OBJECTIVES An observational study comparing risedronate to alendronate (REAL) in a subgroup of postmenopausal osteoporotic (PMO) women with prior fracture demonstrated that treatment with risedronate reduced the incidence of hip fracture by 66% in the first year of treatment (Delmas, 2008). The objective of this analysis was to determine the cost-effectiveness of risedronate compared to alendronate at generic pricing using these effectiveness data in a high risk PMO population in the U.S. METHODS A validated Markov model of osteoporosis (Tosteson, 2001) was used to estimate the impact of therapy on hip fractures, costs, and quality-adjusted life years (QALYs). The model simulated a cohort of 1000 women ages 65+ with BMD≤-2.5 and a previous vertebral fracture, treated with risedronate or alendronate for one year. Associated costs and QALYs were tracked for an additional two years in each arm. Hip fracture incidence and mortality rates, as well as drug (generic alendronate 93.5% lower than risedronate) and hip fracture costs were extracted from published literature. RESULTS In a cohort of 1000 women treated with risedronate versus alendronate, the model predicted 25 fewer hip fractures and 8.41 additional QALYs, resulting in a cost savings of $330,378. Extrapolating to a population of PMO women with a prior vertebral fracture in the U.S. suggests that risedronate prevents over 114,000 fractures in roughly 4.6 million women at cost savings of over $1,515 million. A sensitivity analysis assuming treatment for 2 years and parity efficacy in year 2 resulted in a cost per QALY gained for earlier fracture protection of $9925 (cost per fracture averted: $3419) when treating with risedronate versus alendronate in the population 65+. Risedronate remains cost-saving in the 80+ population. CONCLUSIONS Based on "real world" data this analysis suggests risedronate's early fracture protection results in favorable cost-effectiveness versus generic alendronate despite its higher drug cost.