The various costs and intangible factors that enter into formulary decisions in an era of increasingly frequent drug product shortages that can adversely affect patient care and increase treatment costs are described. Pharmacy administration at Carolinas HealthCare System analyzed the costs associated with making a formulary switch from the third-generation cephalosporin ceftriaxone to cefotaxime, which recently became available in generic form and has a similar spectrum of antimicrobial activity and therapeutic uses. Hard dollar costs for purchasing drugs and the supplies needed to administer them; soft dollar costs for staff time spent acquiring, preparing, and administering doses; and intangible factors were considered. A reliable supply of drug product from the manufacturer was an important intangible factor because of frequent drug shortages in the past few years and the adverse effect on patient care and the increased soft dollar costs associated with these shortages. Administrators at Carolinas HealthCare System decided not to make the proposed formulary change after weighing the many factors and costs.