OBJECTIVES: Iliac Crest Bone Graft (ICBG) is a commonly used bone graft material in lumbar spinal fusion procedures. Demineralised Bone Matrix (DBM) added to supplement Local Bone (LB) provides an alternative graft material that does not require a secondary surgery site to harvest iliac crest bone. The objective of this study was to investigate the economic impact associated with the use of DBM in lumbar spinal fusion procedures in the UK. METHODS: A decision tree model was developed to evaluate the two-year budget impact associated with adding DBM as an alternative bone graft material in the lumbar spinal fusion surgical procedure. The model structure was based on previously published economic models, identified via a structured literature search, and compares surgical treatment with either ICBG or DBM added to the LB procedure. The model includes the costs of the surgical procedures, for adverse events and for treatment failure (reoperations). Further, the model was validated by UK clinical experts to ensure its adherence to UK clinical practice. The model population included UK-based patients with lumbar degenerative disc disease (LDDD) considered eligible for lumbar spinal fusion with either LB or ICBG. In the model's base-case analysis, ICBG was compared with DBM added to LB. RESULTS: The model predicts cost-savings of £44 467 over two years when adding DBM to LB compared with using ICBG alone for the lumbar spinal fusion procedure in a hypothetical population of 100 patients. The cost-savings are realised through reduced surgical time and fewer adverse events associated with surgery. CONCLUSIONS: In a defined population of spinal fusion patients in the UK that would otherwise be treated with ICBG, the addition of DBM to LB presents an economically viable and potentially cost-saving clinically appropriate treatment option.