OBJECTIVES: To make a comparative cost-effectiveness analysis for treatment strategies involving PDE-5 inhibitors – sildenafil, tadalafil, vardenafil, or placebo (no treatment) among men 60 years or older suffering from erectile dysfunction. METHODS: A Markov decision-analytic model was used to examine cost-effectiveness. The model was run for two lengths of time – lifetime (up to 100 years of age – by when all patients died) and up to 80 years of age (by when all men discontinued sexual intercourse). Markov states were defined as – disease, no disease (cured), morbid (from treatment) and dead (absorbing state). Transition probabilities between states were derived from clinical trials reported in the literature. Costs were assigned from a societal perspective using a combination of published estimates and federal standards. Direct costs of treatment were calculated based on Average Wholesale price of the most common strength of each drug used for 1.5 attempts at sexual intercourse per week on an average. Effectiveness was measured in Quality Adjusted Life Years (QALYs) using utility values assigned to each Markov state – also collected from published studies. One-way sensitivity analyses were performed on effectiveness, cost and utility variables to test robustness of the results. RESULTS: Tadalafil treatment was found to dominate all other strategies (including no treatment) in both scenarios. Tadalafil-treated men gain more QALYs than any other strategy at costs less than the cost of other treatment and allied morbidity-related costs. Results remained mostly unchanged in the lifetime scenario after sensitivity analyses. ‘No treatment' was found to be a better option if there were no long-term costs involved with managing treatment related morbidity. Vardenafil emerged as a better option at thresholds of 66.65% effectiveness for tadalafil or at 73.54% effectiveness for vardenafil. CONCLUSIONS: For men suffering from ED, tadalafil use could be more cost-effective than other oral agents or no treatment.