OBJECTIVES: About 5% of the population (400,000 in Austria) suffer from neuropathic pain. Fifty percent of them denominate their pain as “very strong”. Neuropathic pain patients consult on average 5 different doctors before the main diagnosis is found. The aim of this study was to evaluate the cost-effectiveness of treatment of neuropathic pain with topical Capsaicin Patch 8% versus current standard of care (pregabalin) in Austria. METHODS: The analysis was performed using a Decision Tree Model combined with a Markov model adapted for Austria. The model is based on an indirect comparison, which results in a conservative estimation, as the efficacy of capsaicin patch 8% is underestimated due to a large placebo effect. Efficacy assessment was based on the outcome measure QALY. Costs were captured for the year 2011. Resource use was determined by literature research and expert opinion and accurately reflects the Austrian treatment path. The study time horizon was 5 years. The analysis was performed from the perspective of social health insurance. The analysis was conducted according to Austrian Guidelines for Health Economic Evaluations. RESULTS: The results are shown for a time horizon of 5 years. The cost per patient (30% pain reduction) for capsaicin patch 8% amount to €4898 for a time horizon of 5 years and to €4745 for Pregabalin. Treatment with capsaicin patch 8% leads to 3.011 QALYs, treatment with Pregabalin to 2.964 QALYs. The cost per QALY is €1627 (capsaicin patch 8%) versus €1611 (Pregabalin) with an ICER of €2358. CONCLUSIONS: In Austria, the treatment of neuropathic pain with Capsaicin Patch 8% is a cost-effective alternative compared to Pregabalin from the perspective of the social health insurance.