--- - |2+ Background Naturalistic and small randomized trials have suggested that pharmacogenetic testing may improve treatment outcomes in depression, but its cost‐effectiveness is not known. There is growing enthusiasm for personalized medicine, relying on genetic variation as a contributor to heterogeneity of treatment effects. We sought to examine the relationship between a commercial pharmacogenetic test for psychotropic medications and 6‐month cost of care and utilization in a large commercial health plan. Methods We performed a propensity‐score matched case‐control analysis of longitudinal health claims data from a large US insurer. Individuals with a mood or anxiety disorder diagnosis (N = 817) who received genetic testing for pharmacokinetic and pharmacodynamic variation were matched to 2,745 individuals who did not receive such testing. Outcomes included number of outpatient visits, inpatient hospitalizations, emergency room visits, and prescriptions, as well as associated costs over 6 months. Results On average, individuals who underwent testing experienced 40% fewer all‐cause emergency room visits (mean difference 0.13 visits; P < 0.0001) and 58% fewer inpatient all‐cause hospitalizations (mean difference 0.10 visits; P < 0.0001) than individuals in the control group. The two groups did not differ significantly in number of psychotropic medications prescribed or mood‐disorder related hospitalizations. Overall 6‐month costs were estimated to be $1,948 (SE 611) lower in the tested group. Conclusions Pharmacogenetic testing represents a promising strategy to reduce costs and utilization among patients with mood and anxiety disorders. - Depression and Anxiety, Volume 35, Issue 10, Page 946-952, October 2018.