OBJECTIVE: Payers are increasingly using economic evaluation methods in their decision-making process for new health technologies. Payers often only have the results from short-term clinical trials at their decision time point. For new drugs for chronic diseases/conditions such as hypertension, diabetes mellitus & multiple sclerosis, they may want to see how these benefits translate into long term outcomes via a model (i.e. a modelled economic evaluation). The appropriate time horizon for some modelled evaluations may be greater than the drug's remaining patent life. In a situation where the acquisition cost of a new drug is the major cost driver, the use of an adjusted acquisition cost after patent expiry could have a major effect on the modelled cost-effectiveness ratio. We set out to review issues associated with the acquisition costs of (new) drugs in modelled economic evaluations. METHODS: We reviewed the latest published versions of the guidelines of the major drug reimbursement agencies (PBAC, NICE, DQTC, AMCP) and health economics reference text books (Gold, Drummond, Bootman) as well as modelled economic evaluations of drugs published in ISPOR Value in Health in 2003 & 2004 to see how others have dealt with this issue. RESULTS: Although we could find frequent citations on the discounting of the acquisition cost of drugs if the time horizon of an evaluation is greater than 12 months, we found very little discussion on the merits of the adjustment of drug acquisition costs post patent expiry. CONCLUSION: The concept of adjusting the acquisition costs of (new) drugs after their patent expiry in modelled economic evaluations is underdeveloped. The merits & demerits of the concept will be discussed in more detail in the poster.