OBJECTIVES: Dabigatran was approved in the United States to reduce the risk of stroke and systemic embolism in patients with non-valvular atrial fibrillation (AF).  Dabigatran has several potential advantages over the current standard of care (warfarin), including a generally better side effect profile, fewer drug interactions, and no international normalized ratio (INR) monitoring, but it is considerably more expensive.  The objective of this analysis was to determine the cost-effectiveness of dabigatran versus warfarin for AF in a Medicare population. METHODS: A Markov model was used to simulate outcomes for patients aged 65 with AF and a (CHADS2) congestive heart failure, hypertension, age, diabetes, prior stroke [doubled] score ≥1.  A 5-year time horizon and a managed care perspective were employed in this analysis.  Data comparing the clinical performance of dabigatran and warfarin was derived from the RE-LY trial. Quality-adjusted life-years (QALYs) were used to assess outcomes and utility weights were obtained from systematic reviews.  Direct medical costs associated with complications from AF were based on hospitalization costs for diagnostic-related groups and reported in U.S. 2011 dollars.  RESULTS: Over a 5-year period, the incremental cost-effectiveness ratio (ICER) for dabigatran 150 mg was $26,551 per QALY compared to warfarin.  The ICER was most sensitive to the utility associated with the well state for each of the alternatives as well as the price of dabigatran, warfarin, and INR monitoring needed for warfarin therapy.  In probabilistic analyses, dabigatran was cost-effective in 91% of simulations at a $50,000/QALY threshold. CONCLUSIONS: Prescribing dabigatran increases quality-adjusted life expectancy for AF patients at a cost considered acceptable by American payers.