The current health care environment has had a significant impact on hospital Pharmacy and Therapeutics Committee formulary decisions. In evaluating a new therapy for formulary inclusion, a cost savings along with equivalent or an improvement in patient care and safety is optimal. Teicoplanin is an investigational glycopeptide antimicrobial agent with a spectrum of activity similar to vancomycin. Unlike vancomycin, however, teicoplanin has a long elimination half-life permitting administration once daily, and is well tolerated when given intramuscularly. In addition, teicoplanin is associated with a favorable safety profile. Red man syndrome does not appear to be a significant clinical problem. Results of our cost minimalization analysis using the average acquisition costs of vancomycin revealed that teicoplanin (400 mg), at an average acquisition cost of less than $28.46 when administered intravenously and $30.93 when administered intramuscularly, offers a clinically efficacious, safe, and less expensive alternative to vancomycin therapy.