OBJECTIVES: Despite availability of current treatments, patients with chronic obstructive pulmonary disease (COPD), associated with chronic bronchitis, often experience life-threatening and costly exacerbations. The aim of this analysis was to assess the long-term costs and outcomes associated with different treatment options for the management of severe COPD in the UK. METHODS: A Markov cohort model was constructed to simulate decline from severe to very severe COPD (as defined by the NICE/GOLD guidelines), treatment regimen changes, and death. Community- and hospital-treated exacerbations were modelled as events within each health-state. A fully incremental cost-effectiveness analysis was conducted for LABA, LAMA, PDE-4 inhibitors, and ICS in various combinations. Transition probabilities for COPD progression were derived from published epidemiological sources. Relative rate ratios of exacerbations were taken from a recently published mixed treatment comparison. Direct costs were sourced from UK data, and health state utilities and exacerbation disutilities from the published literature. Analyses were conducted from the UK NHS perspective, based on a 30-year time horizon, with costs and outcomes discounted at 3.5% p.a. One-way and probabilistic sensitivity analyses were conducted. RESULTS: The cost-efficiency frontier suggests LAMA as the most effective monotherapy (£22,370, 5.421 QALYs). If patients continue to exacerbate, LAMA+LABA/ICS is a cost-effective second line option (£22,816, 5.484 QALYs, ICER £7,045/QALY), followed by LAMA+LABA/ICS+roflumilast (£23,230, 5.509 QALYs, ICER £16,566/QALY). For patients who are intolerant to (or decline) ICS, the addition of roflumilast to LAMA+LABA is a cost-effective treatment option (ICER £13,764/QALY). The results were consistent under a variety of assumptions. CONCLUSIONS: For severe COPD patients who continue to exacerbate, despite current standard of care, the addition of roflumilast to the treatment regimen is cost-effective in UK clinical practice. The addition of roflumilast in this manner is consistent with the step-wise treatment paradigm recommended in NICE guidelines.