OBJECTIVES: To estimate the costs, benefits, and cost-effectiveness of valsartan as a treatment of chronic heart failure (CHF) in Hungary. METHODS: A country-specific economic analysis was undertaken by combining within-trial efficacy and resource data from the Valsartan Heart Failure Trial (Val-HeFT) with Hungarian cost estimates. Unit cost estimates were obtained from official data sources of the National Health Found in Hungary and were adjusted to 2004 Hungarian forints. Total within-costs were estimated for hospitalizations, inpatient and outpatient physician services, ambulance transportation, deaths outside the hospital, and outpatient cardiovascular medications. We estimated life expectancy using two different methods, by taking the reciprocal of the mortality rate observed in the trial and based on the percentages of patients who had died during the trial. We compared within-trial inpatient days and number of hospitalizations using a negative binomial model adjusting for follow up. T-tests were used to compare within-trial costs. We also estimated the incremental cost per life year saved. Analyses were conducted for subgroups identified in Val-Heft. RESULTS: The net incremental cost in the valsartan group was 208,766 Ft over 23 months of follow-up. Over the course of the trial, patients treated with valsartan had on average a net incremental cost of 183,619 Ft. Among patients not treated with an ACE inhibitor at baseline, the incremental cost-effectiveness ratio was 402,438 Ft per life-year saved when we estimated life expectancy by taking the reciprocal of the mortality rate observed in the trial. When we estimated life expectancy using the daily hazard rate, the incremental cost-effectiveness ratio was 450,597 Ft per life-year saved. CONCLUSION: Valsartan provided clinical benefits at a mean incremental cost of 108,921 Ft per year during the trial. In patients not taking ACE inhibitors, valsartan was economically attractive, increasing survival for a reasonable cost.