The fiscal "cat" of healthcare spending - drug expenditures - is out of the bag: drug costs are now the fastest rising component of healthcare expenditures in Canada. Laupacis, Anderson and O'Brien describe the current process of listing drugs on the provincial drug formulary in Ontario, identify factors that may contribute to the rapid growth in drug expenditures, and make a number of recommendations for controlling drug expenditures, including (1) improving the evidence on cost-effectiveness; (2) disseminating the evidence to prescribers; (3) re-evaluating the evidence; and (4) increasing the transparency about the acquisition costs of drugs. These are recommendations that, if implemented, would theoretically help decision-makers make more rational decisions about which drugs to list on provincial formularies. The question of how to implement the recommendations remains to be elucidated, as does an evaluation of the trade-offs between costs and benefits of obtaining better information on cost-effectiveness.