OBJECTIVE: Factors influencing atypical antipsychotic selection include physician preference, and patient characteristics. Studies comparing risperidone, quetiapine, olanzapine and ziprasidone resulted in inconclusive evidence suggesting superiority of one agent over another. Amidst concerns over increasing drug expenditures, cost has become a major issue in the drug sector. Therefore, the purpose of this study is to model the potential annual cost savings that may occur as a result of shifting utilization from risperidone, quetiapine, and olanzapine to ziprasidone within the Wisconsin Medicaid population. METHODS: Retrospective review of Wisconsin Medicaid paid prescription claims data from January 1, 2001 to December 31, 2001. Utilization of schizophrenic doses of risperidone, quetiapine, olanzapine, and ziprasidone were extracted for this analysis. The main outcomes calculated were cost per unit, mean cost per claim, and total yearly expenditure per drug. To test the robustness of the analysis, we modeled the total savings by estimating a 10%, 20% and 50% shift of risperidone, quetiapine and olanzapine utilization to ziprasidone. RESULTS: Total number of claims in 2001 for risperidone, quetiapine, olanzapine and ziprasidone were 41,408, 36,722, 48,647, and 9,288, respectively. The corresponding annual total dollar payouts were $8,705,264, $7,271,390, $17,081,012, and $1,729,874 respectively. The cost per claim for ziprasidone ($186.25) was significantly lower than olanzapine ($351.12), quetiapine ($198.01), and risperidone ($210.23). A 50% shift to ziprasidone would result in a total cost savings of $4,722,833,70 annually. CONCLUSION: This analysis suggests that there is a potential for substantial cost savings within the Wisconsin state Medicaid system that would occur as a results of shifting utilization from other atypical antipsychotics to ziprasidone.