The pharmacoeconomic implications of adverse effects caused by antipsychotic drugs during the treatment of schizophrenia are discussed. When new treatment options are considered by a health system, a comprehensive assessment is required that includes not only the cost of treating the disease but also the ancillary costs of treating adverse effects and comorbidities associated with treatment. Atypical antipsychotic drugs constitute a significant advance over conventional antipsychotics in terms of broader efficacy and lower rates of extrapyramidal symptoms and tardive dyskinesia. However, these agents appear to be associated with certain adverse medical conditions that can increase overall treatment costs. These adverse effects include serious weight gain, dyslipidemia, diabetes, and changes in cardiac conduction. The available data suggest that the risk of these events is not uniform among the drugs. A comprehensive evaluation of risk factors, outcomes, and costs should be include in economic evaluations of antipsychotic drugs so that realistic strategies for reducing costs and improving health can be identified.