OBJECTIVES: To evaluate the cost-effectiveness of quetiapine extended release 300 mg once daily (o.d.) in adult patients with acute bipolar depression compared with average standard adult doses of paroxetine 20mg o.d. and lithium 1.2g o.d. METHODS: A weekly cycle 7-state markov model was designed to evaluate the cost-effectiveness of quetiapine extended release over a 3-year time horizon from the perspective of the UK National Health Service. Remission, treatment-emergent mania, discontinuations, significant weight-gain (≥ 7%) and extrapyramidal adverse event rate probabilities were used in the model.  These, in the form of relative risks, were obtained from two separate indirect comparisons of quetiapine extended release versus paroxetine and lithium with placebo as the common comparator.  These comparisons were obtained from randomised blinded studies in the AstraZeneca trial registry for quetiapine in the treatment of acute bipolar depression. A systematic literature review was completed to identify suitable health state utility values. Costs included pharmacological therapy and resource use associated with the treatment of mood events. Results were reported in cost (2009 values) per quality-adjusted life years (QALYs). A probabilistic sensitivity analysis (PSA) was conducted to assess the robustness of the results. RESULTS: Quetiapine extended release was a cost-effective treatment option for adults with acute bipolar depression versus both paroxetine and lithium. The deterministic incremental cost-effectiveness ratios were £1,541/QALY and £14,548/QALY, when quetiapine extended release was compared with paroxetine and lithium, respectively. These results were supported in the probabilistic sensitivity analysis. Eighty-four percent and 92% of simulations found quetiapine extended release to be cost-effective at a threshold of £30,000/QALY versus paroxetine and lithium, respectively. CONCLUSIONS: The results of this cost-utility analysis suggest that not only is quetiapine extended release effective but that it is also a cost-effective alternative compared with paroxetine and lithium in the management of adult patients with acute bipolar depression.