ABSTRACT: In Japan, medical costs are increasing annually, and the increase in national medical costs, particularly in the direct cost of managing adverse drug events, is high. An in-depth understanding of these costs is important for their reduction. This study aimed to calculate the direct cost of managing adverse drug events in all ages, including older adults, and that of avoidable adverse drug events in older adults. We conducted a retrospective survey on patients aged 1 year or older who visited Gifu Municipal Hospital in Japan. We investigated and calculated the direct cost of managing adverse drug events and that of avoidable adverse drug events based on the Beers Criteria Japanese version (BCJ) and "Guidelines for medical treatment and its safety in the elderly 2015" (GMTSE-2015) in inpatients and outpatients. Among 6,504 patients, 11.1% visited the hospital or were hospitalized due to adverse drug events. The direct costs per patient with adverse drug events were 21,281 and 22,590 yen (166 and 176 euros as on September 13, 2021) for outpatients, and 853,175 and 874,582 yen (6,648 and 6,815 euros) for inpatients of all ages and older adults, respectively. The direct costs of avoidable adverse drug events per patient using drugs listed in the BCJ and GMTSE-2015 for older adults were 3,212 and 3,341 yen (25 and 26 euros) for outpatients, and 55,548 and 80,246 yen (433 and 625 euros) for inpatients, respectively. In sum, considering both inpatients and outpatients in the whole country, the direct costs of managing adverse drug events were 804.53 billion and 597.19 billion yen (6,269 million and 4,653 million euros) per year for all ages and older ages, respectively. The direct cost of avoidable adverse drug events in older adults was 83.43-258.44 billion yen (650-2,013 million euros) per year. We found that, in Japan, high medical costs are often caused by managing adverse drug events, and that the costs of avoidable adverse drug events in older adults based on the BCJ and GMTSE-2015 account for a substantial proportion of the medical cost. Therefore, by using the BCJ and GMTSE-2015, avoiding adverse drug events and reducing medical costs may be possible.