OBJECTIVES: Proton pump inhibitors (PPIs) are potent gastric acid suppressants. They have been widely prescribed for various acid-related disorders. In 2000/01, omeprazole and lansoprazole were PPIs available in the Pamela Youde Nethersole Eastern Hospital (PYNEH) and the consumption of PPIs accounted for HK$3.4 millions (US$1=HK$7.8), which was 3% of the total drug expenditure of the hospital. A drug utilization evaluation of PPIs was carried out to estimate the impact of unlicensed uses of PPIs on the overall drug expenditure in this local public hospital. METHOD: A retrospective study was performed on patients admitted to the PYNEH. The study cohort consisted of all inpatients (excluding intensive care patients) and outpatients who were aged 18-year old or above and were dispensed PPIs for seven days or more (except for those on intravenous route PPIs) between 1 January and 30 June 2001. Two hundred and four patient medical charts were randomly selected from the cohort. Clinical and laboratory data were collected from the medical records. RESULTS: After reviewing 204 patient records, 185 (90.7%) prescriptions of PPIs were complied with the licensed indications. Of the 19 prescriptions of unlicensed uses, 9 (47.4%) and 4 (21.1%) prescriptions were for treatment of gastritis and/or duodenitis and for empirical treatment of epigastric pain respectively. The drug cost-avoidance of unlicensed uses of PPI was HK$19,477.6. Data collected during this 6-month period were extrapolated to one year, the projected annual possible cost-avoidance of unlicensed uses would be approximately HK$400,000 which accounts for 0.35% of the total drug expenditure. CONCLUSION: This study concluded that the compliance rate of licensed indications of PPIs was high but the unlicensed uses still resulted in a significant drug cost-avoidance. Educational programs may be designed to reduce the incidence of unlicensed uses and thus to reduce the associated costs in the future.