OBJECTIVE: Pneumococcal conjugate vaccine for infants has recently been found effective against meningitis, bacteremia, pneumonia, and otitis media, but costs more than previously introduced vaccines. We determined the savings in medical costs over 36 months of life attributable to the use of the vaccine in healthy infants in a large randomized trial. METHODS: We analyzed the actual costs and utilization for 36,471 children involved in a randomized trial of the heptavalent pneumococcal conjugate vaccine conducted in the Northern California Kaiser Permanente Medical Care Program (KP). Costs were analyzed for all children randomized in the trial (intent-to-treat) who were members of the health plan at any time during the follow-up. All clinic- and pharmacy-related costs were included, as were those hospital costs associated with conditions deemed to be potentially pneumococcal related. The cost of the vaccine and vaccine administration were excluded. Confidence intervals around cost savings were calculated using bootstrap replications. RESULTS: Compared with the control group, the vaccinated group incurred $78 less in medical costs (CI: $5 to $158) per child during the first 36 months of life, exclusive of the cost of the vaccine. This represented savings of about 3% of total medical costs for these children during that time period. CONCLUSION: The pneumococcal conjugate vaccine reduced medical costs in children in the first 36 months of life, before factoring in the cost of the vaccine and vaccine administration. These cost savings, however, are unlikely to offset the cost of the vaccine at its current price. Mental Health I