OBJECTIVES: COPD is a disease that is characterized by chronic and progressive restriction of the airflow. The cost of COPD medications can be reduced significantly by implementing a treatment algorithm that is consistent with the GOLD guidelines. Indacaterol and tiotrpium administered by inhalation are indicated for maintenance treatment of COPD in Turkey. We aimed to compare, from the perspective of the Turkish social security institution, the cost-effectiveness of indacaterol 150 mcg once daily and long-acting tiotropium 18 mcg once daily at months 3 and 6 in patients with moderate to severe COPD aged 30 years and above. METHODS: From payer perspective, a cost-effectiveness analysis based on two separate clinical trials (INTENSITY-once daily indacaterol and tiotropium vs. placebo and INHANCE- indacaterol vs tiotropium) was performed. The primary endpoints of the clinical trials (Trough FEV, Transition Dyspnea Index [TDI] and Saint Georges Respiratory Questionnaire [SGRQ]) were included in the cost-effectiveness analysis. Incremental cost effectiveness ratio (ICER) of indacaterol vs. tiotropium for different treatment success criteria (week 12 FEV >0.12L increase, ≥1 improvement in TDI score, ≥4 decrease in SGRQ score) were compared. Incremental cost effectiveness ratios were calculated over incremental differences versus placebo. Probabilistic sensitivity analysis was performed using the Bootstrap method.  RESULTS: FEVsuccess rates at month 3 for indacaterol and ipratropium were 26.5% and 24.3%, respectively. At month 3, ICERs of indacaterol versus ipratropium were -1002TL for FEV, -434TL for TDI and -878TL for SGRQ. At month 6, FEVsuccess rates were 54.8 and 47.4%, TDI success rates were 58.7% and 54.4% and SGRQ success rates were 81.8% and 77.1%, respectively. ICERs of indacaterol versus ipratropium at month 6 were -616TL for FEV, -1049TL for TDI and -1014TL for SGRQ  CONCLUSIONS: Based on this clinical trial-based analysis, indacaterol was cost effective treatment and cost reducing choice vs. tiotroprium in COPD treatment.