OBJECTIVES Chronic myelogenous leukaemia (CML) is a progressive disease associated with a significant burden on both the patient and the healthcare provider. Although durable response from imatinib is achievable for many patients, some develop resistance or intolerance. In these patients, other tyrosine kinase inhibitors (TKIs), such as dasatinib and nilotinib are treatment options. This study uses outputs from recent clinical trials evaluating TKIs to predict the long-term economic and cost outcomes associated with different levels of best response. METHODS A Markov model was developed to estimate the costs and health outcomes associated with chronic, accelerated and blast phase CML. Short-term response was defined as ‘no response' (NR), ‘complete haematological response' (CHR), partial cytogenetic response (PCR) and complete cytogenetic response (CCR). Resource use and quality-adjusted life year (QALY) scores were stratified according to the patient's current health status and response level. RESULTS Patients in the chronic phase who achieve no response are estimated to experience a total of 1.50 QALYs and incur costs of £57,867 over their lifetime. Those who achieve CHR, PCR and CCR experience 3.47, 7.31 and 10.17 QALYs, and costs of £62,617, £66,499 and £67,117 respectively. In the accelerated phase, the total number of QALYs for the NR, CHR, PCR and CCR groups were 0.71, 1.70, 1.57 and 4.10 respectively. For the same groups, the lifetime costs were £35,273, £35,850, £35,886 and £51,693. In the blast phase, the QALY outcomes for the four groups were 0.18, 0.41, 0.63 and 1.46, whilst the costs were £13,252, £7,109, £10,993 and £25,501 respectively. CONCLUSIONS There is a strong apparent relationship between short-term response to treatment and long-term outcomes in CML. These findings are likely to be useful in assessing the cost-effectiveness of existing treatments, whose short-term response is known, but where long-term data are currently unavailable.