BACKGROUND: Although 99% of ethical drugs are covered by National Health Insurance System (NHIS) in Japan, smoking cessation therapy was not reimbursed until 2006. When it was decided to be covered by NHIS, government required epidemiological survey that evaluate the effectiveness and cost-effectiveness of smoking cessation therapy. OBJECTIVES: To conduct a cost-utility analysis by comparing smoking cessation counseling therapy with nicotine-patch, covered by NHIS, versus no-treatment. METHODS: We have already developed Markov-model to analyse life-time medical costs and Quality-Adjusted Life Years (QALYs) of various smoking cessation therapy from the perspective of healthcare payers in 2004, we conducted this analysis by applying success rates and treatment costs of both arms to our model. In our Markov model, 5 years were set as one cycle. Both cost and utility were discounted at 3% annually. The cohort of smokers was classified by gender and age, and we assumed that smokers started smoking aged 20 years and received smoking cessation therapy aged 30, 40, 50, 60 or 70 years. The healthcare cost and QALYs were calculated throughout the term until aged 90 years. Success rate (The proportion of patients who succeeded to quit smoking for 1 year) of smoking cessation counseling therapy with nicotine-patch arm are derived from epidemiological survey. It was 32.6% for overall patients. Success rate for doing nothing arms was 4.2%, according to other RCT. Treatment cost for smoking cessation counseling therapy with nicotine-patch arm and no-treatment arm was JPY31,806 (US$318, US$1=JPY100). RESULTS: It was shown that smoking cessation consultation therapy with nicotine-patch is dominant, that is, more effective and less costly than no-treatment. It would save direct medical costs of JPY 169,000 (US$1,690) and increase 0.225 QALY in male smokers. In female smokers, it would save direct medical costs of JPY 108,000 (US$1,080) and increase 0.182 QALY Sensitivity analyses suggested the robustness of the results. CONCLUSIONS: Smoking cessation consultation therapy with nicotine-patch under NHIS would be cost-effective.