The use of decision analysis in selecting a histamine H2-receptor antagonist for the formulary at a hospital in Spain is described. Cimetidine, ranitidine, and famotidine were identified as the possible alternatives. The evaluation criteria established were therapeutic efficacy, adverse effects, drug interactions, years of clinical use, dosage interval, cost, and dosage forms. The relative importance of the criteria was determined by assigning utility values to each. Probability values were assigned to estimate how well each drug met each criterion. By multiplying the utility and probability values for each criterion and summing the scores, a total score was calculated for each drug. The alternative with the highest total score was ranitidine. A sensitivity analysis showed that the results were stable over a plausible range of probability and utility values. Accordingly, ranitidine was selected for inclusion on the formulary. Decision analysis provided an effective method for selecting which histamine H2-receptor antagonist to include on the hospital's formulary.