OBJECTIVES: Ceftaroline fosamil (CPT, Teflaro®) is a new, broad-spectrum, bactericidal cephalosporin approved in the United States for the treatment of acute bacterial skin and skin structure infections (ABSSSI). In two randomized controlled ABSSSI trials (NCT00424190, NCT00423657), clinical cure rates in the modified intent-to-treat (MITT) population were 85.9% with CPT and 85.5% with vancomycin+ aztreonam.  Clinical response rates at Day 3 (MITT population, N=797) were 74.0% and 66.2% for CPT and vancomycin + aztreonam combination, respectively. The objective was to assess the budgetary impact of adding CPT to a hospital formulary in the United States.  METHODS: A three-year hospital budget impact model was constructed with three initial treatment options; CPT, vancomycin + aztreonam, and other vancomycin-containing regimens.  The target population was hospitalized adult, ABSSSI patients.  Clinical cure rates with initial treatment were assumed to be similar to those from CPT clinical trials.  Patients failing initial treatment were assumed to be treated successfully with a second-line antibiotic therapy.  Length of stay and cost per hospital day (by success or failure with initial treatment) were estimated based on a large database from over 100 US hospitals.  Other model inputs included:  annual number of ABSSSI admissions; projected annual case growth rate; proportion of ABSSSI target population receiving vancomycin-containing regimen; expected proportion of ABSSSI target population to be treated with CPT; drug acquisition cost; cost of antibiotic administration; cost of vancomycin monitoring.  A sensitivity analysis using 95% confidence limits of clinical cure rates provided varying estimates.  RESULTS: Estimated total cost for treating an ABSSSI patient with CPT is $313 lower ($13,804 vs. $14,117) than vancomycin + aztreonam (sensitivity analysis range; +$235 to -$833) and $71 lower ($13,804 vs. $13,875) than other vancomycin-containing regimens (sensitivity analysis range;  +$478 to -$1430).  CONCLUSIONS: Model estimates indicate adding ceftaroline to formulary does not negatively impact a hospital ABSSSI budget.