OBJECTIVES: Healthcare payers must compare the value of alternative Alzheimer’s Disease (AD) treatments, but existing modeling frameworks are limited and focus primarily on delay to institutionalization. The Dependence Scale (DS) reflects the level of assistance AD patients require and is associated with AD progression (across cognitive, functional and behavioral domains), health-related quality of life (HRQOL), and direct medical and non-medical expenditures. Nonetheless, there are no established DS-based cost-effectiveness analysis (CEA) frameworks. We endeavored to fill this gap. METHODS: We developed a probabilistic state-transition simulation model that projects long-term cost-effectiveness based on DS changes. The model relates DS to HRQOL and cost using findings from Guo (2014) and Zhu (2015), respectively. The relationship between DS and mortality can be toggled, facilitating analysis of indirect treatment effects on survival. Outcomes include AD progression, life years, quality-adjusted life years (QALYs), and costs related to medication, inpatient and outpatient care, and informal caregiver time. To illustrate a model application, we evaluated a hypothetical oral agent for mild AD (baseline DS=3) that halves the DS progression rate while taken, is discontinued at a DS≥10, costs $500/month, and doesn’t impact mortality. Additional scenarios will be explored. RESULTS: Over a lifetime, monthly AD progression averaged 0.022 DS points (new treatment) and 0.045 DS points (standard care). The new treatment added 0.25 QALYs and increased costs by $19,200. Most of this cost increase reflects the new drug ($36,400); the biggest cost offsets were reduced caregiver time (-$12,300) and inpatient care (-$2,900). The hypothetical treatment was cost-effective in 14%, 52%, and 83% of simulation runs at willingness-to-pay thresholds of $50,000, $75,000, and $100,000 per QALY gained. CONCLUSIONS: Our DS-based modeling framework provides a new approach to evaluate the long-term comparative-effectiveness and cost-effectiveness of alternative AD strategies using an increasingly common trial endpoint associated with HRQOL and cost.