Spending on prescription drugs attracts considerable media and political attention, yet in 2001 spending on drugs accounted for only 8 % of provincial health care spending. Spending on hospitals and other institutions and on physicians and other health professionals accounted for a combined total of 74% of provincial health spending.

A recent study conducted by Geisinger Health Plan, a Pennsylvania health management organization, clearly demonstrates the benefits of aggressively managing diabetes. The study compared outcomes from 6, 799 patients who were diagnosed with diabetes. Nearly half were enrolled in a disease management program while the remainder were not. The study retrospectively analyzed medical claim costs and compared data between the two groups on their relative use of hemoglobin testing, lipid testing, eye screening and kidney disease screening.

One of the great myths about pharmaceutical innovation is that new drugs that are incremental improvements on existing drug therapies, or so-called “me-too” drugs, contribute little to the advancement of the quality or cost-effectiveness of health care. The overwhelming evidence of the impacts of incremental improvements on existing drug therapies for the treatment of ulcers and reflux disease explodes the myth of “me-too” drugs. In Canada, in 1998 there was a reduction of nearly 250,000 hospital bed days for ulcers compared to 1988 and a reduction of nearly 42,000 surgical procedures for operations on the digestive system.

According to a survey of disease-management organizations, increased spending on prescription drugs can help contain total health costs. Researchers at Tufts Center for the Study of Drug Development surveyed leading disease-management organizations in the United States, which represent nearly 55% of the roughly 1.5 million people covered by disease management organizations. Tufts Center Director Kenneth Kaitin noted that: " the increased use of appropriate pharmaceutical therapies may help moderate or even reduce growth" in other components of health spending. Comparing provincial drug plans in Canada shows that restricting access to new medicines does not necessarily lead to more cost-effective health care and reinforces the findings of the Tufts study.