Objective The aim of the present study was to estimate the potential healthcare cost savings associated with reduced prescribing of subcutaneous ketamine for the treatment of chronic cancer pain after publication of the Palliative Care Clinical Studies Collaborative (PaCCSC) ketamine randomised controlled trial (RCT), to provide further reasons to modify ketamine prescribing practice in this setting. Methods Potential cost savings in this setting were estimated from a health system perspective using a 1-year impact model. The model was populated with estimates derived using an epidemiological approach informed by morbidity and prevalence data, the PaCCSC feasibility study, ketamine RCT and national ketamine utilisation survey results, as well as clinical opinion. Results The total estimated annual hospitalisation costs associated with subcutaneous ketamine prescribing were A$3899600 (2605 bed-days). A 17% reduction in ketamine prescribing lowered hospitalisation costs to A$3236668 (2162 bed-days), a reduction of A$662932 (443 bed-days) because of reduced in-patient stays associated with ketamine toxicity and prescribing process. Conclusions The findings from the modelled impact analysis suggest that dissemination of the PaCCSC ketamine RCT results may have saved the Australian healthcare system approximately A$663000 in annual hospitalisation costs and freed up 443 in-patient bed-days, although there was high uncertainty within the study. Wider dissemination over time and targeted, local de-adoption strategies could result in further savings.