OBJECTIVES: To explore the cost-effectiveness of fluticasone propionate (FP) for the treatment of chronic obstructive pulmonary disease (COPD), we estimated costs and quality adjusted life years (QALYs) over three-years, based on an economic appraisal of a previously reported clinical trial (ISOLDE). METHODS: Results from the initial analyses of the trial data showed significant improvements with FP in reducing the rate of exacerbations from COPD, in slowing the rate of decline in health status and a trend towards improved survival. A recently published algorithm for the SF-36 generic instrument allowed the calculation of utility scores for quality of life suitable for calculating QALYs. Standard statistical techniques, including multiple imputation approaches to handle missing data, were employed to address missing data issues allowing the estimation of cumulative costs and QALYs over the three year study period. RESULTS: In the base case analysis we estimated the incremental costs of FP versus placebo to be GBP929 (95% confidence interval (CI): GBP633 to 1220) with an additional effect of 0.14 QALYs (CI: 0.07 to 0.20). This generates a cost-effectiveness estimate for the within-trial period of GBP6,830 per QALY gained (CI: GBP3,960 to 13,300/QALY gained) which includes uncertainty due to the imputation process. An alternative imputation approach did not materially affect this estimate. CONCLUSIONS: Previous analyses of the ISOLDE study showed significant improvement on disease specific health status measures and a trend towards a survival advantage for treatment with FP. This analysis shows that joint considerations of quality of life and survival result in a substantial increase in QALYs in favor of FP. Based on these data, FP appears cost-effective.