This study examines the budgetary effect of using ciclopirox, itraconazole (pulse treatment), terbinafine, or itraconazole (continuous treatment) as first-, second-, or third-line therapy in the treatment of toenail onychomycosis by determining which therapeutic sequence is most cost effective. Using a disease treatment pathway model, alternative agents were compared based on cost per clinical response. The results from this sequential treatment analysis demonstrated that ciclopirox followed by itraconazole pulse and then terbinafine provides the lowest-cost approach to the treatment of onychomycosis (dollar 757.89 per clinical response), followed by the sequence of ciclopirox, terbinafine, and itraconazole pulse (dollar 796.13 per clinical response). This study provides a framework for formulary decision makers to evaluate a sequential treatment pathway that resembles actual practice.