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The financial impact of pharmacist participation on a medical team in a tertiary-care teaching hospital was studied prospectively. Two medical teams, one with and one without a pharmacist, operated simultaneously for 11 months. Physicians and a pharmacist on the teams rotated monthly during the first five months of the study. Subsequently, the hospital administrator, who was unaware that the controlled study was under way, permanently assigned an attending physician to the team that did ot have a pharmacist. After patients' discharge, pharmacy costs, pharmacy charges, hospital charges, and length of stay (LOS) were compared for the two teams. Data analysis was separated into four phases: phase 1, during which attending physicians rotated monthly; phase 2, with a permanent attending physician; phase 3, which encompassed the entire 11 months; and phase 4, which encompassed the 11-month period but omitted patients whose LOS exceeded 30 days. Data were analyzed for a total of 619 patients on the two teams. In phase 1, the team with a pharmacist had significantly lower per-patient pharmacy costs, pharmacy charges, hospital charges, and LOS. In phase 2, no significant differences were found between the teams. In phase 3, the only significant difference was that the team with a pharmacist had lower pharmacy costs and pharmacy charges. In phase 4, the team that included a pharmacist had significantly lower pharmacy costs ($105 difference), pharmacy charges ($368 difference), hospital charges ($2065 difference), and LOS (1.3-day difference). Participation of pharmacists on the medical team can significantly reduce pharmacy costs and charges, hospital charges, and LOS.