OBJECTIVES: The objective of this study was to estimate the budget and health impact of increasing use of combination fluticasone propionate and salmeterol (FS) in a managed care formulary by adults with mild to moderate persistent asthma. METHODS: An EXCEL-based model was developed to estimate the impact of increasing use of FS in the mix of treatments used for persistent asthma including fluticasone proprionate (FP), salmeterol (SAL), other inhaled corticosteroids (ICS), leukotriene modifiers (LTM), other combination therapies, and short-acting beta-agonists (SABA). The analysis was conducted from a health plan's perspective. Efficacy, adverse events, epidemiology, compliance, and cost data were obtained from published estimates including randomized controlled trials. The health plan was assumed to have 1,000,000 members. Treatment mix for asthma was based on market research data. An exponential relationship between compliance and efficacy was assumed for compliance rates above thirty percent. RESULTS: A total of 29,050 persons were estimated to seek treatment for persistent asthma in the health plan. Model results comparing an FS market share of 25% to one of 30% in the health plan show total asthma treatment cost increases of $0.03/per member (all enrollees) per month (PMPM) and $0.96/per asthmatic patient per month. The budget impacts were accompanied by an annual increase of 56,555 rescue-free days and reduction of 155 exacerbations. Results are sensitive to changes in drug costs, drugs used before FS, compliance with asthma drugs, and the relationship between compliance and efficacy with PMPM changes ranging from a saving of $0.01/PMPM to an increase of $0.06/PMPM for feasible alternative scenarios. CONCLUSION: An increase in market share of FS will have a small impact on the overall budget of a health plan in our base case and feasible alternative scenarios. This budget increase will be accompanied by reductions in exacerbations and other disease symptoms.