OBJECTIVES: Acromegaly is a chronic disease with increased morbidity and mortality. For this and other pituitary tumors, the treatment choice changes between surgical or medical. The new generation of somatostatin analogues resulted in a recent challenge in attitude towards the traditional dominant role of pituitary surgery, but costs of medical treatment are a concern. We conducted a cost-effectiveness analysis comparing surgical treatment alone with combinations of surgical and medical treatments and comparing new and old formulations of medical treatment. METHODS: We evaluated retrospectively 53 patients with acromegaly who underwent pituitary trans-sphenoid surgery alone or in addition to medical therapy. Outcomes were analyzed as person months spent in different health state outcomes, defined according to Growth Hormone and Insulin-like growth factor-I levels. We used a decision analytic modeling approach and included cost per added year in a cured health state and cost per life year saved comparing surgery only with either the addition of medical treatment to all those non cured, or to all post surgery patients. RESULTS: Patients spent as much as 65% of time in non-cured health states. The average annual cost of acromegaly treatment was $8,700. The cost-effectiveness ratio of treating patients with microadenomas or macroadenomas and persistent disease following surgery was $30,733 and $35,892 respectively per added year spent in a cured state. New somatostatin formulations had little effect on the overall results. The cost per life year saved was approximately $32,000. The results were cost-effective over a wide range of costs and outcomes. CONCLUSION: Medical management of acromegaly is cost-effective providing further justification for more aggressive treatment of patients with persistently active postoperative disease.