OBJECTIVES: Skeletal complications from bone metastases impose a significant clinical and economic burden on patients and health systems.  Zoledronic acid (ZA) has been the mainstay for prevention of skeletal related events (SREs) in patients with bone metastases.  In 2010, FDA approved denosumab for prevention of SREs in patients with solid-tumor bone metastases.  We assessed the financial impact to a managed-care plan of adding denosumab to a ZA-only formulary for this indication. METHODS: We developed an Excel-based model to evaluate the trajectory of spending over 1-3 year time horizons in a hypothetical managed care plan with 1 million members and 688 patients with solid-tumor bone metastases.  The model considered use and associated costs of drug acquisition and administration, SRE management, and adverse event (AE) treatment under two scenarios: (1) Base Case—ZA-only formulary; and (2) Restricted Formulary—denosumab limited to second-line treatment in patients failing ZA.  SREs included pathologic fracture, therapeutic radiology, spinal cord compression, and orthopaedic surgery.  AEs included osteonecrosis of the jaw, renal problems, acute phase reactions, and hypocalcemia.  Model parameters were derived from published literature, product labels, clinical trial data, and administrative cost databases. Drug costs were based on published wholesale acquisition cost minus copayments. Costs were stated as 2010 US dollars. RESULTS: In the Base Case scenario (ZA only), total costs were $10.8 million per year.  Allowing restricted access to denosumab was associated with total costs of $11.4, $11.6, and $11.7 million over 1, 2, and 3 years ($0.05, $0.06, $0.08 incrementally per-member per-month).  The corresponding incremental cost of adding denosumab was $69, $94, and $115 per ZA-treated member per month. CONCLUSIONS: With an acquisition cost nearly twice that of ZA, restricted use of denosumab adds considerably to patient management costs.  Incremental benefits should be weighed carefully against these costs before considering coverage.