OBJECTIVES: Standard treatment for hepatitis C is peginterferon (PEG-IFN)+RBV with the aim of achieving a sustained-virological-response (SVR), which is widely considered to be a cure. Around 50% of patients infected with G1 do not achieve an SVR but re-treatment with PEG-IFN+RBV is successful in some, especially in those who achieve a complete-early-virological-response (HCV-RNA undetectable by week 12 [cEVR]). The objective of this analysis was to determine the cost-effectiveness of re-treating previous G1-non-responders to PEG-IFN+RBV. METHODS: A published Markov-model compared three strategies: PEG-IFNα2a+RBV, for 72 weeks (A), 48 weeks (B) or no treatment (C). Efficacy data for (A) and (B) were taken from the REPEAT study, where a difficult-to-treat population of G1-patients with previous non-response to PEG-IFN/RBV was investigated. Rates of cEVR were 15% for (A) and 9% for (B); SVR rates: 13% for (A) and 7% for (B); rates for (C) assumed to be zero. Patients not achieving a cEVR were assumed to discontinue treatment. A UK healthcare payor perspective was adopted. Drug and other costs were taken from published sources. A lifetime-horizon was chosen. Incremental-cost-effectiveness-ratios were expressed as cost per quality-adjusted-life-year (QALY). Costs and QALYs were discounted at 3.5% p.a. Sensitivity-analyses were performed. RESULTS: The analysis showed that an additional SVR prevented future costs and increased quality-adjusted-life-expectancy. Although (A) caused the highest overall drug costs, total costs were only £606 higher compared to (B) and £1949 compared to (C), reflecting the higher SVR rates and the substantial medical costs for patients without an SVR. The ICER of (A) vs. (B) was estimated at £2,012/QALY and £2,988/QALY for (A) vs. (C). CONCLUSIONS: Re-treatment with PEG-IFNα2a+RBV for 72 weeks is a highly cost-effective treatment option for patients not responding to previous treatment with PEG-IFN+RBV, regardless of comparator, due to reduction of the high medical costs associated with progressive liver disease and the associated QALY gains.