The cost to an institution of medication-related problems (MRPs) was studied. A retrospective chart review covering the period from July 1992 through June 1994 was performed for patients at a university-affiliated medical center hospital who were known to have had clinical consequences from an adverse drug reaction (ADR) or medication error. All interventions resulting directly from the problem were recorded. A detailed list of patient charges was reviewed for each patient, and specific charges for the MRP-associated interventions were tabulated. The clinical outcomes used to evaluate intervention costs were categorized as extra laboratory tests, noninvasive procedures, additional treatments, invasive monitoring or procedures, increased length of stay, and intensive care. The cost of each intervention was calculated by applying the cost-to-charge ratio used in the institution's patient-charge-based accounting system. A total of 109 patient charts were reviewed. A total of 349 clinical outcomes associated with MRPs, or an average of 3 outcomes per patient, were detected. The mean +/- S.E. cost of MRP-associated clinical outcomes to the institution ranged from $95 +/- 11 for additional laboratory tests to $2640 +/- 596 for intensive care. The next most costly outcomes were increased length of stay and invasive monitoring or procedures. For the 1911 MRPs reported in 1994, the estimated total cost was almost $1.5 million. A review of the medical records of patients for whom an ADR or medication error had been recorded showed a high cost of these events to the institution, with the cost varying with clinical outcome, and a correspondingly strong opportunity for pharmacists to intervene to save money and improve the quality of care.