The cost-effectiveness of ceftriaxone 1 g in the treatment of pneumonia in general medical wards was compared with that of second-generation cephalosporins. A total of 1,706 patients were treated with either a second-generation cephalosporin (cefotiam, cefuroxime) or ceftriaxone (single daily dose of 1 g), and 604 in each group were included in a matched-pair analysis. Cure or improvement in response to monotherapy was observed in 81.4% of patients on cefuroxime/cefotiam vs 91% of those on ceftriaxone (P < 0.0001). Adverse events occurred with equal frequency in both groups (1.9%). In terms of mean hospital costs for antimicrobial medication, the staff required to administer it as well as laboratory and X-ray examinations, effective treatment with ceftriaxone is DM 193/$ 105 (25%) less expensive than effective treatment with a second-generation cephalosporin (P < 0.001). From the perspective of the health insurance, the costs for a patient treated with ceftriaxone are DM 3,910/$ 2,140 vs DM 4,392/$ 2,400 for a patient treated with a second-generation cephalosporin (March 1998: USD 1 = DM 1.83).