OBJECTIVES: Adverse events (AEs) and premature treatment discontinuation of protease inhibitor (PI) therapy in the treatment of chronic hepatitis C (CHC) may mitigate the benefits of improved sustained virologic response.  We use data from a recent study to estimate the economic impact of PI therapy in the cirrhotic non-responder population. METHODS: In the Compassionate Use of Protease Inhibitors in viral C cirrhosis (CUPIC) study, patients with compensated cirrhosis and genotype 1 CHC were treated with boceprevir (n=205) or telaprevir (n=292) in combination with peginterferon alpha and ribavirin. The investigators reported safety and tolerability in an interim 16-week analysis. Using CUPIC data and micro-costing technique, we estimate the costs of treatment-related hematologic and rash AEs by severity (Grades 2-4) and the cost of drug wastage using PI discontinuation rates due to serious AEs (SAEs) (7.3% boceprevir; 14.7% telaprevir). We surveyed 3 hepatologists to ascertain treatment patterns related to AEs and combined these estimates with cost data to compute mean costs per treatment group from the US payer perspective during the first 16 weeks of therapy.  RESULTS: The AE-related costs were $1,980 and $2,161 for telaprevir and boceprevir treated patients, respectively, for the first 28 days of treatment. Medication-related costs of premature discontinuation due to SAEs were estimated at $8,463 for telaprevir and $1,575 for boceprevir. Total costs of AE and discontinuation were $10,443 and $3,736 for telaprevir and boceprevir treated groups, respectively. The results were not sensitive to variation in treatment practices and costs. CONCLUSIONS: The costs of treatment of cirrhotic non-responders during the first 16 weeks were estimated to increase by 18% over triple therapy costs due to AEs. These data indicate that the total cost per cure may be substantially higher than the drug costs and underscore the importance of evaluating total cost of HCV treatment when selecting new agents.