Alan Mackay-Sim, the 2017 Australian of the Year, told Tuesday's GE:Decoding Industry conference that too much university medical research languished for want of a different financing model.

Alan Mackay-Sim, the biomedical scientist who is 2017 Australian of the Year, has called for a new model of public-private partnership to fill the void left by major pharmaceutical companies withdrawing from neuroscience research.

Mr Mackay-Sim, a Griffith University researcher who led a team famed for proving the safety of using nasal cells to repair spinal cord damage, told a GE conference on Tuesday that all of the major pharmaceutical companies had closed or scaled back their neuroscience research units this decade because of the expense and risk in proving that drugs worked in the general population.

"Both Pfizer and Eli Lilly had treatments for Alzenheimer's Disease that failed at that finalstage of the [US Food & Drug Administration] approval process, and it had cost them each $US600million to getthere," he said.

With private enterprise less willing to solve complex neurological problems, Mr Mackay-Sim said it fell to "chumps like me" in the publicly-funded research sector.However, a fundamental mismatch between thebusiness model of universities and corporations had to be solved first.

"The problem is that for a university researcher today, the currency is to get your research published, that's how you get the next grant," he told the conference.

"But once it's published, it's no longer novel, it's not patentable and therefore private enterprise has no interest.Uni researchers are in it for the public good but unfortunately none of that good gets to the public without the commercial imperative."

Mr Mackay-Sim said universities could only afford to patent a fraction of the research they produced, and even then it too often languished for a lack of investors able to fund clinical trials. This happened to Mr Mackay-Sim's own 2001 patent for making stem cells from olfactory sheathing cells.

A new model was required which recognised the "value of future costs saved" in medical research and broadened the pool of potential financial backers, he told The Australian Financial Review on the sidelines of the GE conference.

"Our trial to prove that transplanting olfactory sheathing cells into the spinal cord was safe cost us $1 million, a second trial proving it works might costs us $20 million and the third trial to prove it works broadly might be $100 million or more - but we spend $2 billion a year in Australia caring for those with a spinal cord injury, so surely that's a good investment," Mr Mackay-Simsaid.

Insurance companies were a relatively untapped source of funding for medical research, he added, given their commercial interest in reducing the cost of medical care.

Patentable drugs had a hard enough time being commercialised, but it was even more difficult to fund trials for improved procedures.

"A friend of mine [University of WA Professor Sarah Dunlop] is trying to get up a clinical trial where people with spinal cord injuries are cooled as soon as the first responders get there, like what happens with heart attack patients," Mr Mackay-Sim said.

The slowing of the metabolism through cooling is thought to provide an opportunity for interventions that could increase the mobility of someone with a spinal cord injury.

"But it's a process, not a drug, it's not really patentable so it's proving a struggle to get funding despite this maybe meaning the difference between quadraplegiaand just having an arm immobilised."

The potential value of university-generated medical research couldbe recognised and supported by business earlier if a new kind of public-private partnership was supported and incentivised by government, spreading the risks and rewards, according to Mr Mackay-Sim.

"But it will take unis, government, investors, insurers, pharmaceutical companies and perhaps CSIRO coming together, to rethink this system where the patent and guarding all your IP is the model," he said.

Mr Mackay-Sim stressed he was "not a business guy", but said a benefit of being Australian of the Year was the access he was getting to people who could collaborate on a new funding model for medical research.

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Australian of the Year Alan Mackay-Sim calls for medical research funding change - The Australian Financial Review