OBJECTIVES: To estimate the incremental costs of necrotizing enterocolitis (NEC) among extremely preterm infants (GA < 28 weeks) and to evaluate the cost-effectiveness of an exclusively human-milk based diet (fortified with Prolacta+HMF™) vis-à-vis human-milk fortified with a bovine-milk based supplement in the prevention of NEC. METHODS: California OSHPD 2007 hospital discharges database was used to estimate the incremental costs of NEC and surgical NEC among all preterm infants. Costs were adjusted for confounding by demographics, gestation age, mortality and comorbidities. Expected medical costs of NEC among extremely preterm infants fed either exclusively human-milk based diet or human-milk fortified with bovine-milk based fortifier were calculated based on findings from a randomized controlled trial comparing neonatal outcomes of extremely preterm infants fed either of these diets. RESULTS: The adjusted incremental costs of NEC and surgical NEC among extremely preterm infants in 2009 US$ were 69,185 and $198,490 respectively per infant (p <0.0001). Expected medical costs of NEC were higher among infants fed human-milk fortified with bovine-milk based supplement resulting in net savings of $16,875 per infant for infants fed exclusively human-milk based diet (p <0.0001). The societal costs savings for the US population of premature infants is estimated to be US$ 400-600 million in direct medical costs and up to $2 billion from treatment-induced reduction in infant mortality. CONCLUSIONS: Feeding extremely preterm infants with an exclusively human-milk based diet (fortified with Prolacta HMF™) is highly cost-effective in the prevention of NEC as compared to feeding human-milk fortified with bovine-milk based supplements.