OBJECTIVES: In addition to medical treatment, deep brain stimulation (DBS) has become an alternative therapeutical option in advanced Parkinson’s disease, especially for motor complications such as dyskinesias or motor fluctuations. High initial costs of surgery and subsequent time-consuming maintenance procedures may be traded off by long-term gains in quality of life (HrQoL) compared to conventional medication treatment. This leads to the question whether DBS is cost effective compared to best medical treatment. METHODS: We present a lifetime Markov model for Parkinson’s disease, comparing deep brain stimulation vs. best medical treatment and estimating the impact on health-related quality of life. HrQoL was measured by the EQ-5D and cost from the societal perspective of Germany. Both were discounted with 3% p.a.. Data on DBS efficacy and adverse events were taken from clinical studies and published reports or meta-analyses. Key assumptions on the surgery procedure and its durability, its impact on cost and HrQoL, mortality, prevalence of motor complications as well as stage transition probabilities and the discount rate were investigated by one- and two-way sensitivity analyses. RESULTS: The incremental cost effectiveness ratio (ICER) for DBS was €42,183 per QALY gained. Incremental DBS costs were due to cost for surgery and subsequent battery change. HrQoL was improved and motor complications were reduced. The following variables had most impact in sensitivity analyses: utility improvement under DBS, drug and surgery cost, progression rates, and discount rate leading to varying ICERs between 20,064 and €58,147/QALY (the latter due to extreme and unlikely parameter combinations). CONCLUSIONS: Based on our decision analysis using current guidelines, DBS is likely to be cost-effective compared with other well-accepted health care technologies. We suggest to adopt DBS for patients with high drug cost or severe motor complications.