OBJECTIVES: Reduced health-related quality of life (HRQoL) is a pronounced complication in short individuals with Growth Hormone Deficiency (GHD). Current treatment options for GHD children are limited; however, somatropin has been shown to normalise height in childhood and adolescence compared with no treatment. The aim of this study was to establish whether somatropin is a cost-effective treatment for GHD children compared with no treatment. METHODS:  A cost-effectiveness model estimated the costs and health benefits over the lifetime of GHD children. Treatment efficacy was based on Height standard deviation scores (HSDS). A Swedish health care perspective was used. Unit costs (SEK; 2008) were obtained from official sources. A 3.0% discount rate was used. Clinical data (height, dosing and treatment duration) were obtained from a systematic literature review (only studies with n>300). Utility data was derived from a published study assessing the relation between HSDS and HRQOL. Sensitivity analyses were conducted to assess the degree of uncertainty. RESULTS: Start HSDS was -2.8 (SD 0.8) and final HSDS was -1.5 (SD 0.8) with somatropin treatment. Untreated children gained no HSDS. The mean somatropin dose was 0.023 mg/kg/day over a duration of 5.1 years (SD 1.8) Over a patient’s lifetime, somatropin was associated with a gain of 2.3 quality adjusted life years (QALYs).  Somatropin was associated with an incremental cost per QALY of 342,592 SEK compared with no treatment. Probabilistic sensitivity analysis, in which all parameters within the model were varied, showed that there was a high probability that somatropin was cost effective compared with no treatment, based on a willingness to pay threshold of 500,000 SEK per QALY. CONCLUSIONS: Based on a willingness to pay threshold of 500,000 SEK per QALY, somatropin(Norditropin®) is a cost-effective treatment for GHD children.