Patients may fail to successfully undergo a switch in therapy associated with a formulary change. The aim of this study was to measure health care costs and outcomes among patients who failed a formulary change in proton pump inhibitors in a VA medical center. Patients who failed a switch from omeprazole to lansoprazole (N = 51) were matched with patients who were successfully switched (N = 51). Health care utilization data was gathered from VA electronic databases and medical records for six months before and after the switch and, for failure patients, during the lansoprazole trial period. Statistical comparisons between failure and success patients were performed on changes in health care costs between these time periods. Health outcome data for the lansoprazole trial period and subsequent omeprazole reinstatement period were obtained through a telephone questionnaire of failure patients. Changes in total health care utilization costs did not differ significantly between failure and success groups for any of the time periods. Failure patients had significantly poorer health outcomes during their lansoprazole trial periods with significantly greater severity of heartburn and severity and frequency of acid regurgitation (P < 0.001). In conclusion, the formulary change had a negative impact upon health outcomes among failure patients but did not significantly affect their health care utilization costs. Identification of failure patients early in their lansoprazole trial periods could improved their health outcomes and satisfaction with medical care.