BACKGROUND: Despite a lack of long-term data, imatinib has become standard therapy for patients with newly diagnosed chronic-phase chronic myeloid leukemia (CML) who are not candidates for allogeneic stem cell transplantation. In the current study, the authors estimated the incremental cost-effectiveness of imatinib versus interferon-alpha plus low-dose cytarabine (IFN+LDAC) as first-line therapy for these patients. METHODS: Data from the International Randomized Interferon versus STI571 Study and the literature were used to estimate lifetime costs, survival, and quality-adjusted survival. Survival estimates were based on published survival curves for patients who achieved and those who did not achieve a complete cytogenetic response after treatment with interferon-alpha. RESULTS: The mean estimated survival with first-line imatinib therapy was 15.30 years, compared with 9.07 years with IFN+LDAC. Undiscounted lifetime costs were approximately $424,600 with imatinib and $182,800 with IFN+LDAC. Using a 3% discount rate, the incremental survival gain with imatinib was 3.93 life-years and 3.89 quality-adjusted life-years (QALYs). Incremental discounted lifetime costs were found to be $168,100 higher with imatinib, resulting in incremental cost-effectiveness ratios of $43,100 per life-year saved (95% confidence interval [95% CI], $37,600-51,100) and $43,300 per QALY (95% CI, $38,300-49,100). CONCLUSIONS: The results of the current study demonstrate that compared with IFN+LDAC, imatinib is a cost-effective first-line therapy in patients with newly diagnosed chronic-phase CML.