AusBiotech claims the industry commercialising medical research could be “damaged in the crossfire” if the Australian Government pushes ahead with plans to overhaul the $3 billion Research and Development Tax Incentive.
Treasurer Scott Morrison last week flagged major changes to the RDTI in the upcoming May Budget to restore the “integrity of the program”.
Allegations of widespread rorting of the RDTI led Innovation and Science Australia in January to recommend implementing changes, including a cap on refunds to $4 million a year and $40 million for the lifetime of smaller entities.
Speaking at a banking summit, Morrison said he will no longer be writing any more "blank cheques" and that the incentive had been "taken for a ride”.
But AusBiotech CEO Glenn Cross warned that capping refunds would be a setback for the medical technology and pharmaceutical (MTP) sector.
“If the government is concerned about misuse of the program, then why not clamp down on misuse and preserve the policy intent? How is capping the program a rational solution? This cap is going to wind back the 5 per cent annual growth Australia is achieving in clinical trials and the related jobs that we have seen in Australia since the scheme began,” he said.
Seventeen per cent of ASX-listed MTP companies that claim the RDTI will be affected as soon as the changes are implemented, according to Cross, who has called for the MTP sector – which generates about $4.4 billion in gross economic value added to the Australian economy – to be protected from the measures.
“The RDTI has been critical to Australia’s success in attracting more investment for the commercialisation of medical research because it stretches our medical-research dollars further. By fostering a strong Australian medical technology, pharmaceutical and life sciences R&D sector, we are encouraging the long-term investment in Australia that creates highly-skilled jobs, attracts clinical trials and grows the economy we need.”
Cross said limits to the RDTI will inequitably harm MTP research and development, which makes up only about 8 per cent of claims and has a record of compliance.
Compared to most other sectors, the timeline to commercialisation of medicines and vaccines is a lengthy 10-15 years on average and a sizeable $1.5 billion-$2.2 billion average to gain approval thanks to significant scientific and regulatory hurdles to reach market.
It looks like it’s your first time here.
Get weekly news updates from Healthcare IT News.