OBJECTIVES: Patients with transfusion-dependent thalassemia require chelation to prevent complications from transfusional iron overload. Deferoxamine (DFO) is an effective iron chelator, but must be administered as a subcutaneous or intravenous infusion over 8-12 hours 5-7 times per week leading to poor compliance and/or quality of life in many patients. METHODS: We developed a Markov model using data from published studies and other sources to estimate the lifetime incidence and medical care costs of complications of iron overload that are attributable to inadequate compliance with DFO therapy in patients with transfusion-dependent thalassemia. Complications considered included cardiac disease, diabetes, hypogonadism, hypoparathyroidism, hypothyroidism, and death due to cardiac disease. Current compliance with DFO therapy as well as costs of complications were obtained from an analysis of health insurance claims data. Adequate compliance was defined as 260 infusions per year (i.e., five per week). Costs were discounted at 3% annually. RESULTS: Current mean DFO use was estimated to be 169 infusions annually. At this level of compliance, 95% of patients are projected to experience cardiac disease during their lifetime, diabetes 46%, hypogonadism 77%, hypoparathyroidism 32%, and hypothyroidism 26%. Cardiac-disease-free life expectancy is projected to be 23 years; overall life expectancy, 28 years. The expected lifetime cost of complications of iron overload is $54,151 per patient. If mean compliance were to increase to 260 infusions per year, the lifetime risk of cardiac disease would decline to 60%, diabetes to 9%, hypogonadism to 47%, and hypothyroidism to 14%. Cardiac-disease-free and overall life expectancy would increase by 22 and 19 years respectively. The discounted expected lifetime costs of complications of iron overload would decline by $30,222. CONCLUSIONS: Inadequate compliance with DFO therapy in patients with transfusion-dependent thalassemia results in substantial morbidity and mortality, as well as increased medical care costs associated with complications of iron overload.