OBJECTIVES: To estimate severe sepsis (SS) incidence, health resource use and costs during hospitalization in Brazilian private health care system, and to verify economic impact of drotrecogin-alfa activated (DrotAA) treatment. METHODS: We performed a retrospective data analysis of private health plans' electronic claims between April 2005 and March 2006. SS were defined according to 2001 ACP/SCCM criteria. Collected data were: total length of stay (LOS), length of ICU stay (ICU–LOS), maximum organ dysfunction number achieved during hospital stay (MOD), average cost per day, and total cost per patient. RESULTS: Incidence of SS hospitalization among 5.2 million health plan beneficiaries was 2,12/1,000, summing up 11,067patients/year. Cost/day and total hospital cost increased proportionally to MOD: from R$ 2,398.00 (patients with 1MOD) to R$ 2,900.00 (4MOD) and from R$ 43,010.00 to R$ 64,276.00. ICU-LOS varied from 8 to 10 and total-LOS from 18 to 22 days. Patients with SS with 1MOD represented >75% of the total number, while with 4MOD were 2% of total population. DrotAA were given to 1.3% of total SS patients(148). 53% of DrotAA patients had MOD= 2, compared to 19% of the non-DrotAA patients. Average cost of DrotAA per patient was R$ 38,809.00. Total hospital cost for the whole group of patients was R$ 498,079,803.00. Thus, DrotAA cost represented 1.2% of hospital costs related to SS. CONCLUSION: Costs with SS are substantial, and increase with disease severity. Since there is minor increase in LOS, an increase in daily medical resources is expected. Patient number receiving DrotAA, and consequently, additional cost are small relative to SS baseline cost. Thus, previously described DrotAA benefit on survival and organ dysfunction may outweigh drug costs.