We compared healthcare expenditure over a six-month period following initiation of therapy with either venlafaxine (immediate and extended-release) or a selective serotonin reuptake inhibitor (SSRI) in depressed patients with or without anxiety. Patients beginning treatment for a new depressive episode were identified retrospectively using the administrative data of the MEDSTAT MarketScan database for the period 1994-1999. Before beginning therapy, patients prescribed venlafaxine had more non-mental illnesses (0.85 vs 0.76; p<0.01) and hospitalisations for mental illness (0.53 vs 0.29; p<0.05) than patients prescribed SSRIs. In the six months after initiating treatment, venlafaxine was associated with lower hospitalisation expenditure for non-mental illness ($177 vs $526; p<0.01) than SSRIs, although total healthcare expenditure was not significantly different. Venlafaxine was associated with a 50% decrease in the odds of hospitalisation for non-mental illness compared with SSRIs, with significantly lower inpatient expenditure.