OBJECTIVES:   To examine the cost-utility of two diagnosis strategies utilizing a hypothetical neuroimaging tracer in patients with dementia of Alzheimer type relative to a standard diagnosis procedure from a Japanese payer's perspective. METHODS:   A cost-utility analysis was performed to evaluate the cost and outcomes associated with Dementia of Alzheimer Type (DAT), comparing DAT patients aged over 65 years on a standard clinical path to those on a hypothetical Positron Emission Tomography (PET) path. A decision tree structure was utilized to simulate follow-up through 20 years, and a state-transition Markov model was developed to estimate the long-term outcomes. Direct medical costs and quality-adjusted life-years (QALYs) were estimated for two diagnosis strategies: 1) PET for all patients, and 2) standard diagnosis. Model parameters were derived from the published literature, and National Health Insurance data. The model included effectiveness of drug treatment, and costs related to the treatment and post-progression care. The model results were examined using one-way sensitivity analysis. RESULTS:   Preliminary analyses indicate that total QALYs for the PET for all, and standard diagnosis strategies were 2.662 and 2.503, respectively. Estimated total costs were $23,931, and $21,630, respectively. The incremental cost effectiveness ratio (ICER) was estimated to be $14,401 per QALY gained. Sensitivity analyses suggest that the most influential parameters are the accuracy of PET tracer, effectiveness of drug treatment, and cost of care. When the hypothetical diagnostic drug is assumed to perform as good as standard diagnosis, the ICER increases to $97,058 per QALY. CONCLUSIONS:   These results suggest that the introduction of a PET tracer for this patient population is potentially cost-effective by common standards of willingness-to-pay in major developed nations. Ongoing efforts are focused on refining model inputs and implementing probabilistic sensitivity analysis.