In a 620-bed acute care teaching hospital, the hospital pharmacists are therapeutic specialists and have become integrated members of the health care team working on the nursing units. To determine the extent of cost avoidance and savings achieved by pharmacist monitoring of drug prescribing and administration, a six month study was undertaken in one of five pharmacy satellites. The pharmacists documented each clinical intervention on form designed for this investigation. Cost reductions or cost avoidance accrued due to the pharmacists' clinical interventions, such as monitoring overuse of drugs, unnecessarily prolonged hospitalization, correction of medication errors, and reassessment of prescriptions. This study suggests that pharmacists clinical expertise in drug use can benefit patients, physicians, nurses, and the hospital administrators who are confronted with ever increasing costs.