OBJECTIVES: CML is a malignant blood disease. Imatinib 400mg daily is currently recommended in newly diagnosed CML patients. Compared to imatinib, dasatinib 100mg daily has been shown to offer significant improvements in clinical efficacy but its cost-effectiveness compared to imatinib has not been assessed in this patient group. METHODS: A partitioned survival/costing model was developed to estimate the lifetime costs and benefits associated with dasatinib and imatinib for a UK health service perspective using a lifetime horizon and monthly cycles. Individuals could switch from first to second line treatment at 3, 12 or 18 months for reasons of inadequate clinical response and monthly for all other reasons. Response category specific survival was based on long-term data from IRIS clinical trial and response rates from a recent network-meta-analysis. Utility and resource use data were taken from UK based studies and all unit/drug costs were taken from national databases and discounted at 3.5% per annum. Probabilistic and deterministic sensitivity analyses were conducted to estimate the confidence around the results. Outcomes are reported via incremental cost-effectiveness ratios (ICERs), benefit is expressed as quality adjusted life years (QALYs). RESULTS: Compared to imatinib, dasatinib offered an additional 0.71 QALYs (95% CI -0.15, 1.68) but incurred £17,646 of additional costs (95% CI -£24,259, £57,947). The ICER was therefore £24,922/QALY gained. At a threshold of £30,000/QALY gained, dasatinib had a 62.6% probability of being cost-effective. Deterministic analysis showed that the model was sensitive to changes in the 12-month response probabilities and drug costs. When trial observed dose intensities were used, the ICER was £13,400/QALY gained. The model was robust to changes in adverse event rates/ costs, and utility estimates. CONCLUSIONS: Dasatinib has been shown to be clinically superior to imatinib in newly diagnosed CML patients and is a cost-effective alternative to imatinib in this patient group.