OBJECTIVES: The objective of this study was to build a decision analytic model to estimate the cost and effectiveness of allopurinol 300mg/d and febuxostat 80mg/d as a first line treatment for gout patients based on available clinical and cost data. METHODS: We built a decision analytic model as a decision tree using TreeAge Pro 2009, in which allopurinol was compared to febuxostat as a first line treatment for gout. The model examined two time horizons: 1-8 weeks and 9-52 weeks. Treatment success from week 1-8 was defined as no case of gout flare. If a gout flare occurred within week 1-8 there was an equal chance of continuing on treatment or switching to the alternative treatment strategy during weeks 9-52. During weeks 9-52 treatment failure occurred with report of a gout flare. Treatment failure due to gout flare was assumed to result in an additional physician visit. Costs of adverse events (musculoskeletal, joint-related signs and symptoms, liver function test abnormalities) from treatment were accounted for and assumed to result in a doctor visit. Data used to construct the economic model were derived from published clinical trials as well as available sources of physician and drug costs. Sensitivity analyses were preformed to assess the impact of variations on all model inputs. RESULTS: Total cost of allopurinol as a first line treatment for gout was $1125 compared to $7737 for febuxostat as a first line treatment for gout. Sensitivity analyses indicate the model is most sensitive to pill price. All else equal, a monthly supply of febuxostat would need to cost less then $3 to be as cost-effective as allopurinol.  CONCLUSIONS: Allopurinol was $6612 less as a first line treatment compared to febuxostat and therefore the cost effective treatment and as such should remain a first line treatment.