Health & medical research in Australia

2010-2011 Funding health & medical research in Australia


Summary:

$5.5 billion was spent on health and medical research (H&MR) in Australia in 2010/11

18% of all Australian Research and Development (R&D) is spent on H&MR (Total R&D was $30.83 billion)

4% of all spending on health is spent on H&MR (Total health expenditure in 2010/11 including H&MR was $130 billion)

0.39% of GDP was spent on H&MR (Australian GDP was $1,399 billion)

Half of all Australian H&MR is undertaken in the higher education sector

H&MR accounts for one third of all R&D expenditure in higher education institutions

A quarter of all H&MR expenditure is in the private sector (mostly on pharmaceutical R&D)


Expenditure by sector

The following table is an estimate of where H&MR expenditure was spent in 2010/11.

Government

Higher Education

Private Non-profit

Business

Total

$million

609 2,660 840 1,220 5,329
% 11 50 16 23 100

The presentation of data in the above table is complicated by the fact that detailed data for the different sectors is collected by ABS for different periods, but ABS has provided some high level modeling of expenditure by each sector for 2010-11, which has been combined with more detailed data for earlier years to produce the above estimates.

The $223 million difference in the total between the estimates of expenditure by funding source and the sectors in which it was spent, reflects different estimations by the AIHW and ABS for government spending, and possible difference in adjusting estimates of expenditure for 2010-11. (The AIHW methodology includes expenditure by governments in the health system that is not captured by ABS.)

Higher Education sector

Approximately one third (32.4%) of all research expenditure by the higher education sector is on health and medical research. For 2010-11, the estimate is $2.66 billion. 91% of all funds expended by higher education institutions is sourced from Commonwealth Government or the institutions’ own funds.

Source: ABS 8111.0, Research and Experimental Development, Higher Education Organisations, Australia 2010, Table 9 SEO Health ($2,657,700,000) divided by total expenditure ($8,202,999,000); Table 4, by source of funds.



Business sector

Expenditure on health and medical research represents approximately 7% of total R&D spending by business. While specific data for H&MR is not available, in 2010-11 97% of all funds expended by businesses on research was sourced from their own or another business.

Source: 8104DO008_2011 Research and Experimental Development, Businesses, Australia, 2010-11 Table 3 Estimate of Business H&MR (Human Pharmaceutical Products and Health- $1,219,735,000) divided by total expenditure ($17,879.661,000); ABS, Research and Experimental Development, Business, 8104.0 2010-11, Table 1.


Private Non Profit sector

The Private Non Profit Sector spent $743 million on R&D in 2008/09, of which $685 million (92.1%) was spent on the SEO of Health. It seems likely that the majority of this expenditure was by Medical Research Institutes that are independent of universities and other independent not for profit entities such as Cooperative Research Centres. Assuming the same proportion of 92.1%, and using the ABS estimate of 2010-11 Private Non Profit expenditure of $914 million, the private non-profit sector’s expenditure in 2010-11 on H&MR was $841 million.

Sources: ABS Research and Experimental Development, Government and Private Non- profit organisations, Australia 8109.0 2008-09 Table 2.3, ABS Research and Experimental Development, Business, 8104.0 2010-11, Appendix, page 38.


Sources of funding for health and medical research

The table below reflects expenditure on H&MR by the source of funding- i.e. who pays for it, as distinct from who actually does it.

Australian Government

States & Territories

Private Non-profit

Business

Total

$million

3,297

776

259

1,220

5,552

% of total

59

14

5

22 100

Source: for all except business is AIHW, Health Expenditure Australia, 2010-11 p.76 Business sourced from ABS, 8104.0 R&D Businesses, Australia, 2010-11 Table 3, sum of Health and Human Pharmaceutical Products.

The figure of $1,220 million for business includes all expenditure by business even though 2% of this expenditure is actually sourced from the Australian Government but has not been included in the Australian Government spending.