OBJECTIVES: Irritable bowel syndrome (IBS) is a functional gastrointestinal disorder prevalent in up to 35% of the adult population in Mexico, thus rendering high costs for health institutions. Tegaserod, a 5-HT4 receptor agonist approved for the treatment of IBS, could potentially render a beneficial economic impact. An economic evaluation was performed to assess the economic impact of treating IBS patients with tegaserod in comparison to standard therapy in an institutional setting in Mexico. METHODS: A cost-effectiveness analysis was performed within an institutional setting (Mexican Institute of Social Security, IMSS). The drug comparator used was butylhyoscine, as it is the recommended standard therapy available in the National Formulary, as published in the institution's IBS clinical guidelines. Resource utilization data was obtained from previous studies; physician consults, drug usage, laboratory tests, endoscopic procedures, non-endoscopic diagnostic procedures, and surgical procedures were used for the analysis; a triangular probability distribution was used. Efficacy data was obtained from published meta-analysis studies. The source of the unit costs was the institution, current for 2009. Discount rate was not used because the time horizon was for 1 year. A probabilistic sensibility analysis was obtained through a Monte Carlo simulation with 100,000 iterations in the weakest parameters. RESULTS: The expected annual cost with standard therapy was $19,431.92 per patient in local currencies (Mexican Pesos, MXP), as compared to $18,394.68 with tegaserod therapy. Tegaserod was more effective than the standard therapy. Probabilistic sensibility analysis showed the same conclusions, regardless of the variability in resource utilization and efficacy. CONCLUSIONS: From an institutional perspective in Mexico, tegaserod is a cost-effective therapeutic option (dominant) for the treatment of IBS in comparison with the current standard therapy featured in the National Formulary.