Background: Low-value medications (Lvm) provide little or no benefit to patients, may be harmful, and waste healthcare resources and costs. Although evidence from the literature indicates that Lvm is highly prevalent in dementia, evidence about the financial consequences of Lvm in dementia is limited. This study analyzed the association between receiving Lvm and healthcare costs from a public payers' perspective., Methods: This analysis is based on data of 516 community-dwelling people living with dementia (PwD). Fourteen Lvm were extracted from dementia-specific guidelines, the German equivalent of the Choosing Wisely campaign, and the PRISCUS list. Healthcare utilization was retrospectively assessed via face-to-face interviews with caregivers and monetarized by standardized unit costs. Associations between Lvm and healthcare costs were analyzed using multiple linear regression models., Results: Every third patient (n = 159, 31%) received Lvm. Low-value antiphlogistics, analgesics, anti-dementia drugs, sedatives and hypnotics, and antidepressants alone accounted for 77% of prescribed Lvm. PwD who received Lvm were significantly less cognitively impaired than those not receiving Lvm. Receiving Lvm was associated with higher medical care costs (b = 2959 €; 95% CI 1136-4783; p = 0.001), particularly due to higher hospitalization (b = 1911 €; 95% CI 376-3443; p = 0.015) and medication costs (b = 905 €; 95% CI 454-1357; p < 0.001)., Conclusion: Lvm were prevalent, more likely occurring in the early stages of dementia, and cause financial harm for payers due to higher direct medical care costs. Further research is required to derive measures to prevent cost-driving Lvm in primary care, that is, implementing deprescribing interventions and moving health expenditures towards higher value resource use., (© 2022. The Author(s).)