Atypical antipsychotic medications vary in cost with limited evidence of differences in effectiveness. Administrative prescription review has been proposed as a way of encouraging use of less expensive medication when there is no specific clinical justification for using more expensive medication. This study examined data from a national GAO survey of 876 veterans affairs (VA) psychiatrists, and national administrative data on the proportion of veterans actually receiving atypical antipsychotic medications. The proportion of psychiatrists in each region reporting that they did not feel free to prescribe expensive drugs when indicated was negatively correlated with the proportion of patients who filled prescriptions for clozapine, the most expensive atypical. The proportion reporting review procedures for prescribing olanzapine was significantly and negatively correlated with the proportion of veterans actually receiving prescriptions for olanzapine and, positively associated with the proportion prescribed risperidone. Nondirective administrative review procedures in VA are significantly associated with actual prescribing patterns and may generate modest cost savings in the prescription of atypical antipsychotic medication.