The Report of the Pharmaceutical Inquiry of Ontario documented dramatic increases in the cost of the Ontario Drug Benefit (ODB) program. This article demonstrates that the rise in ODB costs for those 65 and over is due to two factors: more intensive prescribing--physicians prescribing to the elderly more often and writing more prescriptions each time they see an elderly patient--and physicians writing prescriptions for more expensive drugs. Neither of these two changes in prescribing behavior has resulted in any demonstrable improvement in the health of the elderly. Efforts to control costs through some form of copayment or by eliminating some drugs from the ODB formulary should not be undertaken since they probably will result in a reduction in the use of medically necessary drugs. Ultimately, drug costs will only be controlled by improving the appropriateness of physicians' prescribing.