OBJECTIVES: Cirrhosis and its complications, such as hepatic encephalopathy (HE) are the sixth cause of general mortality in Mexico. The objective is to update costs, time horizon and resources usage from a previous cost-effectiveness study for medications used to treat hepatic encephalopathy from the Mexican Institute of Social Security (IMSS) perspective and to complement it with a budget impact analysis METHODS: CE analysis of treatments used for acute HE, based in a decision tree model, and considering a  horizon of 10 days. Alternatives available at the IMSS are: lactulose, L-ornithine L-aspartate (LOLA), neomycin and alpha (a)polymorph rifaximin (the new alternative). Percentage of patients with improvement in signs and symptoms of HE was the effectiveness measure and s based on  available published studies(Huang 2007 and Qian 2009). Only direct medical costs were considered and obtained from  IMSS. Univariated sensitivity analysis, using pricing discounts  and effectiveness were performed and budget impact simulations were developed.   RESULTS: LOLA US$4024, lactulose US$4032, neomycin US$4060 and rifaximin US $4039 final costs. In relation to effectiveness, the percentage of patients who presented improved signs and symptoms for each alternative is as follows: lactulose and LOLA 55%, neomycin 64% and rifixamin 90%. Cost effectiveness ratios are: lactulose US$7331, LOLA $7316, neomycin US$6344 and rifixamin US$4488. The incremental cost effectiveness analysis indicates that LOLA and neomycin are surpassed by lactulose and rifaximin, which are located on the efficiency line. For the sensitivity analysis with one hospitalization day reduced due to the improved efficacy, rifaximin was the dominating alternative. If lactulose and neomycin are substituted by rifaximin in the estimated population(6,194 to 21,680 potential range of patients with HE in the Mexican Health System) , the budget impact shows savings equivalent to 77.74 y 72.36%, respectively  CONCLUSIONS: Alpha (a)  polymorph rifaximin  is a highly cost effective alternative for treating acute HE from an  institutional perspective in México.