OBJECTIVES: To estimate the cost-effectiveness of telaprevir in combination with peginterferon alpha and ribavirin (PR) compared to PR alone  in previously treated patients. METHODS: A cost-utility analysis based on previously published Markov models for chronic hepatitis C was used. Efficacy in the model was derived from results of randomized placebo controlled trial (REALIZE). REALIZE  compared telaprevir in combination with PR  to PR alone  in patients who failed previous treatment. The trial showed significantly higher response rates in the telaprevir patient cohort. Utility values corresponding to each health state in the model were obtained from a NICE Health technology Assessment and were combined with data from REALIZE. Local cost data sources were from published price lists, clinical guidelines, product labels and expert opinion (DELPHI panel). The effectiveness was measured in quality-adjusted life years (QALY). Time horizon was set at lifelong (100 years of age or till patient dies) and a payers’ perspective was adopted. Discount rate was 5% per year for both costs and effects according to actual Ministry of Health guidelines for health economic evaluation. Both one-way and probabilistic sensitivity analyses were performed. RESULTS: Incremental cost effectiveness ratio (ICER) for telaprevir in combination with PR compared to PR alone was 14 209 €/1 QALY. Costs for one life year saved (LYS) were 20 026 €/1 LYS. Model was most sensitive to price of telaprevir in deterministic sensitivity analysis. In probabilistic sensitivity analysis 75 % of simulations were below 26 650 €/1 QALY. CONCLUSIONS: Telaprevir in combination with PR is a cost-effective  compared to PR alone  for the treatment of chronic hepatitis C in patient who failed previous treatment with PR in a Slovakian health care system.