OBJECTIVES: It is common for published models describing the treatment effectiveness of managing chronic hepatitis C (CHC) to assume those subjects achieving a sustained virologic response (SVR) attain a health utility of one; equivalent to perfect health. Our objective was to evaluate the impact of utilising age dependent utility weights on the cost effectiveness obtained in a CHC model. METHODS: A Markov model describing the natural history of CHC in patients with genotype 1 was developed to estimate the cost effectiveness of treatment with peginterferon α-2a plus ribavarin (PEG) versus interferon α-2b plus ribavarin (IFN). The model was populated with data and validated using a previously published cost effectiveness model. The model was re-calibrated using age dependent utility weights for patients achieving SVR and run over a lifetime taking a payer perspective, with both costs and benefits discounted at 3.5%. RESULTS: The cost per quality adjusted life years (QALYs) of PEG versus IFN obtained using age independent SVR disease state utility value of one (base case) were: $1713 for those aged 40 years, $3935 for those aged 50 years, $8612 for those aged 60 years, and $18,485 for those aged 70 years. The same analysis performed using age dependent utility values were: $2,373 for those aged 40 years, $5,931 for those aged 50 years, $14,924 for those aged 60 years, and $46,123 for those aged 70 years. CONCLUSIONS: Health utility is an important driver of cost effectiveness in CHC economic models. Compared to the base case, age dependent utility weights substantially increase the cost effectiveness ratios, particularly in patients aged 60 years or over. The assumption that patients attaining SVR have perfect health has the potential to bias decision making and there is, therefore, a need for future research that better describes the utility profile associated with subjects achieving SVR.