OBJECTIVES: Perform a cost-effectiveness analysis of paliperidone palmitate, for the treatment of patients with schizophrenia in Mexico, from the perspective of public healthcare providers METHODS: A Markov model with monthly cycles was developed based on the natural history of disease, to simulate cohorts of patients treated with paliperidone palmitate (PP), risperidone long-acting injectable (RIS) or oral olanzapine (OLZ), over a ten year horizon. The model captured clinical and cost parameters including adherence levels, relapse risks, treatment switch reasons, adverse events and direct medical care costs. Deterministic and probabilistic sensitivity analyses were conducted to assess the robustness of the model RESULTS: Compared with RIS, PP resulted more effective and less costly, while when compared with OLZ, PP was more costly but more effective with an incremental cost-effectiveness ratio of US$ 980 per relapse avoided. When plotting an acceptability curve, PP showed a 0.90 probability of being cost-effective if a decision maker is willing to pay US$ 3,775 at present value to avoid an additional relapse over a ten year horizon. There was also a 0.32 probability of PP being considered cost-saving. Both probability results were derived from the comparison with OLZ CONCLUSIONS: Since it is possible to avoid more relapses at a reasonable cost when compared with OLZ, PP represents good value-for-money for Mexican healthcare providers. On the other hand, PP is a dominant treatment alternative over RIS