Objective To assess the cost effectiveness of vertical transmission prevention strategies by using a mathematical simulation model. Design A Markov chain model was used to simulate the cost effectiveness of four formula feeding strategies, three antiretroviral interventions, and combined formula feeding and antiretroviral interventions on a cohort of 20 000 pregnancies. All children born to HIV positive mothers were followed up until age of likely death given current life expectancy and a cost per life year gained calculated for each strategy. Setting Model of working class, urban South African population. Results Low cost antiretroviral regimens were almost as effective as high cost ones and more cost effective when formula feeding interventions were added. With or without formula feeding, low cost antiretroviral interventions were likely to save lives and money. Interventions that allowed breast feeding early on, to be replaced by formula feeding at 4 or 7 months, seemed likely to save fewer lives and offered poorer value for money. Conclusions Antiretroviral interventions are probably cost effective across a wide range of settings, with or without formula feeding interventions. The appropriateness of formula feeding was highly cost effective only in settings with high seroprevalence and reasonable levels of child survival and dangerous where infant mortality was high or the protective effect of breast feeding substantial. Pilot projects are now needed to ensure the feasibility of implementation.

Total and unit costs, and government's contribution, were considerably higher than previous Zambian estimates and international benchmarks. These findings have substantial implications for planners, efficiency improvement and sustainable financing, particularly as new vaccines are introduced. Variations in immunisation costs at facility level warrant further statistical analyses.

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