Objective: Tipranavir plus ritonavir (TPV/r) and an optimized background (OB) antiretroviral regimen delays virologic failure, reduces viral load and increases CD4 count compared to patients treated with comparator protease inhibitors, co-administered with ritonavir (CPI/r) and OB alone. The objective was to investigate the long-term cost, outcomes and cost-effectiveness of TPV/r + OB compared to CPI/r + OB in the Canadian health care system. Methods: A Markov model was developed and populated with information on 48-week viral load and CD4 cell count response from two randomized controlled trials (RESIST 1 and RESIST 2) and HAART-era published literature. Resource use and cost data was obtained from a Canadian study and published sources. Future costs and outcomes were discounted at 5%. The analysis calculated costs and outcomes from time of starting these regimens, until 90% of patients in each strategy had died (lifetime analysis). Cost-effectiveness was calculated as cost per life year (LY) gained and cost per quality-adjusted life year (QALY) gained. Results: Total discounted lifetime costs for TPV/r +OB was $221,541 compared to $194,466 with CPI+OB. discounted life expectancy and QALYs were greater for TPV/r+OB compared to CPI/r+OB by 0.530 yrs and 0.516 QALYs, respectively. Incremental cost-effectiveness of TPR/r+OB was $51,058 per LY gained and $52,517 per QALY gained. Sensitivity analysis showed results were robust. Conclusion: TPV/r+OB provides superior clinical improvement to a population of highly treated HIV patients with limited treatment options. TPV/r+OB is predicted to improve life expectancy and QALYs compared to CPI/r+OB with an incremental cost per additional year of life gained of $51,058 and the incremental cost per QALY of $52,517.