OBJECTIVE: In addition to information about efficacy and safety, decision-makers are interested in information about the impact of new drug treatments on health care costs. The objective is to determine the impact of using gatifloxacin versus levofloxacin on total costs among outpatient adults with community-acquired pneumonia (CAP). METHODS: Patients were randomized to receive either gatifloxacin (GAT) or levofloxacin (LEV) once daily. Data were collected on efficacy, safety, and medical care resource use from 163 GAT and 176 LEV clinically evaluable patients. Medical care resource use information included the dose and duration of the study and concomitant medications, duration of intensive care unit (ICU) and non-ICU hospital stay, and number of outpatient physician visits. We used a multivariate regression analysis to determine the impact of treatment on total costs. The dependent variable was the logarithm of total costs to adjust for the left skewness found in the cost data. The regression analysis controlled for disease severity, admission to the hospital on the day of (or before) randomization, and prognostic factors (including age, presence of comorbidities, and a previous CAP episode within the last 12 months). RESULTS: GAT achieved a cure rate of 96% compared to 94% for LEV. Based on results from the multivariate regression analysis, patients in the GAT arm could expect total costs that were approximately 8% lower (on average) than the total costs incurred by patients in the LEV arm. Patients admitted to the hospital on the day of (or before) randomization could expect total costs that were nearly 51 times higher. Hospital admission on the day of (or before) randomization was the only statistically significant driver of expected total cost. CONCLUSION: GAT shows a trend to be less costly and have a higher cure rate than LEV for outpatients with CAP.