OBJECTIVES: According to Brazilian public databases (DATASUS), community acquired pneumonia (CAP) requiring hospitalization for individuals of age 65+ have a mortality relative risk increase of 4.05 when compared to the average rate of younger ages. This study has the objective of evaluating the cost-effectiveness of azithromycin 500mg/day QD and clarithromycin 1g/day BID for the treatment of CAP for immunocompetent individuals age 65 and older from the public healthcare perspective in Brazil. METHODS: A decision-tree model, built based on the following health states: death, cure and discontinuing due to adverse events (phlebitis, diarrhea, infusion reaction which would lead to switching the antibiotics). Risks and length of treatment were obtained from the published literature and acquisition costs were retrieved from Brazilian public databases (Banco de Preços em Saúde and SIGTAP - Sistema de Gerenciamento da Tabela de Procedimentos, Medicamentos e OPM do SUS). Resource utilization (exams, procedures and materials) were gathered based on the latest clinical guidelines for CAP defined by the Brazilian Society of Pneumology. The time horizon was defined as one year. Effectiveness was expressed as life years gained (LYG). Values were expressed in 2011 USD. First order probabilistic sensitivity analysis was carried by Monte Carlo simulation of 10,000 iterations considering the range of values for the lengths of treatment in a normal distribution. RESULTS: Simulation considering 10,000 iterations showed the following values for azithromycin and clarithromycin respectively: Total LYG [9,640vs.8,840]; average costs per treatment [USD614.11vs.USD618.15]; average cost-effectiveness ratio [USD637.07/LYGvs.USD699.23/LYG], representing a cost saving per patient of USD62.17/LYG for azithromycin. Considering 180,851 cases of pneumonia hospitalizations for adults age 65+ registered at public hospitals in Brazil(2010), the overall estimated savings for the incorporation of azithromycin would be approximately USD730,561.15. CONCLUSIONS: In this analysis, azithromycin presented the greatest effectiveness diminishing costs, by reducing mortality and treatment discontinuation due to adverse events.