OBJECTIVES: Levofloxacin IV (LEV) has been shown to reduce hospital length of stay (LOS) in patients hospitalized with community-acquired pneumonia (CAP) compared to other IDSA/ATS guideline recommended antibiotic regimens. This study aimed at estimating the budgetary impact of utilizing LEV in a hospital formulary for treatment of CAP in the United States. METHODS: An Excel®-based model was developed in accordance with Good Research Practices for Budget Impact Analysis disseminated by ISPOR to estimate the budget impact of increasing the use of or adding LEV in a hospital formulary. The model was based on published data on shorter LOS associated with LEV compared to moxifloxacin IV (MOX) or ceftriaxone and azithromycin combination therapy (0.54 and 0.8 days, respectively). Model inputs included annual hospital admission for CAP; current proportional share of LEV, MOX, combination therapy, and other antibiotic regimens (30%, 30%, 30%, and 10%, respectively); antibiotic drug costs (wholesale acquisition costs); average LOS and hospital costs from MedPAR. All costs were in 2007 USD. A new proportional share of 60% LEV, 15% MOX, 15% combination therapy, and 10% other regimens was assumed for this analysis. Sensitivity analysis explored the impact on results of different proportions of LEV use. RESULTS: The total cost per treated patient with the current proportional share was estimated to be $6900. With the new share (increasing LEV utilization from 30% to 60%), total cost was estimated to decrease to $6630. A 3.9% ($270) reduction in hospital budget was mainly due to shorter LOS associated with LEV. Savings in pharmacy costs were 13% ($35/patient). Hospitals that switched all MOX and combination therapy utilization to LEV, yielded cost savings of $540/patient. CONCLUSIONS: The model predicts that in the base case scenario an increase in LEV for CAP inpatient treatment would yield savings to the hospital’s total and pharmacy budgets.