OBJECTIVES Although ezetimbe/simvastatin (10/40 mg/day) combination therapy may have a superior cholesterol-lowering profile and be more cost effective than statin monotherapy, recent data suggest an increased risk of cancer. We estimate the cost-effectiveness of ezetimibe/simvastatin vs. simvastatin (40mg/day) monotherapy, evaluating the effect of this risk. METHODS A Markov model, employing a 1-year cycle, was employed to estimate the incremental cost, outcomes, and cost-effectiveness ratio (ICER) over a 5-year time horizon. Efficacy data were obtained from the Simvastatin and Ezetimibe in Aortic Stenosis (SEAS) study, the Scandinavian Simvastatin Survival Study, and the Heart Protection Study. Costs were estimated from fee schedules, diagnosis-related groups, and average wholesale prices. Utility weights were obtained from the peer-reviewed literature. All costs and outcomes after the first year were discounted 3% annually in the base-case. Deterministic and probabilistic sensitivity analyses were conducted to evaluate the effect of parameter uncertainty and assumptions on the model results. A cost-effectiveness acceptability curve displays the probability that ezetimibe/simvastatin is cost effective. RESULTS Ezetimibe/simvastatin was dominant (i.e., cost less, resulted in better outcomes) in the base-case scenario. For a 1 million-patient cohort, ezetimibe/simvastatin would cost $1,674,715,503 less than monotherapy and would result in 15,906 additional quality-adjusted life-years (QALYs). One-way sensitivity analyses indicate that higher incidence of cancer, lower monotherapy costs, and higher risk of myocardial infarction (MI) reduce the cost-effectiveness of ezetimibe/simvastatin substantially. According to probabilistic analyses, ezetimibe/simvastatin is cost-effective at $50,000/QALY only 36.7% of the time; even at a willingness-to-pay of $100,000/QALY, ezetimibe/simvastatin is cost effective less than 50% of the time. CONCLUSIONS Although our study suggests that simvastatin/ezetemibe treatment is cost effective, policy makers should interpret these results in light of possible uncertainty surrounding the incidence of cancer, incidence of myocardial infarction, and the true cost of simvastatin treatment following generic approval.