Esomeprazole was excluded from the United Healthcare formulary for all commercial health plan members January 1, 2007. A retrospective analysis of the Ingenix LabRx database (September 1, 2005, through June 30, 2007) evaluated the effect of this exclusion on health care utilization and costs in a real–world setting. Total medical care services, including pharmacy claims, were examined for 6 months before and after the esomeprazole exclusion. Patients aged ≥ 18 years were included if they had continuous health plan enrollment (September 1, 2005, through June 30, 2007), ≥ 1 esomeprazole prescription during the index period (March 1 through August 31, 2006), and ≥ 2 esomeprazole prescriptions (with no switch to another proton pump inhibitor [PPI]) during the baseline period (sliding 6–month window from September 1 through August 31, 2006). During the 6–month post–exclusion period (January 1 through June 30, 2007), 19.5% of patients remained on esomeprazole, 43% switched to another PPI, and 37.5% had no prescription PPI claims. Compared with the previous 6 months, post–exclusion was associated with increased health care utilization, including a 4.2% increase in number of inpatient visits, and a 2.7% increase in other services (eg, laboratory testing, ambulatory procedures). Esomeprazole prescriptions decreased by 76.5%, whereas overall pharmacy claims for all drug classes (including gastrointestinal drugs) increased by 5.2%. Six–month prescription drug costs decreased by $177/patient (95% confidence interval [CI], $160–$194/patient), whereas costs for total medical services increased by $450/patient (95% CI, $259–$640/patient), resulting in a net increase of $273/patient (95% CI, $137–$408/patient). Total and gastrointestinal–related medical services costs were significantly higher for those switching to another PPI versus those continuing esomeprazole. Inpatient utilization contributed most (44.5%) to increased costs of nongastrointestinal comorbidities. This study provides real–world evidence that formulary exclusions can lead to unintended increases in overall health care utilization and costs that exceed anticipated pharmacy budget savings.