OBJECTIVES: To estimate the value of herd protection in Switzerland for the seven-valent pneumococcal conjugate vaccine (PCV-7). METHODS: A cross-sectional pneumococcal disease health state model was developed examining outcomes and direct cost savings among Swiss children (ages ≤10 years) vaccinated with PCV-7 (assuming a 4-dose schedule and 80% vaccination coverage) and unvaccinated adults (ages ≥20 years). Swiss estimates of population size, disease incidence and mortality, and direct medical and non-medical cost were applied to the model. Vaccine efficacy was assumed to be 97%, 11%, and 6% for invasive pneumococcal disease, pneumococcal pneumonia, and otitis media, respectively. Recently-reported PCV-7-associated reductions in IPD rates due to herd immunity in the US were applied to unvaccinated adults 20–39, 40–64, and ≥65 years. RESULTS: PCV-7 vaccination results in 235.5 life years gained (LYG). Vaccinating each hypothetical annual Swiss cohort of 80,000 births is expected to save a total of 20,592,499 CHF (before accounting for vaccine cost), a savings on an additional 598,652 CHF due to herd immunity. As a result of vaccination, the per-patient payer savings was calculated at 321.76 CHF. When accounting for herd immunity, PCV-7 has a cost-effectiveness ratio of 19,973 CHF per LYG or 16,607 CHF per QALY; without herd immunity the cost per LYG and cost per QALY were 35,378 CHF and 28,822 CHF, respectively. Per-unit resources required to avoid illness were also lower when benefits of herd immunity are considered. CONCLUSIONS: Widespread PCV-7 use would result in substantial cost savings and reduction in pneumococcal disease-related morbidity and mortality not only in vaccinated infants, but also in adults. Decreased nasopharyngeal carriage of S. pneumoniae among those vaccinated with PCV-7 is associated with a decline in pneumococcal disease among unvaccinated community members via reductions in disease transmission (herd effects).