Increased spending on prescription drugs can lead to reductions in other health costs.

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.

Health Spending Growth 1995-2001

Source: Canadian Institute for Health Information March 19,2002

British Columbia's restrictive reference drug plan may have modestly slowed growth in per capita drug spending when compared to a province like Quebec that has a much more open drug plan. But the modest savings in drug costs have been more than offset by higher increases in hospital and nursing home costs and higher overall health costs. Improving access to new medicines can improve both the quality and cost-effectiveness of health care.