Background: Hyperphosphatemia is very common in patients with end-stage renal disease (ESRD). Recently, a new phosphate binder, sevelamer, has become available in the US to treat this condition. The high cost of sevelamer has significantly impacted on third-party payors such as Florida Medicaid. Calcium acetate is a less expensive drug alternative; however, unlike sevelamer, it is associated with the adverse effect of hypercalcemia. There have been few cost analyses performed on either drug. Moreover, few studies have assessed the economic impact of ESRD with hyperphosphatemia. Objectives: The aims of this study were to: (i) describe the characteristics of ESRD patients with hyperphosphatemia in terms of demographics, comorbidities, and healthcare utilization; (ii) evaluate the primary cost drivers in the treatment of these patients; and (iii) assess the cost of illness associated with treating ESRD patients with hyperphosphatemia. Methods: This retrospective study extracted data from the Florida Medicaid database. Healthcare costs were assessed from a third-party payor perspective. The patient inclusion criteria were current use of either sevelamer or calcium acetate and continuous eligibility to receive Florida Medicaid services from July 1, 1999 to December 31, 2002 with a run-in period from July 1, 1999 to December 31, 1999 to ensure that patients had been taking either of the two drugs for at least 6 months. The patient exclusion criteria were documented HIV and hemophilia. The specific direct costs included in the study were hospitalization costs, outpatient costs, emergency room costs, and prescription costs (only those for sevelamer and calcium acetate). The price year for the cost analysis was 2002. Results: A total of 10 058 recipients constituted the study sample, of which 54.0% were male and 46.0% were female. African Americans represented the largest racial group (45.6%), followed by Caucasians (28.6%). The most frequent comorbidities were hypertension, anemia, and congestive heart failure. Healthcare was most often utilized through facility visits (78.1%), followed by pharmacy-related services (17.2%) and then medical services (4.7%). Based on medical claims, the ambulance service contributed the most to healthcare utilization (8.7%), followed by recipient home visits (3.3%) and inpatient visits (2.1%). Facility claims utilization was dominated by dialysis center visits (48.5%), followed by general hospital visits (43.3%) and nursing home visits (7.4%). The major cost driver for 2000-2 was dialysis center visits ($US95 million), followed by general hospital visits ($US92 million), and prescription medication ($US11 million). The cost analysis revealed that ESRD patients with hyperphosphatemia within Florida Medicaid imposed an economic burden (including facility, medical, and prescription claims) of $US228 million for the years 2000-2. Conclusions: This is the first study to report the economic impact of ESRD with hyperphosphatemia. Given the high economic burden of this population, efforts should be undertaken to enhance preventative measures for hyperphosphatemia as well as the treatment and recovery of these patients.