Objective: Nosocomial pneumonia (NP), the second most common hospital-acquired infection in the US, is associated with excess morbidity, mortality, hospital days and health care costs. The objective of this study was to compare treatment costs and cost-effectiveness of doripenem (currently under FDA review for NP indication) to two common NP treatments. Methods: Outcomes for a population of hospitalized patients with NP, including a subset of ventilator-associated pneumonia (VAP) patients were modeled. Patients were assumed to be treated with doripenem, imipenem or piperacillin/tazobactam as first-line therapy for NP. Clinical cure and utilization data, including receipt of concomitant medications (vancomycin/amikacin), days on mechanical ventilation (MV), ICU days, and LOS in hospital, were estimated by combining data from two randomized, multicenter, non-inferiority clinical trials of doripenem. Wholesale acquisition costs were used for study drug; costs of MV, ICU and ward days were estimated from published literature. The primary outcomes were total costs and incremental cost per clinical cure. Robustness of the baseline cost-effectiveness analysis was evaluated using one-way and probabilistic sensitivity analyses (PSA). Results: In base-case analyses, initial treatment with doripenem was least costly at $42,041/treated patient, followed by piperacillin/tazobactam ($43,743), and imipenem ($44,834). Doripenem dominated piperacillin/tazobactam by being less costly with a higher probability of clinical cure (72.3% vs. 67.8%). Imipenem had a clinical cure rate of 72.6%, but at an additional cost of $992,200/cure. Results among the subset of VAP patients were similar. One-way sensitivity analyses show the model to be most sensitive to changes in the probability of cure with each therapy. Probabilistic sensitivity analysis results indicate that doripenem is cost saving versus imipenem in 77.1% and versus piperacillin/tazobactam in 70.6% of 1,000 iterations. Conclusion: First-line therapy with doripenem yields lower costs and similar efficacy compared to common NP treatments. Doripenem is a cost-effective treatment for NP versus imipenem and piperacillin/tazobactam.