OBJECTIVES: The use of strong opioid analgesics to treat severe chronic pain is associated with adverse events (AEs) and treatment discontinuations, which can increase the overall cost of treatment. New interventions with more favourable safety profiles could reduce these costs. An economic model was constructed to investigate the potential budget savings associated with the introduction of an intervention with increased tolerability to a formulary. METHODS: A prevalence-based, deterministic budget impact model with a five-year time horizon was developed from the perspective of a UK health care budget-holder. The model takes into account drug acquisition, AE and discontinuation costs associated with the five most frequently-used strong opioid analgesics (WHO step 3) in the UK. Cost and usage data were derived from the British National Formulary, market research studies and physician interviews. AE and discontinuation rates were derived from published studies. RESULTS: In a theoretical population of 100,000 individuals, the model estimated that 205 patients experienced severe chronic pain and subsequently received strong opioid analgesics. The overall annual cost of treating these patients with currently-available strong opioid analgesics was estimated to be £152,426, 62% of which was spent managing AEs and discontinuations. Over five years, the model showed that if 50% of patients received an alternative strong analgesic which reduces the number of AEs and discontinuations by 25% (compared to currently-used strong opioid analgesics), there would be 198 fewer AEs and 58 fewer discontinuations. This would result in a cost saving of £51,985. CONCLUSIONS: The cost of managing AEs and discontinuations is a significant contributor to the overall treatment cost associated with strong opioid analgesics. New treatments with improved safety profiles may reduce the economic burden of managing AEs and discontinuations associated with the use of strong opioid analgesics. This may partially or even completely offset any potential increase in acquisition costs.