OBJECTIVE: To perform an economic analysis for the treatment of Acute Exacerbations of Chronic Bronchitis (AECB) comparing cefdinir 300mg twice a day for five days to loracarbef 400mg twice a day for seven days. METHODS: A randomized double-blind controlled trial conducted in twenty-four US centers between October 1995 and June 1997 collected data whether patients became cured or not after treatment with cefdinir or loracarbef as well as hospitalizations, clinic visits, and medications not related to the study medication. The final analysis is reported from a third party payer perspective. A total of 585 patients were randomized into two groups, 290 patients receiving cefdinir and 295 patients receiving loracarbef. Symptoms for inclusion criteria were cough and mucopurulent or purulent sputum production for three consecutive months. History or clinical evidence of other diseases and concomitant infections requiring systemic antimicrobial therapy were among the exclusion factors. RESULTS: The unadjusted cure rates for cefdinir and loracarbef were very similar at 82.4% (239/290) and 80% (236/295) using ANOVA. Comparable efficacy was further supported through a probit regression showing an insignificantly higher cure rate for cefdinir of 10.3% (p=0.4903). The unadjusted mean medical costs per case for loracarbef were $345.03, 27.5 percent higher than cefdinir ($270.60). An ordinary least squares regression, including patient characteristics as covariates, showed a cost savings of $74.43(p<0.001) associated with cefdinir. CONCLUSIONS: The key findings of the economic analysis showed a significant cost savings by treating AECB with cefdinir 300mg twice a day for five days as compared with loracarbef 400mg twice a day for seven days. Furthermore, patients taking cefdinir had four less dosages, resulting in a higher state of compliance and convenience.