OBJECTIVES: The objective of this study was too characterize geriatric antidepressant users' rate of claims documented treatment-related side-effects, and their impact on prescription-adherence and costs. METHODS: Data were from the MarketScan® Medicare Database, a de-identified health care database for retirees with employer-sponsored Medicare supplemental insurance. Subjects age >65years who were new antidepressant users with a depression diagnosis were identified between July 1, 2001-December 31, 2006. Twelve commonly reported antidepressant side-effects were identified through ICD-9-CM diagnoses. Multinomial logistic regression was used to evaluate the effect of side-effects on adherence. RESULTS: A total of 39,512 treatment-naïve antidepressants users were selected and compared to 1,144,481 non-users. Antidepressant users were slighter older than non-users (76.5 vs. 75.6years, p<0.001), more were female (63.2% vs. 52.5, p<0.001), and had higher prevalence of psychiatric, and non-psychiatric conditions. Approximately 5.5% (n=2214) of SSRI/SNI users had diagnoses indicating side-effects within the first 30-days of treatment. Approximately 18% of new antidepressant users switched antidepressants, 23% discontinued, and 59% refilled after their first prescription fill. The presence of a documented side-effect was associated with a 28.5% (4.7 percentage points) increase in the probability of switching and a 16.8% increase in the rate of discontinuation (3.7 percentage points) (p <0.01). The average cost of medical and pharmaceutical treatment for antidepressant side effects over the first month of treatment was approximately $336 (SD=$167). The cost of treating side-effects added $20.15 (1.8%) to the total health care costs of the all antidepressant users during their first month after antidepressant initiation. CONCLUSIONS: Antidepressant therapy in the elderly is associated with a significant level of side effects, which in turn is associated with lower adherence, and greater cost of depression care. There is a need for an antidepressant with improved tolerability profile for the elderly to minimize non-adherence and economic burden to payers.