OBJECTIVE: This is a cost-effectiveness analysis comparing one-year treatment of chronic non-malignant pain with transdermal fentanyl and with sustained release morphine. METHODS: A Markov-model was developed which modeled the treatment as a recursive process of 12 monthly cycles. Effectiveness was defined as days with good pain control. The following direct medical costs were included: baseline treatment, breakthrough medication, concomitant medication and adverse event treatment costs. Data on probabilities for altering pain control, for contracting adverse events, for switching treatment, and resource use data were obtained from clinical trials and from a Delphi panel. Unit costs were derived from official tariff and price lists. Base-case analysis, one-way and two-way sensitivity analyses were carried-out. RESULTS: Effectiveness was 99 days with good pain control for the transdermal fentanyl treatment in comparison with 64 days for sustained release morphine. The cost-effectiveness ratio (cost per day with good pain control) was Euro 8.54 with transdermal fentanyl and Euro 7.94 with sustained release morphine. The incremental effectiveness of transdermal fentanyl was 35 days, the incremental cost was Euro 338, and the incremental cost-effectiveness was Euro 9.63. The costs of baseline treatment, breakthrough and co-medication were higher, the costs of adverse event treatment were lower with transdermal fentanyl as compared with sustained morphine. The sensitivity analyses did not greatly affect the results and showed the model to be quite robust. CONCLUSION: Despite a cost-effectiveness ratio higher compared to that of sustained release morphine, transdermal fentanyl shows a valuable alternative for the treatment of non-malignant chronic pain. The incremental cost-effectiveness of transdermal fentanyl over sustained release morphine is quite moderate and justified by its substantially improved effectiveness with good pain control being a worth on its own, the higher patient preference due to its simplified and more attractive route of administration. CARDIOVASCULAR DISEASE