OBJECTIVES: Potentially inappropriate medication (PIM) in the elderly increases the risk of adverse drug reactions (ADR) and consequently has an impact on both patients’ quality of life and healthcare costs. In 2010, the PRISCUS list was published in Germany to identify PIM and to propose adequate substitution medication. The objective of the study was to assess both the prevalence and reimbursement of PIM in a German practice network applying the PRISCUS list. Moreover, costs for proposed surrogates were evaluated. METHODS: Patients fulfilling the following criteria were included: (1) insured at the local health fund AOK Bavaria, (2) treated by physicians of the practice network, and (3) aged ≥65. Data was provided from AOK Bavaria and contained 214,177 anonymized prescriptions between Q1/2009 and Q4/2011. Information included age, gender, date of prescription and ATC-Code. Since no information on dosage or package size was given, medication and its application duration were differentiated in acute and long-term medication by expert opinion. Costs were calculated by applying the concept of DDD. RESULTS: On average, 16.0% of the patients received at least one PIM prescription each quarter. 13,736 prescriptions were classified as PIM (6.4%; 68.7% to women). Out of these, psycholeptics such as Zopiclon (11.8%) and calcium antagonists such as Nifedipin (7.9%) were prescribed most frequently. Total costs of PIM-prescriptions were calculated to be 446,430€ (mean 40,585€ per quarter; min. 32,869€; max. 50,024€). When assuming prescription of surrogates, costs varied between 267,990€ and 935,826€. CONCLUSIONS: PIM represents both a medical and economic burden to the German healthcare system. From an economic perspective, substitution of PIM may result in cost disadvantages. Thus, there is little economic incentive for health insurances to further promote the substitution of PIM. Future research should take a broader perspective and include costs of PIM-related ADR to fully evaluate the economic impact of PIM in the elderly.