According to the Centers for Medicare and Medicaid Services, personal health care expenditures, from 2002 to 2007, are projected to grow by 41 per cent. Increased spending on physician and clinical services account for 25 per cent of that spending increase while hospital and nursing home services are responsible for an additional 43 per cent of that increase.

In contrast, spending on prescription drugs accounts for only 12 per cent of the increase in personal health care spending from 2002 to 2007.

Over the past two decades, new medicines have played a key role in improving health outcomes, and in reducing disability and hospitalization.

Despite the media and political attention that has been focused on increased drug utilization and drug spending growth, new prescription medicines are not the primary driver of increased health spending. In fact, they may help to contain health spending growth as America’s population ages.