OBJECTIVES: To estimate cost-effectiveness of dasatinib vs. imatinib in chronic-phase CML after failure of first-line imatinib from the perspective of the Austrian Social Healthcare Insurance System. METHODS: Long-term cost-effectiveness of dasatinib (2x70 mg/day) vs. imatinib (800 mg/day) was modeled with a Markov model using initial best response from a randomized clinical trial in chronic-phase CML patients resistant to 400-600 mg imatinib. Model simulation runs in monthly cycles until all patients have died. Disease progression depends on initial best response and current health-state, and was simulated according to literature based monthly transition-probabilities. Occurrence of serious adverse events (SAEs) was drawn from trial observations. Utilities were obtained from a CML utility study using EQ-5D, life expectancy from national statistics. Healthcare utilization and costs were derived from panels of clinical and finance experts, databases of 24 hospitals across Austria and Austrian drug price list. Both costs and effects were discounted annually at 5%. Sensitivity analyses on efficacy, costs and utilities were performed. RESULTS: Treating patients with dasatinib is a dominant treatment strategy compared to treatment with high dose of imatinib over lifetime time. Over lifetime, dasatinib is associated with a gain of 0.57 QALY (95% CI: -0.25 to 1.42) and considerable cost savings of € 15,213 (95% CI: -€ 40,220 to € 71,522). Dasatinib is also a dominant treatment strategy at a 1-year time horizon. While the utility component is driven by efficacy results, the cost component is driven by drug use and outpatient visits rather than management of SAEs and imaging/testing services. Results were robust to sensitivity analyses. CONCLUSION: Dasatinib is associated with increased effectiveness and cost savings to the Austrian health care system, and can be considered an improvement in treatment of chronic-phase CML patients after failure of first-line imatinib.