The generic substitution rate by hospital pharmacists in three university affiliated outpatient hospitals in Bangkok, Thailand, was examined and the cost savings from substitution were determined using a retrospective audit of prescription forms.A total of 3,750 prescriptions was audited (1,250 from each hospital). Of the prescriptions studied, 51.2 per cent were written for generic products, 14.5 per cent were written for brand name products obtainable from a single source and 34.2 per cent were written for brand name products obtainable from multiple sources. For multiple source brand name prescriptions, pharmacists substituted generic products 15 per cent of the time. The mean price for the multiple source brand name product was US$5.2 and the mean price of the generic substitute was $2.5, an average saving of $2.7.The substitution rate for regular (paying) patients was 9 per cent, while the substitution rate for government assistance (poor) patients was 40 per cent. Substitution rates for the three individual hospitals were 16 per cent, 21 per cent and 9 per cent.The authors conclude that when substitution occurs savings are substantial, but that there is potential for additional substitutions to be made.