OBJECTIVES: Schizophrenia is a complex and heterogeneous psychiatric disorder with usual onset in early adulthood leading to a lifetime of morbidity and chronic disability that affects a person’s ability to perceive, think and feel. The disease heterogeneity and chronic course presents significant challenges for realistic economic modelling. We present a cost-effectiveness model of schizophrenia applied to the UK, which overcomes the limitations of previous modelling techniques. METHODS: Given the heterogeneous and progressive nature of schizophrenia, accurate modelling needs to capture patient history and, in particular, the complex interactions between treatment discontinuation and relapse, and the impact of past relapses on the risk of future relapse.  For these reasons, a discrete event simulation (DES) model was built comparing the cost-effectiveness of olanzapine long-acting injection (OLAI) against risperidone long-acting injection (RLAI).  The model considered a real-world patient population utilising data from real-world sources such as open-label studies rather than randomised controlled trials.  An indirect comparison was used to calculate relapse and treatment discontinuation rates.  Key outcomes of interest included relapse, discontinuation, treatment switching, side effects, quality-adjusted life years, and treatment and resource use costs.     RESULTS: The DES model captured outcomes that other modelling techniques would struggle to achieve.  Among these were patient time on/off different treatments, occurrence of side effects including post-injection syndrome, and the number of relapses and treatment discontinuations.  By modelling a real-world patient population, the evaluation generated patient-level findings directly relevant to clinical practice and accentuated the benefits of OLAI for reducing the risk of treatment discontinuation and in turn relapses.               CONCLUSIONS: Key modelling challenges for schizophrenia include capturing patient history and time-dependent variables such as relapse and discontinuation.  Real-world modelling to inform decision-making is growing in importance, and therefore requires the application of advanced simulation techniques.