OBJECTIVES: To measure the impact of medical innovation on the health and health care costs of obesity, using statins as a case study. METHODS: Life trajectories and medical costs of elderly Americans are forecasted using the Future Elderly Model (FEM) – an established dynamic microsimulation model of health of Americans aged over 50. The change in the health and health care costs of obesity due to the introduction and widespread use of statins are estimated by introducing a scenario in which statins have not been discovered, using well-recognized estimates of the health impact of statins. RESULTS: Simulations reveal that the life expectancy of 50-year-olds with a healthy BMI (18.5-<25) is 0.92 year longer than it would be in a world without statins. Among the obese population, the life expectancy gains due to statins are of 1.00 year for type 1 obesity (BMI 30-<35), 1.05 year for type 2 obesity (BMI 35-<40) and 1.07 year for type 3 obesity (BMI≥40). These life expectancy gains augment the present value of per capita lifetime health care costs by $15,000 for individuals with a healthy BMI, $18,000 for type 1 obesity, $19,100 for type 2 obesity and $19,800 for type 3 obesity. About 33% of these costs are shouldered by the Medicare program. CONCLUSIONS: While the widespread use of statins is beneficial for individuals of all weight types, its health impact is highest among the obese population. Additional health care costs from statin use are small relative to the value of life expectancy gains, and mostly paid for by individuals.