Costs for managed care organizations to process prior authorizations (PAs) for nonformulary medications have been estimated to be dollars 20-25 per request. Costs for physicians to process these requests have not been studied extensively. A data collection tool was developed and used by physicians and nurses to document time spent on processing PAs. Data were collected over 8 weeks and 117 requests were processed. Nurses averaged 5.6 +/- 6.5 calls per day per nurse and spent an average of 17 minutes per call. Physicians averaged 1.9 +/- 1.2 calls per day averaging 5.8 +/- 5.0 minutes per call. During the study period nurses spent >40 hours on 231 calls and physicians spent >8 hours on 154 calls. Based on the hourly rate of the nurses and physicians, the total cost in this specialty practice was dollars 17.77 per PA. Of the 117 PA requests, 98.7% were approved the first time they were processed. There are substantial costs with processing PAs for nonformulary drugs on the physician office side of managed care as well as on the insurance side of the process. Specialty physicians should have a different process for obtaining notformulary medications because almost 100% of their requests are granted.