This paper uses claims data from the prescription drug program for the elderly in British Columbia to describe temporal trends in prescription drug use and the determinants of those trends. Drug expenditures under the program increased by 317% from $21.6 million in 1981-82 to $90 million in 1988-89. Of the $68.4 million-dollar increase in overall expenditures, 34% was due to new drugs, 24% to increased age-specific utilization rates of old drugs, 21% to increased prices of old drugs, and 14% to the increased size of the elderly population. The analysis indicates that 61.5% of new drug expenditures can be attributed to four specific drugs and that the relative importance of price and utilization rates in determining changes in expenditures on old drugs varies by drug category. The paper provides a framework for understanding and predicting expenditures for drug benefit plans.