Money to flow from research fund

The federal government will begin distributing money from its Medical Research Future Fund with $400 million going to researchers in the next four years.

The federal government will begin distributing money from its Medical Research Future Fund. (AAP)

The coalition controversially set up the fund in last year's budget with revenue coming from the abandoned GP co-payment and other health savings.

Treasurer Joe Hockey on Tuesday said the fund would make a first distribution of $10 million in 2015-2016 .

"Over the next four years the government will distribute $400 million from the fund, to help our best and brightest medical researchers develop the drugs and cures for the future," he told parliament.

Health department efficiencies in the latest budget will provide the fund with more than a billion dollars.

A further $252.2 million, saved from price changes to subsidised medicines, and $144.6 million from changes to the Medicare Benefits Schedule will also be funnelled into the research fund.