Basiliximab, daclizumab, and OKT3 are potent immunosuppressive induction agents used in kidney transplantation. All four agents have demonstrated statistically significant reductions in the incidence of acute rejection compared to standard therapy. However, the cost effectiveness of these induction agents has not been studied in a uniform context or explored beyond a 1-year period following transplantation. OBJECTIVE: The purpose of this study is to estimate cost effectiveness of basiliximab, daclizumab, and OKT3 compared to standard therapy over a 5-year period post transplantation using a societal perspective. METHODS: A Markov model was constructed using four states (eventfree, rejection/graft survival, graft failure/dialysis, death) to reflect the different clinical and economic states of transplant patients. The costs examined included initial hospitalization cost, acute rejection treatment cost, cost of graft failure and subsequent dialysis, cost of maintaining functional graft, and drug cost for induction agents. The transition probabilities and utilities were obtained from the randomized trials and other literature. Costs were obtained from the U.S. Renal Data System Annual Report, the University HealthSystem Consortium Pharmacy Database, the Red Book, and literature. RESULTS: Average costs for the first year post transplantation ranged from $58,052 to $78,153 and five-year total costs were estimated to be $154,806 (basiliximab), $155,712 (daclizumab), $181,113 (OKT3), and $166,124 (standard therapy). Daclizumab ($48,665/QALY) and basiliximab ($51,182/QALY) were more cost effective than standard therapy ($56,646/QALY) or OKT3 ($60,391/QALY). CONCLUSION: Preliminary results suggest that daclizumab and basiliximab are cost effective induction agents compared to standard therapy when considered over a 5-year period following transplantation. Extensive sensitivity analysis is planned to test the robustness of this finding.