The steady growth of pharmaceutical expenditures is a major concern for health policy makers and health care managers in Malaysia. Our study examined the factors affecting the total inpatient pharmacy cost (TINPC) at the Universiti Kebangsaan Malaysia Medical Centre (UKMMC). In this retrospective study, we used 2011 administration electronic prescriptions records and casemix databases at UKMMC to examine the impact of sociodemographic, diagnostic, and drug variables on the TINPC. Bivariate and multivariate analyses of the factors associated with TINPC were conducted. The mean inpatient pharmacy cost per patient was USD 102.07 (SD = 24.76). In the multivariate analysis, length of stay (LOS; B = 0.349, P < .0005) and severity level III (B = 0.253, P < .0005) were the primary factors affecting the TINPC. For each day increase in the LOS and each increase of a case of severity level III, there was an increase of approximately USD 11.97 and USD 171.53 in the TINPC per year, respectively. Moreover, the number of prescribed items of drugs and supplies was positively associated with the TINPC (B = 0.081, P < .0005). Gender appears to have affected the TINPC; male patients seem to be associated with a higher TINPC than females (mean = 139.55, 95% confidence interval [CI]: 112.97-166.13, P < .001). Surgical procedures were associated with higher cost than medical cases (mean = 87.93, 95% CI: 61.00-114.85, P < .001). Malay (MYR 242.02, SD = 65.37) and Chinese (MYR 214.66, SD = 27.99) ethnicities contributed to a lower TINPC compared with Indian (MYR 613.93, SD = 98.41) and other ethnicities (MYR 578.47, SD = 144.51). A longer hospitalization period accompanied by major complications and comorbidities had the greatest influence on the TINPC.