OBJECTIVES: Adult patients with moderate to severe asthma could potentially avoid utilizing excessive healthcare resources by reducing the need for management of severe adverse effects associated with albuterol. This modeled analysis was performed from a managed care payer perspective to determine if nebulized levalbuterol is associated with a lower cost per decreased use of rescue inhaler, as compared with nebulized racemic albuterol over a four week period. METHODS: Cost data was obtained from a public hospital, an HMO, and the Red Book. Costs were measured in 2000 U.S. dollars. Probabilities were derived from a clinical controlled trial and the National Center for Health Statistics. The primary outcome of interest was cost per decreased puff of rescue medication per twenty eight days. RESULTS: Levalbuterol (1.25 mg) decreased puffs by 7.5 over twenty eight days. However, the average expected costs for treatment with racemic albuterol (2.5 mg) is $116.94/month, $171.46/month for levalbuterol (0.63 mg) and $182.33/month for levalbuterol (1.25 mg). Cost effectiveness ratios were $8.35, $24.50, and $8.80 for albuterol (2.5 mg), levalbuterol (0.63 mg) and levalbuterol (1.25 mg), respectively. Results were unchanged after sensitivity analyses. CONCLUSIONS: Levalbuterol (1.25 mg) was beneficial over racemic albuterol (2.5 mg) in decreasing puffs of rescue medication over twenty eight days, but at an additional cost. An incremental cost effectiveness analysis demonstrated it costs $9.73 for each additional decreased puff per day. The decision maker needs to evaluate whether the additional effect is worth the added cost.