OBJECTIVES: Generalized Anxiety Disorder (GAD) affects around 6.8 million U.S. adults. It places a considerable economic burden upon patients and payers alike. Selective serotonin reuptake inhibitors (SSRIs) are among the first-line therapy for treating GAD. Currently, Escitalopram and Paroxetine are the only SSRIs approved by U.S. FDA for treating GAD. To assess, from a third party payer’s perspective, the cost-effectiveness of Escitalopram and Paroxetine in the treatment of GAD in the U.S.  METHODS: A decision analytic model with a 12 month time horizon, adapted to the U.S. setting was constructed. Outcome measured as a reduction in Hamilton Anxiety Scale (HAMA) scores, and adverse event probabilities were obtained from a head-to-head randomized trial. Resource utilization and associated costs were estimated from standard national sources. Analyses from a third party payer’s perspective focused on the direct medical cost of treatment e.g. drugs, physician visits and dispensing cost. Annual cost per person for the treatment was calculated and the cost-effectiveness of the treatment options was measured. All costs were reported in 2013 US Dollars. Cost-effectiveness was expressed as the incremental cost-effectiveness ratio (ICER). Sensitivity analysis on key input parameters and Monte Carlo simulation was performed to measure the robustness of the model.    RESULTS: Escitalopram dominated Paroxetine by having both, lower total annual cost ($4587 vs. $5243, respectively) and better outcomes (14 HAMA vs. 13 HAMA point reduction, respectively).The ICER was found to be -$656/HAMA point which indicates improved effectiveness along with reduction in costs by adopting Escitalopram over Paroxetine. Sensitivity analysis demonstrated the robustness of the model. CONCLUSIONS: Escitalopram appears to be cost-effective compared with Paroxetine in treatment of GAD in the U.S. from a third party payer’s perspective.