OBJECTIVE: To evaluate the economic value of a pharmaceutical product, Kremezin, in treating patients with chronic renal failure (CRF) by estimating the amount of cost savings due to its effect of delaying the onset of receiving dialysis treatments. METHODS: The types of costs included were direct medical and non-medical costs, and productivity loss costs. The information about the effect of Kremezin was obtained from the results of randomized controlled clinical trials. Cost information was derived from administrative data for 20 hemodialysis and 20 peritoneal patients from one tertiary care hospital, and 20 hemodialysis patients from one free-standing dialysis center. Per-capita cost savings resulting from Kremezin therapy were separately estimated for the cases delaying the onset of hemodialysis and the cases for peritoneal dialysis. By computing the weighted average for the cases of hemodialysis and peritoneal dialsyis, the expected per-capita cost savings of a patient with CRF was obtained. Using the discount rate of 5%, future cost savings were converted to the present value. Budget impact analysis was performed to estimate the expected national cost savings if Kremezin is administered to 25%, 50%, and 75% of the total incident dialysis patients in 2004. RESULTS: Depending on the effect of Kremezin in delaying the onset of dialysis treatments by one, two, or four years, a patient with CRF could save costs by 1.8¢¦5.5, 1.6¢¦5.1 and 3.4¢¦10.6 million Korean Won (KW), respectively from the perspectives of insurer, patient, and society. Also, the national financial impact of adopting Kremezin for 25%, 50%, and 75% of the total incident dialysis patients was estimated as cost savings of about 61,511¢¦579,162 million KW per year in Korea. CONCLUSION: The estimated amount of cost savings resulting from treating CRF patients with Kremezin confirms that its effect of delaying the onset of dialysis treatments has a considerable economic value.