OBJECTIVES: Atypical antipsychotic-induced weight gain and metabolic side effects are key contributors to discontinuations and relapses among patients with schizophrenia. Current treatment guidelines in Scotland recommend aripiprazole for adults with schizophrenia who are at risk of weight gain. Lurasidone is an atypical antipsychotic associated with a favourable metabolic side effect profile. The objective of this study was to conduct a cost-utility analysis to compare lurasidone with aripiprazole, and a budget impact analysis of introducing lurasidone treatment to patients with schizophrenia in the Scottish setting. METHODS: A 10-year Markov model, incorporating a 6-week acute phase and a maintenance phase across three health states (stable on treatment, stable not on treatment, and relapse), was constructed. Baseline risks of discontinuation and relapse were derived from lurasidone clinical studies. Relative efficacy was taken from indirect comparisons. Costs included: drug therapy; relapse; outpatient; primary and residential care. Utility estimates were taken from literature. The budget impact analysis considered the difference between the acquisition cost of lurasidone per patient per year (PPPY) and the acquisition costs PPPY of medicines estimated to be displaced by lurasidone, and assumed that the uptake rate of lurasidone would be approximately 66% of that seen for aripiprazole in its first five years in the UK. RESULTS: Lurasidone yielded a cost saving of £3,554 and a small quality-adjusted life-year (QALY) improvement compared with aripiprazole. Deterministic sensitivity analysis indicated that results were sensitive to relapse rates. Probabilistic sensitivity analysis suggested that lurasidone had the highest expected net benefit at all willingness-to-pay thresholds.  Lurasidone acquisition cost was £1,183 PPPY; the cost of displaced medicines was £1,182 PPPY. Lurasidone was therefore a budget neutral treatment option. CONCLUSIONS: Our analyses indicate that lurasidone is a clinically and cost-effective treatment option, which should have limited impact on prescribing budgets, when compared with aripiprazole.