Many of the newer psychotropic medications have a pricing structure in which there are only small cost differences between pills of different strengths, affording an opportunity for cost saving by splitting pills. Twelve newer psychotropic medications were examined. Although savings varied for each drug, aggregate data indicated that splitting pills can produce an annual savings of up to $1.45 billion, which represents about 10 percent of the retail sales of these drugs. Such savings can benefit individuals, state Medicaid programs, community mental health centers, and managed care companies. The authors propose several strategies for encouraging the use of pill splitting.