Government grants to lure international research funding

By SIMON COLLINS, science reporter

A new scheme to lure international organisations to co-fund research in New Zealand is set to be unveiled by the Government today.

The scheme will be funded in next week's Budget with $3 million in 2004-05, rising to $4 million in 2005-06 and $5 million a year after that.

Ironically, it is being announced less than a week after the world's biggest pharmaceutical company, Pfizer, axed its $4-million-a-year contract with the Auckland Cancer Research Centre in protest at the drug-buying agency Pharmac slashing the price it pays for Pfizer's top-selling medicine, the cholesterol-lowering drug Lipitor.

The new International Investment Opportunities Fund is intended to attract precisely such contracts by offering matching funding from New Zealand taxpayers to any local research institute, university or company that has a chance of a research contract with an overseas funder.

Science Minister Pete Hodgson said the fund would be flexible enough to respond quickly to opportunities, rather than working on annual deadlines for applications like other science funding.

"Scientists can use it where foreign Governments or institutions such as the Wellcome Foundation or the European Union might put up money, but it has to be taken up before the next round of local funding," he said.


The Government's main science funding agency, the Foundation for Research, Science and Technology, recommended last year that the new fund should be allocated $4 million in 2004-05, $8 million in 2005-06 and $12 million a year after that.

It also recommended a "World Class People" scheme with $4 million in 2004-05 and $8 million a year after that to recruit top New Zealand expatriate and other scientists to work in this country, providing initial capital to set up their laboratories until they can get support through standard funding schemes.

A biotechnology taskforce proposed that scheme last year, suggesting the Government and the industry work together to attract five key biotechnologists and biotech entrepreneurs every year.

Mr Hodgson said he advocated both schemes in the Budget process, but only the investment co-funding scheme was approved this year.

He said the Government had no plans to copy Australia and Canada, which both offer special subsidies or tax breaks to attract pharmaceutical research to compensate big drug companies for "reference-pricing" of their drugs - paying only the price of the cheapest drugs in each group, which in the case of cholesterol-lowering drugs is a drug where the patent has expired.

In effect, reference-pricing means that New Zealanders get drugs at manufacturing cost without contributing to research and testing.

"I would have thought that the people who run the health system would say, 'Let's try and get the best bang for the taxpayer's buck'," Mr Hodgson said.

"The people running economic development would say, 'Pharmaceutical companies have a role to play in the emerging biotech industry, and we have to run a policy that is going to be attractive to them'.

"You do those two things separately. You wouldn't link them."