Objective: To estimate the cost-effectiveness of pregabalin compared to gabapentin for patients with postherpetic neuralgia(PHN) in a Swedish setting. Methods: This cost-effectiveness analysis is conducted from a societal perspective (direct and indirect costs) and from a health care perspective (direct costs only). Direct costs include pharmaceuticals and physician visits. Indirect costs are calculated based on production losses (the human capital approach). The analysis uses a cost-effectiveness model which includes effect data from two clinical studies of gabapentin and one clinical study of pregabalin previously used in a Canadian cost-effectiveness analysis. In addition, the analysis and treatment doses are partly based on two clinical studies of pregabalin and gabapentin. Resource use is based on time spent in each pain state (mild, moderate, and severe). In the sensitivity analysis drug doses, costs, and quality of life weights were varied. Information regarding costs, resource use, and quality of life weights was collected from the Canadian study, Statistics Sweden, regional price lists, Pharmaceutical Specialties in Sweden, and from three burden of illness studies. Dr. Jörgen Boivie was consulted regarding Swedish treatment practice. Results: Since patients treated with pregabalin spend less time in the more severe pain states their health in terms of QALY's is better compared to patients treated with gabapentin (0.5019 vs. 0.4596). In the societal perspective analysis, total costs of one year treatment were lower for pregabalin than for gabapentin (SEK100 476 vs. SEK102 103). Total costs were only slightly higher for pregabalin (SEK57,811 vs. SEK52 645) and the cost per QALY gained was estimated to be SEK120,000 when indirect costs were excluded. Conclusion: The study shows that pregabalin is a cost-effective and, from a societal perspective, a cost-saving alternative compared to gabapentin in treatment of patients with PHN.