Government spending on all types of prescription drugs (patented and non-patented) is increasing faster than any other component of health spending. And new or patented medicines tend to be more expensive compared to older drugs and other health treatments. This study examines all of the ways in which patented drugs might contribute to health-care costs.Research has shown that government expenditure on health in Canada is growing at an unsustainable pace. At the same time, government spending on all types of prescription drugs (patented and non-patented) is increasing faster than any other component of health spending. And new or patented medicines tend to be more expensive compared to older drugs and other health treatments. These observations frequently lead to the claim that patented medicines in particular are the primary cause of unsustainable health-care costs in Canada. In order to evaluate the validity of this claim, this study examines all of the ways in which patented drugs might contribute to health-care costs. The evidence suggests that neither patented drugs in particular nor pharmaceuticals in general can be blamed for the failures of government health insurance to remain financially sustainable.