Will Australia's new medical research fund be the biggest in the world?
Updated
Treasurer Joe Hockey's budget announcement of a new Medical Research Future Fund, set to reach $20 billion by 2020, was the sweetener that came alongside a raft of new health co-payments.
Mr Hockey holds great hope for the fund, saying in Question Time on May 15 it could be instrumental in finding a cure for cancer, dementia, and Alzheimer's disease.
He said in his budget speech that within six years it will be "the biggest medical research endowment fund in the world".
Will it? ABC Fact Check investigates.
- The claim: Joe Hockey says within six years Australia will have "the biggest medical research endowment fund in the world".
- The verdict: There is at least one bigger medical research fund in the world, and some governments spend more money each year on medical research than the new Australian fund will distribute.
The Abbott Government's fund
The Government's new fund will have $1.1 billion capital at its inception in January 2015, and the Government estimates it will reach $20 billion in 2020.
The initial capital will come from the existing Health and Hospitals Fund and additional money will be sourced from savings measures in the health portfolio announced on budget night.
One of those savings measures is a $7 co-payment for general practitioner, pathology and diagnostic imaging services.
The fund is expected to make its first distribution of $20 million to medical research in the 2015-16 financial year. By 2022-23 it is projected to distribute about $1 billion a year.
Private medical research funds
The Wellcome Trust, located in the United Kingdom, is a global charitable foundation which funds scientists, clinicians and public health researchers.
The trust's endowment stands at approximately 16.4 billion pounds, or just over $29 billion. In 2013 it distributed over 726 million pounds ($1.3 billion) in research funding and direct charitable activities. Most of the money went to scientists working in medical research in the UK.
It was established by American born Sir Henry Wellcome who arrived in London in 1880 to start a pharmaceutical business and died in 1936. In his will, Sir Henry left all the shares in his company to found the trust, and directed the income from that capital be used for two purposes - advancing medical research and understanding the history of bioscience.
In 1992, after a restructure of its assets which doubled its income, the trust claimed to have become "the world's largest grant-giving charity".
Today, it has a host of major initiatives including the Cancer Genome Project, which is looking to identify which of the 30,000 human genes are involved in the development of cancer. It also funds many medical research programs in British universities, including Oxford and Cambridge.
The Howard Hughes Medical Institute, located in the United States, was established by aviator and film maker Howard Hughes in 1953, and funded by profits from his aircraft company. After his death in 1976, the institute's trustees sold the company to create a more flexible endowment for the support of biomedical research. Most of its funding goes to directly employed scientists, rather than to grants for specific research projects, on the basis that this is more flexible and allows researchers to explore and change direction.
It counts scores of Nobel laureates among its staff and former staff, and directly employs more than 700 scientists.
Last year, the institute distributed more than $750 million for biomedical research and $80 million in grants for science education. Its assets are currently valued at just over $18 billion.
International comparisons of government funding
The United States government gave its National Institutes of Health $30 billion in annual funding in 2013.
More than 80 per cent of this funding was awarded through almost 50,000 competitive grants to more than 300,000 researchers in the US and across the globe.
The institute has its own laboratories with about 6,000 scientists working on its campus in Bethesda, Maryland.
In recent years China has more than tripled its government's expenditure on biomedical research and development. However, its spending still falls short of the Japanese government's $9 billion and the European collective government spending of over $28 billion.
Current medical research funding in Australia
In 2012 the Australian government gave over $850 million in funding to the National Health and Medical Research Council (NHMRC), which allocated 1,300 grants to medical research programs across the country.
The Abbott Government's new fund will be in addition the NHMRC funding. It will roughly double the amount of money the Australian Government allocates to medical research by 2023.
The verdict
There is at least one medical research fund - the Wellcome Trust - bigger than Australia's projected $20 billion Medical Research Future Fund.
And some governments spend more money each year on medical research than the new Australian fund will distribute.
Mr Hockey's claim is overblown.
Sources
- Joe Hockey, budget speech, May 13, 2014
- Joe Hockey, Hansard, May 15, 2014
- Budget 2014-15, Health
- Budget Overview 2014-15
- Wellcome Trust, Annual Report and Financial Statements2013
- Wellcome Trust, Cancer Genome Project
- Howard Hughes Medical Institute, financials and annual reports, 2013
- US Department of Health & Human Services, National Institutes of Health, NIH Budget
- New England Journal of Medicine, Asia's Ascent - Global Trends in Biomedical R&D Expenditures
Topics: medical-research, health, doctors-and-medical-professionals, liberals, government-and-politics, budget, hockey-joe, australia
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