OBJECTIVES: Bipolar disorder imposes high economic burden, with direct costs estimated at $30.7 billion. Lurasidone is an atypical antipsychotic approved for the treatment of depressive episodes associated with bipolar I disorder. The objective of this study was to compare the cost-effectiveness of lurasidone and quetiapine XR in patients with bipolar depression. METHODS: A cost-effectiveness model was developed to compare lurasidone to quetiapine XR over a 3-month time horizon from a US payer perspective. Effectiveness inputs were based on indirect comparison of the proportion of patients achieving remission (MADRS total score ≤12 by week 6-8), obtained from lurasidone and quetiapine XR pivotal trials versus placebo. Resource utilization (emergency room visits, hospitalizations, and office visits) were obtained from an expert panel study. Drug costs were estimated using mean dose from clinical trials and wholesale acquisition costs. Costs of resources were obtained from a retrospective database study of bipolar depression patients. Model results were tested using deterministic and probabilistic sensitivity analyses. RESULTS: Over the 3-month time horizon of the model, 52.0% of lurasidone patients achieved remission versus 43.2% of quetiapine XR patients.  Mean emergency room visits, inpatient days, and office visits were lower for lurasidone patients (0.48, 2.1, 9.3) than quetiapine XR patients (0.50, 2.2, 9.6), respectively. Total costs were lower for lurasidone patients ($4,447) than quetiapine XR patients ($4,546). Cost-effectiveness results showed that lurasidone was dominant over quetiapine XR. Model testing showed that the results were robust to changes in other parameters.  One-way sensitivity analysis showed that the model may be sensitive to the drug cost/month, remission rate, or hospital cost/day.  Probabilistic sensitivity analyses showed lurasidone has a 97.4% probability of being cost-effective compared to quetiapine XR at a willingness-to-pay threshold of $5,000 per remission. CONCLUSIONS: Based on this model, lurasidone is cost-effective compared to quetiapine XR in patients with bipolar depression.