OBJECTIVES: This study aims to evaluate whether entecavir therapy is cost effective by suppressing viral replication to undetectable level. METHODS: The analytic perspective was that of Brazilian public health system (Sistema Único de Saúde – SUS). A decision simulation model was developed to consider a hypothetical cohort of 1000 CHB patients. Multivariate-adjusted relative risks with viral load (VL) categories were estimated from a large scale epidemiology study (The R.E.V.E.A.L.-HBV Study) cohort with 42,115 person-years of follow-up, and applied to nucleoside-naïve HBeAg+ and HBeAg- patients enrolled in two randomized phase III trials, in which HBV DNA values were measured after 48 weeks of therapy with either entecavir or lamivudine monotherapy, to project subsequent compensated cirrhosis (CC), decompensated cirrhosis (DC), and hepatocellular cancer (HCC). In Brazil, one year treatment with generic lamivudine costs about R$252, and annual cost of entecavir is R$4.427, which represents 80% of the federal expenses according the local legislation (Ordinance #2.577/2006). Direct medical costs included hospitalization, diagnostic and therapeutic procedures, supplementary tests, drugs, and professional fees, and were derived from the Government's website. Life expectancies were estimated from Statistician National Insititute (IBGE) and utility scores for different phases of CHB from the literature. Viral resistance to drug treatment was also considered. RESULTS: Entecavir was superior to lamivudine for the proportion of subjects who achieved HBV DNA<300 copies/ml at Week 48 (69.1% versus 39.8%, in HBeAg+ patients and 93.3% versus 75.6% in HBeAg- patients, P<0.05). Compared with lamivudine, using entecavir for one year is a dominant strategy in both patient populations, with lower cost and better QALY improvement. Entecavir treatment for up to ten years still seems cost effective, and these results are very robust to the sensitivity analyses. CONCLUSION: These results support that both short- and long-term ETV therapies remain highly cost effective either in HBeAg+ and HBeAg- patients.