OBJECTIVES: To measure costs from complying with Medicaid preferred drug lists (PDLs) for primary care physicians and cardiologists. To quantify the potential costs of a hypothetical universal PDL for Medicare Part D as of January 2006. METHODS: During December 2005 and January 2006 we surveyed cardiologists and primary care physicians in 9 states about their experiences with Medicaid PDLs that covered outpatient prescriptions for statins and antihypertensives. We calculated the opportunity cost of time spent by physicians and their staff on requesting prior authorizations (PAs), appealing rejected PAs, discussing PDLs with others, tracking changes to PDLs, and receiving PDL-related training, as well as physicians' altruistic costs from suboptimal prescribing decisions. We used comprehensive prescription data from Wolters Kluwer Health (WKH) to generate each physician's annual prescription volume for statins and antihypertensives separately by PDL coverage status. We combined the survey data on PDL-related costs per physician with the WKH prescription volume data using a bootstrap simulation to calculate total costs and the average cost per physician. We calculated the potential costs of a hypothetical universal Medicare Part D PDL by approximating the number of new Part D prescriptions affected by PDLs and multiplying by the survey-based average variable cost per prescription. RESULTS: There were 986 survey respondents and 47,843 physicians with WKH data. For statins and hypertensives, PDL cost per prescription averaged $8.02 (95% CI: $7.25-$8.78)—$14.41 (95% CI: $13.29-$15.53) off-PDL and $6.59 (95% CI: $5.91-$7.28) on-PDL—leading to average Medicaid PDL costs per physician of $1110 (95% CI: $1061-$1161) annually. Similar restrictions for Medicare Part D across all therapeutic classes could have cost physicians $3.2 billion (95% CI: $2.88-$3.49 billion) in 2006. CONCLUSION: Medicaid PDLs for statins and antihypertensives have generated considerable costs for physicians. Physicians would incur substantial additional costs if Medicare adopted similarly-structured PDLs for Part D.