OBJECTIVES: To analyse the factors influencing cost-effectiveness of a health care intervention over time using economic evaluations of epoetin alfa (EPO) as a case study. When first evaluated, EPO was not considered cost-effective in the UK, but soon became widely used by clinicians. METHODS: The analytical framework of a study conducted in 1990 was used to revisit the cost-effectiveness of EPO. Study variables were updated to 2000 values using a meta-analysis of the impact of EPO on key cost drivers, supplemented by published unit cost data and expert clinical opinion. Utilities for health states associated with anaemia were taken from published studies. The impact of the change in the value of each variable on the cost-effectiveness ratio was assessed separately. RESULTS: After 10 years further experience of the use of EPO the base case cost per QALY was reduced from £171,810 to £17,067 (at 2000 prices), now falling in the range considered acceptable by the National Institute for Clinical Excellence (NICE). The majority of the reduction resulted from changes in the dosage and price of EPO since 1990. Other factors making a sizeable contribution were the revised QALY gains and the use of the changed UK discount rate. Only one factor, the reduced estimate of avoidance of transfusions, caused an increase in the cost-effectiveness ratio since 1990. CONCLUSIONS: Cost-effectiveness can change over time with improved data collection and changes in the utilisation and cost of technologies. The existence of a body like NICE in 1990 might have delayed the widespread adoption of EPO in the UK, but the higher standards of clinical and economic evidence demanded by such a body might have expedited the appropriate pricing, dosage and utilisation of the treatment. Whilst the factors inducing the improved cost-effectiveness of EPO were identified in the sensitivity analysis in 1990, the subsequent changes could not easily be predicted at the time of the early evaluation.