Medical Research Future Fund
The Medical Research Future Fund (MRFF) is a new funding initiative of the Australian Government to ensure that Australia stays at the leading edge of medical science and innovation.
Created in 2015, the MRFF currently has a balance in excess of $4.5 billion and is forecast to reach a balance of $20 billion by 2020. The investment earnings on the balance is to be used to fund health and medical research and medical innovation- new drugs, devices and therapies and new ways to improve health and wellbeing with around $1 billion per year available by 2021.
The MRFF will progressively fund more health and medical research and innovation in our hospitals, clinics, medical research institutes, universities and companies to improve health outcomes for Australians.
MRFF Strategy and Priorities
The inaugural 5 year Strategy and 2 year Priorities developed by the MRFF Advisory board were released on Wednesday 9 November 2016.
The Strategy’s vison is ‘A health system fully informed by quality health and medical research’ and its Aim is ‘Through strategic investment, to transform health and medical research and innovation to improve lives, build the economy and contribute to health system sustainability.’
This focus in the vision on the health system is illuminating, and is carried through into the Strategy and Objectives. The objectives underlying this Aim emphasise the importance of creating health and economic benefits, embedding research evidence in healthcare, and driving collaboration and innovation across research and healthcare.
The Strategy itself is new, but provides continuity with existing strategies and programs. It describes the MRFF Strategy as building on the vision outlined in the Strategic Review of Health and Medical Research (the McKeon Review) undertaken in 2012, and seeks to both work with and complement the programs of the NHMRC, the National Innovation and Science Agenda and Innovation and Science Australia.
The Strategy is not seeking to achieve everything- it identifies its role as reinforcing the existing research pipeline and filling in some of the gaps in areas like health services research and the ‘valleys of death’ at the pre-clinical and the post proof-of-concept commercialisation stages.
The Strategy identifies six Strategic Platforms, which in turn provide a framework for the Priorities identified for the first two years. The six Platforms and their related two year Priorities are summarised below.
- Strategic and international Horizons
This Platform seeks to position Australia as a leader and collaborator in several key areas of international significance. Priorities in this Platform are: Antimicrobial Resistance; International collaboration; and the impact of disruptive technologies on health services delivery and training.
- Data and Infrastructure
This Platform seeks to make better use of existing data and infrastructure. Priorities are:
clinical quality registries; research with other agencies to identify how we can better utilise the MyHealth Record and linked health and social data for research; a consumer- driven health and research agenda; developing the means to measure and report on the economic returns from the MRFF’s investments; and research on the surveillance of and response to current and emerging infectious diseases and antimicrobial resistance.
- Health Services and Systems
Bolstering health services and systems research is identified by the Strategy as a particular need, and the Priorities are: testing the feasibility of a national institute for evidence based and cost-effective health care and public and preventive health; using the MBS Review to investigate and develop the evidence base for interventions that currently have limited supporting evidence; research in behavioural economics in public and preventive health; and post-clinical effectiveness studies of drugs and other health interventions and pre-clinical work on the re-purposing of existing drugs.
- Capacity and Collaboration
Skills development of researchers and healthcare professionals, and more collaboration across research disciplines and between sectors is identified as critical. The Priorities are:
identifying and accessing existing high cost infrastructure; Industry Exchange Fellowships; and expanding the existing NHMRC Practitioner Fellowships Scheme.
- Trials and Translation
Particular attention has given by the Strategy to the role of clinical trials. Priories under this Platform are: support for new and existing national clinical trial networks; extending clinical trials of proven therapies with limited commercial potential to at-risk groups; and working with the NHMRC-accredited Advanced Health Research and Translation Centres to support the translation of research in key areas including clinical variation, co-morbidity and health inequity.
Overcoming barriers to research commercialisation will initially be addressed by: creating incubator hubs for diagnostics, devices and molecular therapeutics; and the Biomedical Translation Fund.
The Strategy and Priorities are available at on the Department’s website.
The MRFF and indirect research costs
During the Advisory Board’s consultation on the MRFF Strategy and Priorities, indirect research costs and how the MRFF would address them was raised on several occasions. The MRFF Strategy makes it clear that this is an issue that the Advisory Board is unable (or unwilling) to address.
“A whole-of-government approach is needed to address the issue of research costing to ensure the research sector can continue to thrive. MRFF funding cannot in isolation solve the conundrum that surrounds indirect costs and may with the injection of new funds increase the need for a solution. The Advisory Board, while advocating for a whole-of-government and research sector agreed solution, must therefore abstain from implementing yet another funding model. In the short term MRFF program investment should adhere to existing costing approaches. Collaboration between Government and funded bodies to identify an equitable solution should be prioritised.” MRFF Strategy, p.7
This leaves open the question of how MRFF funding will be treated for Research Infrastructure Block Grant purposes- will it be included as Category 1? It also raises the question of what arrangements will be made for MRIs, which currently receive a contribution from the NHMRC towards NHMRC funded grants through IRIISS.
Research Australia raised this issue in its pre-budget submission to the Treasurer in December 2016.
Funding from the MRFF
The next step is for the Minister to announce the first round of funding, expected to be approximately $60 million for 2016/17. Announcements are expected to be made shortly (but we have been hearing that now for weeks).
Funding into the MRFF
The first contribution to the Medical Research Future Fund was made on 22 September 2015 in the form of a transfer of A$1.01bn from the Health and Hospitals Fund. Since then there have been two transfers made by the Australian Government of $2.139 billion on 1 December 2015 and $1.277 billion on 26 August 2016. As at 31 December 2016, the MRFF had an account balance of $4.568 billion.
This balance is invested in accordance with an investment mandate, which sets a target return of at least the Reserve Bank of Australia Cash Rate target + 1.5% to 2.0% pa, net of investment fees, over a rolling 10 year term. So far, the Medical Research Future Fund has achieved a return of 3.4% pa since inception, beating the benchmark target return of 3.1% pa. For more information go to the Future Fund website.
Why now and why Australia?
- The Australian government already provides funding from the budget for health and medical research, but every year many great research projects with the potential to lead to new and important discoveries go unfunded. It is intended that the MRFF will fund this research.
- Even when research is funded and the findings are promising there is often not enough funding to take the idea further. The MRFF will mean more research will be developed into new drugs, devices and therapies that can benefit patients.
- Hospitals and clinics engaged in research provide more effective healthcare, have access to pioneering clinical trials that bring treatments to Australian patients earlier, and attract the best and brightest health professionals.
- Solutions to health problems specific to Australians (e.g Indigenous health issues, tropical infectious diseases) require an Australian-based research effort.
- Safeguarding the community from emerging health risks in our country (e.g dengue fever) can only happen with Australian health and medical research.
- Access Economics estimates that every $1 invested in Australian health and medical research generates an average return of $2.17 in benefits to the nation.
Is $20 billion for the MRFF a certainty?
No. The success of the MRFF is dependent on money being set aside by the Australian Government in the Commonwealth budget every year for the next four to five years. The current Government is committed to this target and has made a good start, but it will take another four years and another four Commonwealth budgets to get to the target of $20 billion.
The MRFF A Research Australia Perspective
Research Australia has drawn on the extensive consultation process we undertook with our broad membership and alliance partners to develop The MRFF A Research Australia Perspective. This document provides some background on the policy context and funding framework within which the MRFF will operate and proposes some ideas for the inaugural five year MRFF Strategy and first two year Priorities.
Download the document > MRFF A Research Australia Perspective