OBJECTIVES: The objective of this research was  to assess the cost-effectiveness of Chondroitin Sulphate (CS) used as treatment of Osteoarthritis (OA) of the knee in mexican patients from the Mexican Public Health Institution perspective. METHODS: We developed a Markov analytical model for a cohort with 10 years to assess costs and benefits associated with the use of CS in the treatment of OA in Mexicans patients. Comparator for CS was normal care (gold standard treatment). Effectiveness measure was QALYs. These values were estimated by literature review validated by expert panel consensus. The direct costs, treatment of adverse events and  knee surgery in the treatment of OA were estimated. The unitary costs were obtained from the Mexican public health institutions. All costs were calculated in 2010 Mexican Pesos (MXP). Incremental-cost-effectiveness-ratios were expressed as cost per quality-adjusted-life-year (QALY). Costs and QALYs were discounted at 5%. Probabilistic sensitivity analyses via Monte Carlo simulations were undertaken to incorporate likely distributional properties of key model parameters. RESULTS: The QALYS increased with CS on 4.89 and with standard treatment on 4.73. Total treatment to include CS costs increased $25,470.13 MXP, resulting in an incremental cost per QALY in $158,587.77 MXP. This incremental cost utility is less than 1 Mexican PIB per capita. Deterministic and probabilistic sensitivity analyses showed the robustness of the results. CONCLUSIONS: CS is a cost efficient and useful for the treatment of OA in public health systems