OBJECTIVES: To assess the cost effectiveness of long-term treatment with eszopiclone for chronic primary insomnia in adults. METHODS: We used patient level data from a 6-month, double-blind, placebo controlled, clinical trial to develop a model to assess the utility and costs associated with eszopiclone treatment of primary insomnia. Treatment of insomnia was evaluated using the Insomnia Severity Index, which categorizes insomnia as not clinically significant, subtheshold, moderate, and severe. Quality of life data were collected in the trial using the SF-36. From these responses, preference-based utility scores were derived using an algorithm published by Franks et al. (2004). Insomnia costs were based on published data, and included the additional health care costs of patients with insomnia versus patients with no insomnia, the additional absenteeism costs due to insomnia, and the “presenteeism” (lost productivity while at work) costs as measured by the Work Limitations Questionnaire. Eszopiclone cost was based on the average wholesale price. Changes in the average quality-adjusted life years (QALYs) and costs from baseline to 6 months for patients in both treatment groups were calculated and 95% credible intervals generated by a bootstrapping algorithm. All costs are presented in 2006 US dollars. RESULTS: The average 6-month changes in QALYs were 0.010514 and -0.003201 for eszopiclone and placebo groups, respectively, for a mean net gain of 0.013714 (95% CI: 0.0053525, 0.021885). The average 6-month costs per patient including indirect productivity were $490 and $421, respectively, indicating a net cost of $69 (-$436, $325). Incremental costs per QALY gained associated with eszopiclone were $5,003 (-$12,603, $41,376) per patient over the 6-month time period when absenteeism and presenteeism costs were included and $33,110 ($20,679, $83,846) when excluded. CONCLUSION: Based on this model, eszopiclone treatment of insomnia was cost effective considering lost productivity, and remained cost effective even when excluding productivity costs.