Although prescription drug prices are lower in Canada than in the United States, trends indicate that there has nevertheless been a steep increase in expenditures on psychotropic drugs. Between 1992 and 1998, such expenditures increased by 216 percent; 61 percent of these expenditures were on antidepressants, 33 percent on antipsychotics, and less than 7 percent on anxiolytics. Most of the increase in costs in Canada is attributable to a greater use of newer agents and the higher prices of these agents. These trends are a reminder not only that the use of newer, more expensive psychotherapeutic agents has become a widely embraced part of care but also that lower drug prices do not necessarily insulate a health care system from rising expenditures. The authors' findings prompt the questions of whether the use of these newer agents meets practice guidelines and whether there are ways to control the increases in drug expenditures while ensuring high-quality care.