In its clinical assessment of the respiratory syncytial virus (RSV)-specific monoclonal antibody palivizumab, the IMpact-RSV Study Group demonstrated a reduction in hospitalizations for RSV-related lower respiratory tract infection in infants who received prophylaxis compared with infants who did not receive prophylaxis. An assessment of the RSV-related expenses for managing both groups of infants is needed to provide insight into the value of prophylaxis. The present study was conducted to identify and compare RSV-related health care expenditures incurred by infants who did not receive prophylaxis throughout one RSV season and after. Using a decision-analytic model populated with data from the contemporary medical literature, a pharmacoeconomic study was conducted from the perspective of the payer. Probabilities for RSV-related hospitalizations of infants who did and did not receive prophylaxis were abstracted from several published studies. Components of inpatient and outpatient care were identified through examination of hospital records, reviews of the published literature, and consultation with expert clinicians. Charges related to prophylaxis and medical management of infection were abstracted from hospital billing records and published data. Appropriate charges were applied to decision-tree branches and multiplied by in-line probabilities for outcomes. Products at terminal nodes were summed to establish total expected charges for both groups of infants. Widespread clinical use of prophylactic palivizumab would result in incremental expenses < or =$3459 per infant or cost savings < or =$39,107 per infant. The variability in value of prophylaxis derives from the rate of RSV-related hospitalizations in the community and the total health care expense of managing infected infants.