OBJECTIVE: The National Institute for Clinical Excellence's (NICE) initial evaluation of cholinesterase inhibitors for Alzheimer's disease failed to account for current guidance in the UK, which states that only patients who respond to treatment should continue with therapy. This study re-valuates cost-effectiveness estimates using the same model in accordance with current guidance. METHODS: The Assessment of Health Economics in Alzheimer's Disease (AHEAD) model, published in 2001, was adapted by the NICE appraisal group for their evaluation. The original AHEAD model was used to estimate the cost-effectiveness of continuing therapy only in responders. Where possible, model inputs were based on values used by NICE. Only patients who experienced no decline in cognition after six months of treatment with galantamine continued treatment, for the subsequent five years. A health care payer perspective was adopted. Sensitivity analyses on costs, utilities, discount rates, treatment effects and time horizon were conducted. RESULTS: NICE reported the cost-effectiveness of galantamine as ₤46,000 per discounted QALY gained in its augmented base case results. Shadowing NICE inputs, and assuming all patients continue with treatment regardless of response, the original AHEAD model results in a ratio ₤32,000, so some differences between the two analyses remain even when using similar inputs. Using AHEAD, if only responders continue with treatment, the ratio falls to ₤11,000, a 67% drop. If a responder analysis in the NICE study would also result in a 67% reduction in their estimate, one would expect a new NICE ratio of roughly ₤15,000. Treatment costs and time horizon were influential. If projections are extended to 6 years, the ratio falls to ₤7000. Varying the daily cost of galantamine by ₤0.50 changes cost per QALY estimates by about ₤5000. CONCLUSIONS: NICE's initial cost-effectiveness assessment was not in agreement with current guidance and results in inappropriately high estimates of cost-effectiveness.