OBJECTIVES: A recent meta-analysis has shown that escitalopram, a selective inhibitor of serotonin reuptake, is one of the best choices when starting a treatment of moderate to severe major depressive disorder (MDD), with a favourable balance between efficacy and tolerability. Our objective was to perform an economic evaluation of escitalopram versus citalopram in Israel. Citalopram is available as a generic drug and is included in the National Health Basket. METHODS: A decision tree model was used to assess the cost-utility of escitalopram versus citalopram in first-line treatment of MDD. The model also accounted for second-, third- and fourth-line treatments for patients not responding to therapy, with an overall time horizon of 12 months. The analysis adopted a Health Maintenance Organization perspective. The main outcomes were quality-adjusted life years (QALYs) and costs associated with local healthcare resource use (including drug use, and hospitalizations due to depression or suicide attempt). One-way and two-way sensitivity analyses were performed with the following parameters: probabilities of remission after initial and subsequent treatment, probabilities of relapse, suicide attempt and suicide-related death, number of hospitalization days due to a suicide attempt, costs of initial and subsequent treatments and utility values. In addition, we used a Monte Carlo simulation. RESULTS: Compared to citalopram, escitalopram was more effective in terms of QALYs at a small incremental cost. The average QALYs of patients treated with escitalopram and citalopram were 0.728 and 0.720 respectively. The average cost of patients treated with escitalopram and citalopram were €105 and €63 respectively. The incremental cost-utility ratio was €5,150 (NIS23,875) per QALY. The variation of remission rates had the most influence on this ratio in the sensitivity analyses. CONCLUSIONS: This local economic evaluation shows that compared to citalopram, escitalopram should be the preferred option in depression in Israel with an acceptable cost per QALY.