The proposed $2 million cap on the R&D Tax Incentive will seriously damage clinical trials activity in Australia, should the Federal Government proceed with the measure.
Despite years of building momentum for Australia as an internationally competitive destination for early access to new treatments and medical devices and its associated economic benefits, capping the Incentive for clinical trials and related R&D will impact the industry.
The Federal Government has placed innovation firmly on the agenda, launching the National Innovation and Science Agenda (NISA) in late 2015. It has developed and implemented innovation-focussed policy to back innovation in biomedical research, such as the Medical Research Future Fund (MRFF), which included the $250 million Biomedical Translation Fund (BTF) to develop and commercialise promising outcomes from Australia’s research.
The Federal Government has funded the MTPConnect Industry Growth Centre to advance the medical technologies, biotechnologies and pharmaceuticals sector. The potential reduction in tax support runs counter to the Federal Government’s recognised commitment and will hit clinical trials especially hard, a critical part of the R&D process that enables research to reach Australian patients in need.
Clinical trials have a pivotal role to play in the economy of the future, which will strongly rely on innovative jobs, exports and productivity. Clinical trials bolster the economy and are already supporting its transition from a post-mining boom.
Beyond the economic benefit to Australia, R&D in the life sciences can develop therapies, cures, medical devices and diagnostics for patients around the world. Yet if the $2M cap is enacted, jobs, investment, exports and economic activity related to clinical trials will be lost from Australia in a way that matters.
Australia’s significant investment in medical research will be squandered without commercialisation, a process that clinical trials are mandatory to achieving human therapeutics. Australian SMEs who strive to commercialise research from Australian universities and medical research institutes rely on the R&D Tax Incentive’s refundable component as a pivotal enabler of their clinical trials.
AusBiotech has suggested four recommendations to mitigate harm to the biotechnology industry, with particular emphasis on protecting clinical trials:
- Clinical trials ought to be considered separately from other R&D processes to preserve the hard-won momentum;
- If a cap must be set, SMEs commercialising valuable medical research via clinical trials and supporting activities should be exempt;
- The existing Advanced Finding mechanism could facilitate exemptions to any cap for clinical trials, making the implementation straight forward; and
- If the 20 per cent premium is enacted, availability to only large companies is not defensible: it should be available to all companies collaborating with public research organisations.
To support AusBiotech's advocacy efforts, Members are urged to complete a short survey qualifying the damage that will be inflicted if the recommendation is accepted by Government. This survey is aimed at SMEs eligible of the refundable component and will be impacted by the proposed $2M cap Complete the survey here.
If you have any additional documentation to demonstrate how the proposed cap on the R&D Tax Incentive will impact your company, please send to Lorraine Chiroiu, Deputy Chief Executive Office, AusBiotech, at email@example.com.