OBJECTIVES: Raltegravir (Merck & Co., Inc.) is an inhibitor of HIV type 1 (HIV-1) integrase, and is the first drug in a new class of therapy known as the integrase inhibitors.  Raltegravir has already shown to be cost-effective in HIV treatment experienced patients in Hungary. The objective of the current study is to assess if the first line use of raltegravir is cost-effective compared to its use in rescue therapy from the Hungarian public payer perspective. METHODS: First line use of raltegravir was evaluated versus a protease inhibitor (PI) using a Markov model.  Raltegravir was also included as a 3rd line therapy within the model arm that initiates on a PI. The Markov process comprised a three stage continuous-time model representing successive HIV therapies over a patient's life-time. Patients moved between 18 health states - based on CD4 and HIV RNA levels.  Patients progressed to the next stage after they either failed current therapy or discontinued for toxicity reasons.  At any time, patients could develop acquired immunodeficiency syndrome (AIDS), suffer from a coronary heart disease (CHD) event and/or experience other adverse events.  Mortality was also captured in the model. RESULTS: The incremental cost-effectiveness ratio (ICER) for initiating therapy with raltegravir versus using it as a rescue therapy was 4,075 million HUF per quality adjusted life year gained (QALY), equivalent to $16,830/QALY.  The model predicted lower cumulative incidence of CHD in the raltegravir arm versus the PI arm. (15.1% versus 16.1%).  The model predicted that patients initiating on raltegravir therapy have longer life expectancy than patients starting with PI treatment over a 50-year time horizon (18.74 versus 17.17 years). CONCLUSIONS: Our long term economic model suggests that it is cost-effective to use raltegravir early in HIV therapy versus in patients who have experienced multiple failures.