OBJECTIVES: Clinical evidence shows efficacy differences between catheters with hydrophilic surface and other non-coated catheters which require gel for lubrication, with reduced complication rates with hydrophilic catheters. Lower treatment costs for complications could compensate for a price difference between hydrophilic and non-coated catheters. The aim of this analysis was to investigate the possible price increase for hydrophilic catheters that would allow for a total cost-saving for the Japanese health care system. METHODS: A Markov model simulating a population of 40 years old users of intermittent catheterization with costs from a Japanese setting was used for this analysis. During a time-horizon of 1 year, the simulated population was modelled to use either a hydrophilic catheter or a non-coated catheter. The monthly cost for non-coated catheters was 24,000 yen. Included catheter related complications and associated treatment costs per event were urinary tract infection (UTI; 80,719 yen), sepsis (2,643,084 yen), epididymitis (80,719 yen), stricture (238,972 yen) and bladder stones (257,435 yen). Absolute and relative risks for the complications were retrieved from the literature. RESULTS: During the year modelled, the efficacy difference gave fewer events of UTI (1.8 vs 2.2/patient), sepsis (0.07 vs 0.08/patient), epididymitis (0.002 vs 0.020/patient) and strictures (0.002 vs 0.020/patient) with hydrophilic catheters compared to non-coated catheters. The efficacy difference translated into reduced treatment costs for complications of 74,522 yen per patient. This allowed for a 25% increase in monthly catheter costs for hydrophilic catheters compared to non-coated catheters (30,000 yen vs 24,000 yen), without implying increased total health care costs. CONCLUSIONS: This analysis suggests that hydrophilic catheters can have a 25% higher price level than the non-coated catheters and still result in cost-savings for the Japanese health care system. At the same time, the patients would benefit from fewer complications.