OBJECTIVE: Counterfeit antimalarial medicines have worsened the malaria situation in Laos because its use placed patients at risk of developing complications and death. This study aims to estimate its clinical and economic consequences in Lao PDR. METHODS: An epidemiologic model was structured and analyzed from the societal perspective. The population of Lao PDR was simulated through the model under 1) current situation (existence of counterfeit drugs) and 2) idealistic situation (no counterfeit drugs). The prevalence of counterfeit artesunate (41.18%) was used in the model. Several probability data were derived from literature, while others were based on interviews of providers in the settings. The cost of medications was taken from the wholesale price of a pharmaceutical company, while medical visit and hospitalization costs were converted from the hospital charges using a cost-to-charge ratio. The indirect cost was estimated using human-capital approach. The model was used to compute the differences of the number of hospitalizations, deaths, and total costs between both situations. A series of sensitivity analysis were performed. Since the time horizon of this study was 1 year, discounting was not needed. RESULTS: In the base-case analysis, 65 deaths, 4,741 hospital days, and $US 50,633 were incurred due to counterfeit antimalarial medicines. It was found that the probability of becoming severe malaria when using counterfeit medicines was very influential to clinical consequences, while the cure rate of counterfeit antimalarial medicines was influential to economic consequences. Scenario analyses demonstrated that counterfeit antimalarial medicines resulted in 539 of deaths in worst-case sensitivity analysis, and 9 deaths in best-case sensitivity analysis. CONCLUSIONS: In Lao PDR, an existence of counterfeit antimalarial medicines results in substantial increases in morbidity, mortality, and costs. Our research findings could be used as part of information to help policy makers prioritize problems and properly allocate budget to eliminate them.