OBJECTIVES: Six pharmacological agents are FDA-approved to treat urinary incontinence, a condition that has economic costs of $19 billion US dollars per year. This study compares the recently FDA-approved fesoterodine to generic oxybutynin extended-release (ER) to identify which agent is more cost-effective in the treatment of urinary incontinence for three months in women over age 60 from the third party payer perspective. METHODS: A search was conducted using the MEDLINE Database from 1980-2009 for the terms “oxybutynin,” “fesoterodine,” “randomized controlled trial,” and “urinary incontinence.” Five articles evaluating clinical improvement among a predominantly female population were identified for inclusion. For the purpose of this analysis, an effectively treated patient was defined as a patient demonstrating a decrease of 14 or more episodes per week of each of the following: urge incontinence, total incontinence, and micturitions. Using Z-scores, the percentage of effectively treated patients was calculated for both fesoterodine and generic oxybutynin ER. Costs included a physician visit for patients failing treatment and the average wholesale price of each medication in 2009 US dollars. Data and costs associated with each treatment arm were entered into TreeAge Pro 2008 to obtain the cost-effectiveness ratios for both therapies. RESULTS: Overall cost-effectiveness ratios obtained were $375.27 ($297.59/0.793) per effectively treated patient with oxybutynin ER compared to $641.67 ($435.01/0.678) per effectively treated patient with fesoterodine. Due to the greater effect and lower cost of oxybutynin ER, an incremental cost-effectiveness ratio was not necessary. Sensitivity analyses revealed the results to be most sensitive to changes in the probability of oxybutynin ER resulting in an effectively treated patient. CONCLUSIONS: Based on this decision model, oxybutynin ER is the dominant treatment. Third-party payers may want to consider making oxybutynin ER a preferred option for their formularies, rather than fesoterodine.