produce tangible results because it is inherently a difficult field that is globally competitive and requires substantial investment for unpredictable benefits. This inefficiency and chance of failure is only compounded when funding is administered by unaccountable bureaucrats spending other people’s money who often lack both the expertise and the incentive to make shrewd decisions possessed by private funders. The government should reward investors, entrepreneurs, innovators and businesses by reducing red tape and regulatory costs to drive more private research. Billions of dollars currently spent on public research is better allocated elsewhere and could supply us with infrastructure and services we can all benefit from for decades to come.

If public health and the well-being of those who suffer from illness or ageing is the primary motive of the MRFF, the billions are certainly better spent on more hospitals, more beds, subsidy for essential yet expensive medicines and other measures to relieve strain on our healthcare system and the families of the sick – not on public sector vanity projects.

 

Anjali Nadaradjane is a Research Associate at the Australian Taxpayers' Alliance

[This article first appeared in The Spectator Australia]

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