OBJECTIVES: A preliminary model was built early in the development pathway for a new vaccine. The vaccine had been studied in phase II trials but was yet to be tested in a phase III study. The twin objectives of the model was to determine the highest price for the vaccine where it remains cost effective and to identify which variables will most determine cost effectiveness. METHODS: A simple decision analytic model was built to determine the cost per QALY associated with the use of the vaccine in an elderly population. A literature search was undertaken to identify published evidence to populate the model. The model was run for a cohort equal to the total population in the countries for which the model was developed. This enabled the total budget requirement for a national vaccination program to be estimated. RESULTS: The model generated a price up to $600 per course of vaccine and with a cost per QALY of $US50,000. The main drivers of the cost effectiveness was the frequency; cost per episode of care for hospital addmissions, the incremental efficacy of the vaccine and mortally associated with the underlying infection.  CONCLUSIONS: The model identified a number of areas which would be important for data collection, these are mostly related. It shows the value of early decision analytic modelling to determine the threshold price and the data gaps. This will help the organisation developing the vaccine to focus research on collecting information which will be useful when applications are being made for reimbursement of the vaccine in the future.