OBJECTIVES: Overactive bladder (OAB) is associated with both an economic and quality of life burden. Current management involves antimuscarinic agents. Extended release formulations are expected to improve treatment compliance and persistence. This study explored persistence and impact on OAB related co-morbidities with two therapies: tolterodine extended release (TER) and oxybutynin immediate release (OIR) compared to no active drug treatment (NONE) and associated costs across five European countries. METHODS: A decision-analytic model estimated costs and outcomes associated with treatment. A large case-controlled study was used to estimate the percentage of patients achieving persistent control, defined as patients still on therapy after six months. Resource use included drug costs, physician visits, incontinence pads and the cost of urinary tract and skin infections. The model estimated the cost per patient achieving persistent control of OAB. Costs were estimated from the perspective of health service payers over six months. Sensitivity analyses included variation of the resource use frequency assumptions, cost inputs, and the time horizon of the analysis. RESULTS: After six months, the proportion of patients achieving persistent control was 39% on TER and 9% on OIR. Costs per patient for TER ranged between €349 (Germany) and €772 (Sweden) and between €177 (Germany) and €693 (Sweden) for OIR. Compared against NONE, the Incremental Cost-Effectiveness Ratios (ICERs) for TER were much lower than for OIR. ICERs of TER vs OIR ranged between €351 (Sweden) and €822 (Spain). Sensitivity analysis highlighted the model's sensitivity to the time horizon, physician costs and persistency rates. Differences in costs largely reflect variation in the proportion of patients in each country using incontinence pads. CONCLUSION: In this model more than twice as many patients achieve persistent control with TER than with OIR. The model estimated the cost per patient achieving persistent control would be lower with TER than with OIR.