OBJECTIVES Combining various antiretroviral agents into one single pill has been a strategy to reduce the pill burden thus enhance medication adherence among HIV/AIDS patients. The study aims to analyze the cost effectiveness and cost utility of the co-formulated fixed dose (FXD) strategy over multiple free dose combination (FRC) of antiretroviral agents from a healthcare system's perspective. METHODS The Medical Expenditure Panel Survey (MEPS; 2001-2006) was used to identify HIV/AIDS patients (ICD-9-CM code 042, 043, V08) on at least one active antiretroviral medication. Patients on FXD were matched in 1:1 ratio with FRC group using propensity score method. All medical costs excluding those paid by patients and families were included. A patient without any ER visit was taken as the effectiveness measure. Utility was measured using SF-6D scores based on the SF-12 questionnaire. RESULTS Nine FXD formulations were in the market from the period from 2001 to 2006. One hundred and seventy HIV patients were identified as study population of which 53% (n=92) were on at least one FXD formulation during the study period. Upon matching, 70 patients from FXD had a match from the FRC group. Both groups had no significant differences in terms of socio-demographic characteristics and health status. Fifty three patients (76.09%) in FXD did not have an ER visit versus 46 (65.82%) in the FRC. The mean annual cost for FXD patients was $15,749.91 and $11,890.01 for FRC patients. The mean utility for FXD group was 0.6741 and 0.6112 for FRC group. The Incremental cost-utility ratio for the FXD treatment over FRC treatment was $45,586.13 per QALY. CONCLUSIONS This study concludes that co-formulating antiretroviral drugs in a combination therapy enhances the quality of life in HIV/AIDS patients and is cost effective as per the generally accepted threshold of $50k per QALY.