OBJECTIVES: Ceftaroline fosamil (CPT, TEFLARO®) is a new, broad-spectrum, bactericidal cephalosporin approved in the US for the treatment of community-acquired bacterial pneumonia (CABP). In two randomized controlled CABP trials (NCT00621504, NCT00509106), clinical cure rates in the modified intent-to-treat (MITT) efficacy population were 82.6% for CPT and 76.6% for ceftriaxone.  Response rates at Day 4 (MITT population, N=141) were 69.6% and 58.3% for CPT and ceftriaxone. The objective was to assess the budgetary impact of adding CPT to a US hospital formulary.      METHODS: A three-year hospital budget impact model was constructed to evaluate   patients hospitalized with CABP requiring intravenous (IV) antimicrobial therapy and having PORT risk class scores of III or IV. Patients were randomized to receive CPT 600mg IV q12h or 1g ceftriaxone IV q24h for 5–7 days. Clinical cure rates were assumed to be similar to those from CPT phase 3 CABP trials.  Patients failing initial treatment were assumed to be treated successfully with second-line antibiotic therapy.  Length of stay and total 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 CABP admissions; projected annual case growth rate; proportion of CABP target population initially treated with ceftriaxone; expected proportion of CABP target population to be treated with CPT; drug cost; cost of antibiotic administration; cost of second-line antibiotic therapy for patients failing initial therapy.  A sensitivity analysis using 95% confidence limits of clinical cure rates from phase 3 trials provided varying estimates.  RESULTS: Estimated total cost for treating a CABP patient with CPT is $1102 lower ($18,925 vs. $20,027) than treating a similar patient with ceftriaxone (sensitivity analysis range: -$6 to -$2,223).  CONCLUSIONS: Model estimates indicate adding ceftaroline to formulary does not negatively impact a hospital CABP budget.