Increased spending on prescription drugs is often blamed for rising health insurance premiums, yet according to national health accounts projections by the Centers for Medicare and Medicaid Services, only 15 cents of every private health insurance dollar will be spent on prescription drugs in 2003. Coincidentally, in 2003, it is projected that the net cost of insurance, which is the difference between premiums and benefits, is also 15 cents of every private health insurance dollar.

New medicines have played a key role in reducing hospitalization rates and shifting health costs from in-patient to outpatient services. Studies show that new medicines are cost-effective and that increased spending on new medicines can reduce overall healthcare costs.