OBJECTIVES: Non-cystic fibrosis bronchiectasis (NCFBE) is a chronic, progressive inflammatory condition causing damage to bronchi. 40% of patients experience >2 exacerbations per year with increased healthcare utilization, cost and morbidity. Therapeutic strategies include maximizing drug delivery to target airways responsible for exacerbations. The objective of this study is to compare the cost-effectiveness (CE) of tobramycin versus azithromycin as first-line therapy to reduce exacerbations. METHODS: A decision tree model was developed for estimation of cost and outcome benefits of tobramycin and azithromycin from a US payer perspective with a 3-year time horizon. Total annual drug costs and probabilities for medication continuation, discontinuation and death were derived from a commercial claims database and published literature. Treatment effect (one year of life without increases in exacerbations) was estimated using quality-adjusted life years (QALY). CE analysis was conducted to estimate the incremental cost-effectiveness ratio (ICER) of tobramycin versus azithromycin per additional year of exacerbation management with continued utilization of either drug. Sensitivity analysis was conducted using one-way probabilistic analyses with 10% variation in all probabilities and costs. RESULTS: Total pharmaceutical costs accrued after 3 years among patients treated with tobramycin was estimated at $114,400 compared to azithromycin at $62,400. Life expectancy was 0.29 years lower among patients taking tobramycin. Azithromycin was the dominant strategy compared to tobramycin in the base case. Sensitivity analyses indicated pharmaceutical costs for azithromycin were most influential on the ICER. CONCLUSIONS: Tobramycin was not cost-effective due to higher cost and reduced capacity to prolong life years without discontinuation of medication in the management of severe exacerbations, compared to azithromycin. This study does not preclude clinical intervention via implementation of both medications in treatment pathways. Further research is needed to determine health economics and outcomes among patients treated with azithromycin and tobramycin as adjunct therapy in management of severe exacerbations.