Federal medical R&D funding in Australia

The Australian Federal Treasurer has allocated nearly A$1.0 billion ($763.7 million) in funds over nine years for medical research, mental health and drugs in this year's federal government budget, funded partially from the impending sale of Medibank Private, the nation's health insurance provider, and following significant cuts to the health sector in last year's budget.

Total spending on health and aged care rose from A$45.0 billion last year to A$47.6 billion, an increase of 5.7%, which outstripped health inflation in the year to March 2006. The cost of subsidizing drugs, however, has fallen A$260.0 million, due to lower-than-expected growth in certain drug groups. The government will pay an extra A$176.5 million in Medicare rebates over the next five years, including annual health checks for all Aboriginal children.

The government has forecast a A$260.0 million reduction in the expected cost of the Pharmaceuticals Benefits Scheme due to slower growth in certain drug groups including anti-inflammatory, cholesterol-lowering and psycho-analeptic drugs. The overall cost of the PBS next year is forecast at A$7.7 billion, and this is expected to reach A$9.5 billion by 2009-10. This slower growth in the PBS could support pharmaceutical companies' arguments against further cuts and reforms