OBJECTIVES: To validate the economic advantages of Mirena, a new hormone releasing contraceptive system that can be inserted in the uterus for 5 years, compared to oral contraceptives (OC) in Canada. Mirena and OC offer equivalent contraceptive efficacy with a similar safety profile. METHODS: A cost-minimization analysis with a third-party payer perspective and a 5-year horizon. Three major scenarios were analysed. In the first scenario, only the drug acquisition cost of both treatments was used. Mean cost of OC was calculated based on the amount reimbursed in the April 2000 list of the Régie de l’assurance-maladie du Québec (RAMQ). In the second scenario, the pharmacy’s dispensing fee (Quebec RAMQ fee) was added. In the third scenario, real-life conditions of use of Mirena were applied, i.e. an expulsion rate of 6% and estimated continuation rate of 56% and 65% after 5 years. Sensitivity analysis was performed on OC cost using the lowest and highest costs from the RAMQ list. Discounting was performed at 0%, 3% and 5% over 65 time-periods (13 cycles x 5 years) for OC. No discount rate was applied to Mirena since acquisition cost is paid once at treatment start. RESULTS: The mean cost of an OC is determined to be $11 per cycle, while drug acquisition cost of Mirena is $290. All scenarios favour Mirena. With a 5% discount rate, Mirena offered a mean saving of $346 over 5 years. When the pharmacist's dispensing fee was included Mirena offered a mean saving of $750. In real life conditions, with a 5% discount rate, the use of Mirena resulted in a mean saving of at least 30% (i.e., between $194 and $221). CONCLUSION: Mirena represents a less expensive alternative to long-term contraception when compared to OC and this, in all proposed scenarios.