Use of surrogate measures of effectiveness in cost-effectiveness analyses requires the assumption that a constant and monotonic relationship exists between the surrogate measure and the clinical outcome of interest. Results from epidemiologic studies and randomized controlled trials provide considerable support for the use of changes in lipids as a surrogate measure of effectiveness for changes in coronary heart disease risk and mortality in cost-effectiveness analyses of lipid-lowering therapies. Accordingly, the cost-effectiveness of lipid-lowering therapies is examined using efficiency-frontier analysis and a variety of surrogate measures, including the percent change in low density lipoprotein cholesterol (LDL-C) and the ratio of LDL-C to high density lipoprotein cholesterol (HDL-C), and the percentage of patients attaining goal LDL-C levels. These analyses suggest that niacin, fluvastatin (20 and 40 mg), simvastatin (5 mg), pravastatin (20 mg), and atorvastatin (10–80 mg) are cost-effective therapies; simvastatin (10, 20, and 40 mg), pravastatin (10 and 40 mg), all dosages of lovastatin, and the bile acid sequestrants are not. Advantages and limitations of this methodology are discussed.