What would happen if the government cut their investment in medical research?

Posted on April 26, 2011 by

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Cancer Research UK commissioned a really interesting report from the Office of Health Economics exploring the rather topical question of, if the government cut public spending on medical research, what impact would this have on charity funding?

They looked at how public funding (through the Department of Health and research councils) interacts with charity and private funding for research – and their results suggest what you might expect, a cut to public funding will probably have a negative impact on the ability of other funders to fund research and may result in permanent damage to UK medical research. But they also pick out lots of interesting stuff, identifying the benefits that we all get from collaborating to fund research, and picking out where we could do with doing a bit more research to underpin future funding decisions and make sure they will support growth in medical research.

Background

We’ve looked before at the value of medical research – a 2008 OHE/RAND report Medical Research: What’s it worth? commissioned by the Wellcome Trust and Academy of Medical Sciences found that medical research brings huge economic benefits to the UK:

for each pound invested by the taxpayer or charity donor into cardiovascular disease and mental health research, a stream of benefits is produced equivalent to earning 39 pence and 37 pence respectively each year ‘in perpetuity’

And there has also been some research into how charitable funding for research can attract other private funding

A £1 increase in UK government or charity spending on medical research could lead to an increase in private research spending from the pharmaceutical industry of between £2.20 and £5.10.

But, although we recognise that the UK has a really diverse funding environment with lots of different funders (check out page 11 of this Nesta report looking at UK biomedical collaboration to see a map of all the different funders involved) and we think that’s a good thing, there really hadn’t been much done to look at the benefits they get from co-existing and collaborating like this – and conversely the damage that could be done if one of these funders disappeared. This was something the current economic climate has got us thinking about… and Cancer Research UK decided to ask the pros to take a look…

What did they find out?

Exploring the Interdependency between public and charitable medical research

The researchers reviewed existing literature, conducted interviews and held a workshop.

The exec summary is brilliant. But if you are planning to take a proper look…

Section 2 gives a really good overview of who is funding, what they’re funding, how they’re funding and who is paying for what. If you want background on the process of medical research, how research in universities and the NHS is funded and how collaborations work this is worth a look, it pulls together lots of the facts. It also summarises some of the benefits everybody gets from collaborating to fund research, and a few challenges it brings:

  • Benefits
    • share costs and the risks of the research they are investing in not delivering
    • share experience and expertise – public sector expertise includes knowledge of the NHS and the know-how to get new discoveries into clinical practice. Medical research charities bring expertise in specific disease areas they are focused on and links to networks of experts, patients and supporters.
    • together multiple funders can create a stable, strong, competitive research environment which can attract skilled researchers/create a better research environment, improving research quality
    • achieve more with your money by complimenting each other
  • Challenges
    • increase in transaction costs
    • delays in co-ordinating activity across multiple organsiations

Section 3 focuses on what could happen if public funding for medical research is cut – under the definitions this report is using that’s cuts to MRC or government health department funding.

  • Impact on UK economic growth – US data suggests public spending on medical research stimulates additional private R&D investment. So cuts in public investment in research in the UK are likely to make us less attractive to private investors, meaning the UK will make less money.
  • impact on the fundraising ability of charities – the report explores whether a cut to public funding might reduce how much we donate to charities to fund research or whether it’ll encourage us to give more to make up the gap. The evidence is limited but it concludes that government funding good infrastructure and supporting high quality research helps charities to raise money to fund high quality research alongside this and conversely, government under-investment is likely to make it harder for charities to raise money to fund research, their money will not be able to go so far so they’ll be less incentive for people to give etc.
  • economies of scale – basically, if you’re big and producing lots, the cost of producing a bit more decreases. So, if government cuts investment and UK research becomes smaller, the logic goes that it’ll cost more to achieve the same for the remaining funders and they might even decide to stop funding here. The UK has a strong medical research sector so it’s currently quite economically attractive to fund here. So the report explores whether it would do UK research serious damage if the government reduced support for it, and whether it might be actually be an advantage for government to continue or increase it’s support. The conclusion is unsurprisingly yes, cuts to government funding would damage UK infrastructure, our capacity to do research and the number of skilled people to do it, and ultimately research might move elsewhere.
  • If this is the case, might charities step in and fill the gap in infrastructure funding?  This is a tricky one for charities as, although they have raised money to fight a particular disease, research doesn’t happen in a vacuum. The infrastructure is currently largely supported by public funding. Charities need the infrastructure to fund research in but they can’t fund all the infrastructure themselves – they didn’t get donations from the public to pay for universities to keep running etc, they got them to fund research into specific conditions. So charities are unlikely to step in and fund shortfalls in infrastructure funding, they may look to fund in specific institutions or possibly even move funding abroad. Whatever, without that collaborative funding, they are likely to be able to achieve less with the money they have to invest.
  • if there was less research happening here, would UK patients miss out on high quality care? The idea that healthcare providers being involved in research leads to better outcomes for patients was actually referenced in the health white paper (page 13 “…those institutions with strong participation in clinical trials tend to have better outcomes.”) This report concludes there is some evidence suggesting this but it isn’t strong enough to say for sure whether patients might suffer if less research were to happen in UK hospitals etc. But it does mention that there is some research going on at the moment in this area and that we could do with doing more to find out for sure what impact this has.
  • the government will get less say in what research is being done . If they are not funding the research, they won’t be able shape the agenda to make sure the research being done fits with and can underpin UK public health priorities..

And in section 4 the report concludes:

The public sector plays a big role in sustaining infrastructure and other fixed costs of research (section 1). Collaboration brings a number of benefits, and a few challenges, to those involved (section 2). And cuts to public funding could cause damage to UK growth (section3)

They also identified where a bit more research would be valuable including:

  • More UK-specific data and number-crunching on how public funding effects charitable funding for research – encourages it or reduces it?
  • Look at case studies to further explore the impact of cuts to public funding
  • explore the benefits to NHS patients of conducting trials in NHS institutions – does it improve their outcomes?

What next?

This is all really interesting to see at the moment as the government is focused on building UK growth. Back in October 2010, when the government conducted a Spending Review, scientists made a strong case for continued public investment in science and research and science was spared some of the worst cuts (although many would argue that if the government is serious about growth, science shouldn’t just have been spared cuts but investment into science and research increased). In March 2011, the government published a plan for growth alongside the budget, identifying healthcare and life sciences as one of the UK’s promising growth areas.

So the more information we can get now about what supports growth in medical research, the better the evidence base we have on which to make the right decisions to support growth and maximise it. As this shows public funding is very important, the findings in this report will help us demonstrate to the government why we need them to keep investing in research and working with us.

Plus the more evidence we have for how our collaborative funding model involving public, charitable and private funders brings everyone benefits, the more we we can attract international investors to join in.

Cancer Research UK have blogged about this report Medical Research – A recipe for success. And there is also a guest blog on the Campaign for Science & Engineering’s site.

Posted in: Policy