OBJECTIVE: To develop a health economic model for estimating long-term costs and effects of treating chronic venous leg ulcers (VLU) in Sweden on the basis of a randomised clinical trial (RCT) (UK-97-0005 Device+Adaptic(R) (N:37) vs. Adaptic(R) only (N:36) under Biflex(R) compression bandage). METHOD: Patient data from a Swedish study including 252 VLU-patients recruited from a specialised leg ulcer clinic in Malmö between 1993 and 1997, is used in a Monte Carlo simulation model to estimate individual ulcers' time-to-healing (TTH) with conventional treatment. In accordance with patient data for 80 patients matching the inclusion criteria in the UK-97-0005 Device RCT, we impose a lognormal distribution on the TTH. The effect of UK-97-0005 Device is modelled as the relative efficacy of UK-97-0005 Device versus placebo seen in the clinical trial at the end of the 12 weeks study period (15%, p>0.05). Costs are evaluated from a health care provider perspective (materials, labour and surgical procedures) and are dependent on TTH. RESULTS: After 18,000 iterations the average TTH (cost) fell from 25.9 (€2,136) to 22.0 weeks (€1,987) for small ulcers (<10cm2) and from 39.0 (€7,047) to 33.0 weeks (€6,362) for large ulcers (>=10cm2) when UK-97-0005 Device was added. Corresponding coefficients of variation ranged between 99% and 125% for TTH and 86% and 120% for costs. The main cost driver was labour costs (75% and 84% for small and large ulcers, respectively). The remaining costs were split equally on materials and surgical procedures. Break-even was reached at a relative efficacy of UK-97-0005 Device of 7%. On the basis of an average prevalence of VLU of 0.2% in Sweden, the total cost of treating VLU-patients with UK-97-0005 Device was estimated to €59.7 million. CONCLUSION: At a relative efficacy above 7%, UK-97-0005 Device was shown to be a dominant alternative compared to conventional treatment of VLU in Sweden.