OBJECTIVES: To compare expected clinical outcomes and economic costs in patients with chronic schizophrenia (including schizoaffective disorders) who are treated with second-generation antipsychotics (SGAs). METHODS: Using a Markov simulation model, we estimated expected clinical outcomes and economic costs over one year in patients receiving SGAs (i.e., aripiprazole, asenapine, iloperidone, olanzapine, quetiapine, risperidone, or ziprasidone) for treatment of schizophrenia (including schizoaffective disorders).  All SGAs were assumed to have equal efficacy, and to differ only with respect to their side effects and costs.  Side effects considered included extrapyramidal symptoms (EPS), prolactin disorders, diabetes, weight gain, metabolic syndrome, akathisia, sedation, somnolence, nausea/vomiting, and QTc interval prolongation.  Outcomes considered included the probability of therapy discontinuation due to side effects, and expected duration of therapy.  Costs included those of SGAs (only risperidone was assumed available generically), treatment of side effects, and all psychiatric care (including relapse), and were estimated from the perspective of the US healthcare system (2010 US dollars).  The periodicity of the model was one month.  The model was run for a hypothetical cohort of 25,000 patients.  Patients were followed in the model until therapy discontinuation, death, or one year, whichever occurred first. RESULTS: Over one year, the number of patients estimated to discontinue therapy ranged from 42% (ziprasidone) to 70% (olanzapine), and expected mean duration of therapy ranged from 6.7 months (risperidone) to 8.6 months (ziprasidone).  Total monthly costs of psychiatric care ranged from $2718 (risperidone) to $3352 (olanzapine).  Expected adherence with treatment was higher, and, with the exception of risperidone, which was generically available, costs of care were lower, for agents with better tolerability. CONCLUSIONS: Tolerability is an important determinant of adherence with SGAs and also total costs of psychiatric care.