OBJECTIVES: Many patients infected with HCV genotype 1 (HCVG1) have not responded to therapy with peginterferon plus ribavirin (PR). In May 2011, the Brazilian Ministry of Health released guidelines for the treatment of patients with hepatitis C infection where the recommended retreatment regimen for HCVG1 infected patients is standard dose PR for 72 weeks. The extended compared to standard treatment duration improves sustained virologic response (SVR) rates in these patients. The aim of this study is to assess the cost effectiveness of this improved efficacy.  METHODS: We developed a Markov model to describe the clinical history of HCV infection in which cohorts of HCVG1 previously treated patients who didn't achieve sustained response receives standard dose PR for 48 or 72 weeks. Patients with detectable HCV RNA level at week 12 have their treatment interrupted. The patients are followed for their expected lifetime. The reference patient is 30-year-old with CHC without cirrhosis. The SVRs to 48 and 72 weeks cohorts came from RESPOND 2 and Jenssen DM et al, 2009 studies, respectively. Quality of life for each health state was based on literature. Costs for each health state were based on three Delphi panels (hepatologists, intensivists and oncologists). Costs in 2011 Brazilian Reais (BRL) and benefits were discounted at 3%.  RESULTS: The 72 weeks extended treatment increases life expectancy by 0.62 year and quality adjusted life years (QALY) by 0.95 year compared to standard treament. The incremental cost per life year gained is 3.423 BRL and the incremental cost per QALY is 2.232 BRL.   CONCLUSIONS: New drugs in development may further improve retreatment options, but until then the Brazilian Ministry of Health recommendation to extend the treatment to 72 weeks in HCV genotype 1 previously treated patients who didn’t achieve sustained response is cost-effective as compared with standard 48 weeks duration.