Cost justification for the establishment and continued operation of an operating room satellite pharmacy is described. Establishment of an operating room satellite pharmacy can be justified based on the need to recover lost revenue, regulate controlled substances, monitor inventory, and enhance communication between operating room personnel and the department of pharmacy. At a 510-bed community hospital, an internal audit performed before the satellite pharmacy was opened revealed an average loss of $14.53 in drug charges per surgical procedure; 16 months after the pharmacy opened, changes in the way drugs are distributed to the departments of surgery and anesthesia has resulted in a decrease in this loss to $9.61, or a 34% improvement. To regulate controlled substances, the pharmacy attaches a drug-use log to each dispensing kit, which has resulted in 98% agreement between recorded administration of controlled substances and actual amounts signed out and ultimately returned. Recommendations made by the department of pharmacy regarding the use of high-cost drugs during surgery has resulted in an annual savings of more than $100,000, and improvements in drug packaging reduced, and in some cases eliminated, wastage. Direct contact between operating room personnel and pharmacists has fostered discussions regarding cost-effective application of pharmacotherapy, and the potential for cost savings is substantial. Although the remaining loss of $9.61 per case must still be addressed, considerable progress has been made in a relatively short period of time. The satellite pharmacy in the operating room has led to increased revenue recovery, improved regulation of controlled substances and monitoring of drug inventory, and better communication among the involved personnel.