CHICAGO (Reuters) -- A cheaper, older drug proved about as effective in treating schizophrenics as a costlier, newer drug that also causes some patients to gain weight, a study said on Tuesday.

In the one-year study of 300 veterans, the older drug haloperidol was compared to olanzapine, sold by Eli Lilly and Co as Zyprexa.

The researchers concluded there was little difference between the drugs in reducing schizophrenic symptoms or improving patients' quality of life, although olanzapine improved memory and mental functioning slightly better than the older drug.

However, olanzapine users were more likely to gain weight and the drug has been linked with a higher risk for diabetes.

Haloperidol, mostly sold as Haldol, cost roughly 6 cents a day per patient compared to olanzapine's more than $8 per day.

"This study suggests that the advantages of olanzapine may be limited, while costs are considerably greater," said study author Robert Rosenheck of the Veteran's Administration and Yale University.

Writing in the Journal of the American Medical Association, Rosenheck said the per-patient yearly cost was as much as $9,000 higher for those taking olanzapine. Annual sales of olanzapine total $2 billion in the United States, he said.

Those taking haloperidol were given a second drug to ease the tremors and twitches that can accompany its use, among other side effects.

A variety of drugs are used to treat the roughly 2.2 million schizophrenics in the United States and 24 million worldwide. The mental illness, which usually emerges during late adolescence or young adulthood, can cause delusions, hallucinations and thoughts of suicide.

Rosenheck said the VA -- which provides care to 200,000 veterans with some form of psychosis -- normally recommends other drugs to treat schizophrenia. He said an injectable, longer-acting form of risperidone, a drug sold as Risperdal that costs half as much as olanzapine, may prove promising.