OBJECTIVES: To estimate pharmacy and overall budgetary impact of introducing linaclotide to a hypothetical one-million-member managed care plan. METHODS: A decision-tree model (one-year time horizon) was constructed to estimate the budgetary impact of linaclotide. Model inputs include plan population, treatment costs, estimated current and future monthly prescription utilization, response rates, and potential medical cost offsets. Model outputs are per-member per-month (PMPM) pharmacy and medical costs. Treatment options include linaclotide, lubiprostone, and other prescription therapies. The proportion of patients who respond to linaclotide are assumed to incur lower healthcare costs due to less healthcare utilization. Treatment costs are based on published prices (polyethylene glycol, the most common prescription therapy is used as a surrogate for other generically-available prescription therapies). Daily net treatment costs (payer perspective) are $5.50, $6.37, and $0.29 for linaclotide, lubiprostone, and polyethylene glycol, respectively. Current prescription utilization (14% lubiprostone, 86% other therapies) and potential annual per-patient medical cost offsets (IBS-C: $1781, CC: $2002) are derived from retrospective database analyses; future prescription utilization (8% linaclotide, 10% lubiprostone, 82% other) is assumed. Linaclotide response rates (IBS-C: 33.6%, CC: 18.6%) are from primary endpoints of Phase III clinical trials. Budgetary impact is calculated as the cost difference between current and future scenarios. One-way sensitivity analyses were performed. RESULTS: Introducing linaclotide to a managed care formulary is estimated to increase the pharmacy budget by $0.007 PMPM; when potential medical cost offsets are included, the resulting overall budgetary impact is estimated to be $0.003 PMPM.  In sensitivity analyses, number of linaclotide patients, IBS-C cost offsets, and conversion from other therapies to linaclotide had the greatest influence on budgetary impact; however, results did not vary substantially from base-case. CONCLUSIONS: Linaclotide is expected to result in a slight increase in pharmacy budgets which may be partially offset by medical cost savings.