OBJECTIVE - Utilization and costs of prescription drugs were investigated in diabetic and nondiabetic patients. RESEARCH DESIGN AND METHODS - The study was carried out in Tayside, Scotland, U.K. A validated population-based diabetes register was used to identify patients with type 1 and type 2 diabetes, and a database of all prescriptions dispensed in the community was used to investigate drug utilization in 1995. RESULTS - In a population of 406,526, there were 974 (0.2%) with type 1 diabetes and 6,869 (1.7%) with type 2 diabetes. The mean dispensed prescribing rates for all drugs (excluding antidiabetic medication)were higher across all age-groups for diabetic patients. After adjusting for age, patients with type 1 diabetes were 2.07 times (95% CI 2.03-2.11) more likely and patients with type 2 diabetes were 1.70 times (1.69-1.71) more likely to be dispensed a drug item than people without diabetes. This likelihood was increased in every drug category, even those not directly related to diabetes, and the proportion and cost of drug items dispensed to diabetic patients was therefore higher than expected given the prevalence of diabetes. Upon projecting these results to the U.K. population, it was discovered that nearly 8% of the U.K. drug budget (£350 million) is accounted for by patients with diabetes (90% of that by patients with type 2 diabetes). CONCLUSIONS - This study highlights the increased usage and cost of prescription drugs in diabetes, with type 2 diabetes constituting a particular burden. It was discovered that 1.4% of drug usage in the entire population can be accounted for by the increased prescribing rate of diabetic patients compared with that of nondiabetic patients.