OBJECTIVE: To assess the cost-effectiveness of photodynamic therapy (PDT) with verteporfin for the treatment of predominantly classic, subfoveal choroidal neovascularisation (CNV) secondary to age-related macular degeneration (AMD) relative to no treatment. METHODS: This analysis examines the cost-effectiveness of PDT using verteporfin in patients with predominantly classic CNV secondary to AMD, based on results of the TAP study, a multicentre, double-blind, randomised, placebo-controlled trial. Data on visual acuity levels were collected for 24 months, with an option of a further 12 months. Patients with visual acuity scores above the level of legal blindness in Australia (34 letters or less) were defined as not blind. The proportion of patients not legally blind at each three month interval was plotted on a 'vision curve', extrapolated to 60 months and the area under the curve calculated for each group. The difference in area under the curve between groups is the vision years gained from treatment. A costing analysis was also performed, based on an average of 3.4 treatments in the first year, 2.1 in the second year and 1.2 in the third year. Costs of permanent nursing home entry, home and community care, and falls - all resulting from declining vision - were also included in the analysis. RESULTS: The incremental cost of PDT with verteporfin compared with no treatment varied between $13,762 and $15,031 over the five-year period, depending on assumptions made regarding data extrapolation. Vision years gained over this time varied between 0.7552 and 1.0389. This corresponds to an incremental cost per vision year gained of between $13,246 and $19,903, which sensitivity analyses have shown to be robust to changes in the value of key variables. CONCLUSIONS: PDT with verteporfin represents a cost-effective intervention in the proposed population. There is currently no alternative treatment for patients with predominantly classic, subfoveal CNV secondary to AMD.