The objectives of this study were: (1) to compare total hospital charges for a sample of cadaveric renal transplant patients categorized according to the type of induction therapy used (Orthoclone OKT®3 Sterile Solution or Atgam® Sterile Solution); (2) to compare specific charge categories between the two groups; and (3) to examine the relationship between charges and a set of independent variables. A retrospective review was conducted of hospital charges associated with a sample of renal transplant patients. The overall sample for this study comprised 510 patient discharges from 22 hospitals in the United States. Comparisons between the OKT3 and Atgam groups were made for total and specific charge categories using two different approaches to help control variations in charges that were not related to the type of induction therapy used. The first approach consisted of t test or chi-square comparisons between the groups for subsets of observations that had been identified in a stepwise fashion. These judgment samples were defined to remove sources of variation in charges other than those resulting from the type of induction therapy selected. The second approach used multiple linear regression analysis to help statistically control variation in charges from other sources. The results showed that higher drug charges in the Atgam group were offset by lower charges in other categories (P < 0.05). These findings suggest that hospital formulatory committees should consider all relevant costs, not just drug acquisition costs, when selecting products. However, further investigation is warranted to explore differences in charges due to: (1) between-hospital variation; (2) patients' severity of illness before receiving induction therapy; and (3) differences in side-effect profiles for the two induction therapies.