OBJECTIVES: Raltegravir, an integrase inhibitor of HIV-1, is approved for use in both treatment naïve and treatment experienced HIV-1 infected patients. In Sweden, raltegravir is reimbursed for patients with documented drug resistance and used predominately in heavily treated experienced patients. This study aims to investigate the cost-effectiveness of using raltegravir in treatment naïve patients versus using raltegravir as a salvage treatment. METHODS: A three-stage continuous-time Markov model representing successive HIV therapies was developed to predict the costs and quality-adjusted life years (QALYs) over a 50-year time horizon. Patients progressed to the next stage in the model as they failed or discontinued the current therapy for toxicity reasons. In each stage patients moved between 18 health states based on CD4 and HIV RNA levels. At anytime patients could die, suffer coronary heart disease or develop acquired immunodeficiency syndrome (AIDS). Initiation on a raltegravir-based regimen was evaluated versus initiation on a protease inhibitor (PI)-based regimen. During the second stage patients received a non-nucleoside reverse transcriptase inhibitor based regimen. Patients initiating on raltegravir progressing to the third stage received optimized salvage therapy (OT) whereas patients initiating on a PI received OT plus raltegravir. Data on effectiveness was gathered from randomized clinical trials and an HIV/AIDS database. Utilities and health care resource use were gathered from the literature and adapted to Swedish situation using expert opinion. RESULTS: Raltegravir-initiating treatment strategy offered longer undiscounted life expectancy compared to PI initiating strategy [20.51 vs. 18.60 years]. The incremental cost-utility ratio for using raltegravir in treatment naïve patients versus using raltegravir as a salvage treatment was 85 182 SEK per QALY ($12,564/QALY). Results were sensitive to analytical time horizon. CONCLUSIONS: Given the data and methods used, the model suggests that using raltegravir in treatment naïve patients compared to using raltegravir as a salvage therapy is cost-effective.