BACKGROUND: Generic substitution may not always save health care costs for antiepileptic drugs (AED). OBJECTIVE: (1) To examine the economic impacts of generic substitution of lamotrigine in Canada; and (2) to convert observed Canadian costs to a United States (US) setting. METHODS: Health claims from Québec's health plan (RAMQ) between 08/2002 and 07/2006 were analyzed. Patients with > or = 1 epilepsy claim and treated with branded lamotrigine (Lamictal) before generic entry were selected. Health care costs ($/person-year) were compared during periods of branded and generic use of lamotrigine. Two cost-conversion methods were employed; one using purchasing power parities, US/Canada service use ratios, and exchange rate, and another employing Canadian health care utilization and US unit costs. RESULTS: 671 patients were observed during 1650.9 and 291.2 person-years of branded and generic use of lamotrigine, respectively. The generic-use period was associated with an increase in overall costs (2006 constant Canadian dollars) relative to brand use (C$7902 vs. C$6419/person-year; cost ratio (CR) = 1.22; p = 0.05), despite the lower cost of generic lamotrigine. Non-lamotrigine costs were 33% higher in the generic period (p = 0.013). Both conversion methods yielded increases in total projected health care costs excluding lamotrigine (2006 constant US dollars) during the generic period (Method 1: cost difference: US$1758/person-year, CR = 1.33, p = 0.01); Method 2: cost difference: US$2516, CR = 1.39, p = 0.004). LIMITATIONS: Study limitations pertain to treatment differences, indicators used for conversion and possible claim inaccuracies. CONCLUSION: Use of generic lamotrigine in Canada was significantly associated with increased overall medical costs compared to brand use. Projected overall US health care costs would likely increase as well.