OBJECTIVES: To evaluate the costs and outcomes of extended-release clarithromycin versus clarithromycin immediate-release for outpatients with bacterial lower respiratory tract infections (LRTIs, community-acquired pneumonia and acute exacerbations of chronic bronchitis). METHODS: We developed a decision-analysis model comparing extended-release clarithromycin with immediate-release for LRTIs. Treatment success and adverse event (AE) rates were derived from weighted averages of identified published studies that included dichotomous variables for cure vs. failure (16 immediate-release studies, 4 extended-release). Costs were standard US values. The model included the acute antibiotic treatment period (start of first-line therapy through completion of second-line therapy, if applicable). The model measured the proportion of patients cured on first- and second-line therapy, patients discontinuing due to AEs and lack of efficacy, and physician, antibiotic, and total costs per episode. RESULTS: More patients achieved clinical cure with clarithromycin extended-release (83.9%) than with clarithromycin immediate-release (72.8%); AE discontinuation rates were lower for the extended-release group (2.4% versus 4.9% for the immediate-release group). Total costs with clarithromycin extended-release were $32 (16%) less than total costs for immediate-release. Sensitivity analyses indicated that the model is robust to changes in cure and AE discontinuation rates within reasonable ranges. Incorporating greater treatment adherence for extended-release (once-daily) versus immediate-release (twice-daily) therapy resulted in greater cost savings for clarithromycin extended-release. CONCLUSIONS: Clarithromycin extended-release is cost saving compared with clarithromycin immediate-release for LRTIs, using base-case results. The model did not include hospitalization, which is uncommon in mild to moderate LRTIs; addition of hospitalizations is likely to demonstrate additional costs savings with clarithromycin extended-release. These differences in clinical and economic results are important in that extended-release therapy can lead to improved patient outcomes with decreased costs. Further research is needed to determine the cause and impacts of these differences in efficacy and tolerability.