Trial design Three feeding regimens—centrally produced ready-to-use therapeutic food, locally produced ready-to-use therapeutic food, and augmented, energy-dense, home-prepared food—were provided in a community setting for children with severe acute malnutrition (SAM) in the age group of 6–59 months in an individually randomised multicentre trial that enrolled 906 children. Foods, counselling, feeding support and treatment for mild illnesses were provided until recovery or 16 weeks.

Methods Costs were estimated for 371 children enrolled in Delhi in a semiurban location after active survey and identification, enrolment, diagnosis and treatment for mild illnesses, and finally treatment with one of the three regimens, both under the research and government setting. Direct costs were estimated for human resources using a price times quantity approach, based on their salaries and average time taken for each activity. The cost per week per child for food, medicines and other consumables was estimated based on the total expenditure over the period and children covered. Indirect costs for programme management including training, transport, non-consumables, infrastructure and equipment were estimated per week per child based on total expenditures for research study and making suitable adjustments for estimations under government setting.

Results No significant difference in costs was found across the three regimens per covered or per treated child. The average cost per treated child in the government setting was estimated at US$56 (<3500 rupees).

Conclusion Home-based management of SAM with a locally produced ready-to-use therapeutic food is feasible, acceptable, affordable and very cost-effective in terms of the disability-adjusted life years saved and gross national income per capita of the country. The treatment of SAM at home needs serious attention and integration into the existing health system, along with actions to prevent SAM.

Trial registration number NCT01705769; Pre-results.