OBJECTIVE: To determine the economic impact of an appropriate use edit placed on select non- benzodiazepine hypnotic agents for an HMO client. METHOD: Zolpidem and zaleplon are non-benzodiazepine hypnotics indicated for the short-term treatment of insomnia, generally 7-10 days. Comparator HMO 1, with approximately 380,000 members, instituted an appropriate use edit allowing for 14 days of hypnotic therapy every 3 months. Comparator HMO 2, with approximately 220,000 members, placed no edit and served as the control. The study time frame was January-December 2000. Pharmacy claims data were used to evaluate the effect of the edit by identifying the number of prescriptions filled, the total plan cost for these agents and the average cost per prescription for both HMO 1 and HMO 2. In addition, trend analysis was performed to ascertain if a shift to the unedited benzodiazepine hypnotics occurred due to the edit placed by HMO 1. RESULTS: The total number of prescriptions filled for zolpidem and zaleplon was 13,783 for HMO 1 vs 15,313 for HMO 2 with total plan costs of $512,512 for HMO 1 vs $680,689 for HMO 2. The average cost per prescription for zolpidem was $38.05 and for zaleplon was $26.56 for HMO 1 vs. $44.32 and $45.63 respectively for HMO 2. Trend analysis demonstrated no shift in utilization to benzodiazepine hypnotics for HMO 1. Cost avoidance was calculated by taking the difference in average prescription cost, by agent, for HMO 2 and subtracting the applicable average prescription cost for HMO 1. This cost avoided was then multiplied by the number of prescriptions filled, by agent, for HMO 1, to achieve the total cost avoided. The total cost avoidance achieved for HMO 1 was nearly $100,000. CONCLUSION: Appropriate use edits administered by the Pharmacy Benefits Manager can achieve significant cost avoidance outcomes for HMO clients.