OBJECTIVES: To assess the cost-effectiveness of anastrozole (ArimidexTM) as adjuvant treatment in postmenopausal hormone receptor positive (HR+), early (non-metastasised) breast cancer. METHODS: A Markov state transition model was developed over 20 years, simulating the natural history of postmenopausal HR+ early breast cancer. Adverse event data as well as direct rates of disease progression were obtained from the ATAC (Arimidex, Tamoxifen Alone or in Combination) trial comparing adjuvant anastrozole with tamoxifen (n = 5,215), with a median follow-up duration of 4 years. Progression to subsequent health states following initial disease progression was modeled on the basis of published clinical studies. Utility scores for different disease stages were obtained from published literature. Costs of breast cancer recurrence (locoregional and distant) and adverse events were calculated from resource utilisation obtained through a two-round Delphi consensus panel (physicians = 7), multiplied with unit costs from the French health care payer's perspective at an annual discount rate of 3%. RESULTS: Comparison with EBCTCG data shows that the model is valid for predicting clinical outcomes. At a life time horizon of 20 years, incremental cost effectiveness ratios (ICER) of €13,525 /life year gained (LYG) and €12,722/Quality adjusted life year gained are obtained for anastrazole relative to tamoxifen. Multiple sensitivity analyses show the results to be robust to relatively large variations in risk reduction by anastrozole or cost estimates of disease progression. Outcomes appear sensitive to the time horizon with an ICER of €24,950/LYG at 15 years. This impact of time horizon on cost-effectiveness is a typical finding in treatment for early cancer, related to treatment costs incurring during the initial 5 years whereas benefits (LYG) become apparent after several years through prevention of death from disease progression. CONCLUSION: Compared to tamoxifen, anastrozole appears cost-effective for adjuvant treatment of postmenopausal HR+ early breast cancer and lies within acceptable cost-effectiveness benchmarks.