OBJECTIVE: To determine the cost impact of four systemic regimens for the treatment of newly diagnosed cytomegalovirus (CMV) retinitis in persons with AIDS. METHODS: An incidence-based simulation model was developed to evaluate the economic implications of treating CMV retinitis from a government payer perspective. The model randomly assigned patients to one of four systemic treatment regimens for induction and maintenance therapies: 1) ganciclovir IV/IV; 2) ganciclovir IV/PO; 3) foscarnet IV/IV; and 4) cidofovir IV/IV. Following a second relapse patients were randomly assigned an alternative therapy in order to assess the impact of various failure treatment strategies. Efficacy and safety data were extracted from a systematic review of available literature and publicly available sources. Resource use and cost data were obtained from a large, AIDS treatment facility in Switzerland. The primary outcome measures were time to first and subsequent progression, duration of maintenance treatment, and associated direct medical expenditures (1998 Swiss francs). Nonmedical costs and quality of life benefits were not considered. RESULTS: The median time to first progression was greatest for cidofovir followed by foscarnet, ganciclovir IV and ganciclovir PO. The average one year costs in the base case were lowest in patients initially randomized to cidofovir (87,867 CHF) followed by randomization to ganciclovir IV/PO (110,410 CHF), ganciclovir IV/IV (117,406 CHF) and foscarnet IV/IV (120,662 CHF). Sensitivity analyses of costs, effectiveness, and adverse event rates resulted in changes in the cost estimates, however the order remained unchanged. CONCLUSIONS: Of the four treatment regimens studied, beginning treatment with systemic cidofovir is most effective and least costly over a one year period.