Methicillin-resistant Staphylococcus aureus (MRSA) plays a significant role in the pandemic of multidrug resistant bacterial infections and is a major cause of hospital-acquired pneumonia. MRSA pneumonia carries a high morbidity and mortality rate especially in elderly diabetics with chronic kidney disease. S. aureus is highly virulent and successful respiratory pathogen. Vancomycin and linezolid are the only two antimicrobial agents FDA-approved to treat MRSA pneumonia. Standard vancomycin dosing is associated with high clinical failure rates and higher dosages are associated with increased nephrotoxicity. Pharmacokinetic and pharmacodynamic limitations are major contributors to poor outcomes with vancomycin. New agents are needed to improve treatment outcomes with MRSA pneumonia. Recently released antimicrobials with in vitro activity are not FDA-approved for treating MRSA pneumonia. Other novel agents are being investigated though none are in late-stage development. Pharmaceutical industry perception of low returns on investment, a Sisyphean regulatory environment, and obstacles to patentability have contributed to declining interest in both the development of novel antibiotics and the improvement of existing generic formulations. Despite decades of investigation into liposomal encapsulation as a drug delivery system that would increase efficacy and decrease toxicity, only liposomal amphotericin B and doxorubicin are commercially available. In this article, the pharmacokinetics and biodistribution of a novel PEGylated liposomal vancomycin formulation along with passive targeting and the enhanced permeability and retention effect of liposomal drug delivery; the pathogenesis of MRSA pneumonia; and recent patents of novel anti-MRSA agents, including inhalational liposomal vancomycin, are reviewed.