ORGANIZATION: University of California, San Diego Medical Center. PROBLEM OR ISSUE ADDRESSED: Increasing pharmacy budget & inappropriate medication use. Rapidly rising inpatient pharmacy budget, lack of evidence-based guidelines for medication use, and potentially unsafe medication practices created opportunity for improvement within the University of California, San Diego Medical Center (UCSDMC) Inpatient Services. GOALS: Goals for the applied pharmacoeconomics pharmacist specialist position included “hard-dollar” savings to exceed 180% of salary expense after 1 year. Savings were to include decreased drug expense only, excluding cost-avoidance. Clinical outcomes research was to be performed to ensure quality of patient care was improved or maintained. OUTCOMES ITEMS USED IN THE DECISION: Clinical and financial outcomes are being assessed through a unique total cost of patient care model and multiple medication use evaluation projects. Ongoing outcomes research is based on medical chart review, trends in DRG coding data, and true changes in patient expense tracked through TSI Eclipsys® mainframe hospital data linked to patient encounter(s). Comparisons will also be made to reported clinical outcomes at other academic medical centers using the UHC Clinical Resource Manager Database®. Implementation Strategy: Initial review of current medication use practice yielded several ideas for projects with high potential return on investment. Collaboration with various surgical and medicine stakeholders resulted in improved medication use policy, stricter criteria for medication use, and research plans to assess outcomes. Enforcement of formulary policy was achieved through changes in practice supported by theUCSDMC Pharmacy & Therapeutics (P&T) Committee, including indication-specific medication order sets in the computerized provider order entry (CPOE) system. Compliance with therapeutic substitutions or changes in preferred medication use was rapid, mainly due to provider inability to circumvent indication-specific drug and dosage recommendations programmed into the order entry system. Major pharmacoeconomics projects included improved VTE prophylaxis with emphasis on prioritizing a single low-molecular weight heparin (LMWH), cost-saving antifungal therapeutic substitutions, appropriate use of factor VIIa in abdominal transplant and aprotinin in cardiothoracic surgery. RESULTS: Financial return on investment on the selected UCSDMC pharmacoeconomic projects exceeded goals for the new pharmacist position. Projects were all initiated within the Medical Center between February and April 2006. As of November 2006 approximate cost savings to date were: VTE prophylaxis ($29K), antifungal substitutions ($212K), factor VIIa ($140K) and aprotinin ($80K). Projected annual savings for these projects is anticipated to reach $800,000. Considering salary and benefits for the new pharmacist specialist position, annualized benefit to cost ratio will be approximately seven. In other words, for every dollar spent on an applied pharmacist specialist roughly $7.00 was returned in actual drug savings. All medication-related savings were calculated using actual direct costs to UCSDMC (i.e., no charge or charge to cost ratios were utilized). Financial savings from improved patient safety (i.e., fewer adverse events) through appropriate medication use has not yet been quantified, but is anticipated to be substantial. LESSONS LEARNED: The rapid success of the applied pharmacoeconomics projects within UCSDMC suggests a similar strategy may be beneficial at other academic medical centers. Financially responsible medication use does not necessarily result in inferior patient outcomes when evidence-based guidelines are enforced through a multidisciplinary process. In fact, such a process may ultimately result in superior financial and clinical outcomes for patients.