OBJECTIVES: Chronic myelogenous leukaemia (CML) is a progressive disease that is associated with significant health and economic burden. Although durable response from current treatments such as imatinib is achievable for many patients, a subset of patients develop resistant disease. This study aims to predict the impact of short-term response upon the cost-effectiveness of new interventions to treat CML. METHODS: A Markov model was developed to estimate the non-drug costs and health outcomes associated with treatments for chronic phase CML. Two hypothetical treatment options were modelled, each with a different short-term best response profile. Short-term response was defined as ‘no response' (NR), ‘complete haematological response' (CHR), partial cytogenetic response (PCR) and complete cytogenetic response (CCR). Patients progressed through the stages of the disease at different rates, based on their short-term best response to treatment. Unit costs were drawn from national databases, and were factored according to resource use to estimate total costs. Because the purpose of this study is to inform the cost-effectiveness of novel treatments, drug costs are not included in the model. Resource use and quality-adjusted life year (QALY) scores were stratified according to the patient's current health status and response level. RESULTS: Patients who achieve no response are estimated to experience a total of 1.48 QALYs and incur costs of £39,724 over their lifetime. Those who achieve CHR, PCR and CCR experience 5.11, 9.73 and 10.00 QALYs, and costs of £55,816, £65,610 and £66,562 respectively. CONCLUSION: Short-term response is related both to long-term survival and increased costs. The increased costs associated with improved response are a result of the patient's improved survival and consequent increased resource use. However, these costs may be offset by reductions in major cost drivers such as hospitalisation and/or other resource use as a result of the improved response.