BACKGROUNDIn Radiation Therapy Oncology Group (RTOG) trial 92‐02, after men received neoadjuvant hormone cytoreduction and radiotherapy for locally advanced prostate carcinoma, they were randomized to receive either 2 years of long‐term androgen‐deprivation (LTAD) or no further treatment (short‐term androgen‐deprivation [STAD]). The specific objective of the current study was to determine whether LTAD was a cost‐effective treatment for patients with locally advanced prostate carcinoma.METHODSThe cost‐effectiveness of LTAD was tested using a Markov model that was designed using proprietary software. The analysis took a payor's perspective. Unit costs were obtained by estimation using a global Medicare fee schedule. Costs and outcomes were discounted by 3%. Distributions were sampled at random from the treatment utilities, transition probabilities, and costs using a second‐order Monte Carlo simulation technique.RESULTSThe expected mean cost was $32,564 for LTAD compared with $33,039 for STAD after accounting for the additional cost of salvage treatment for men who were treated with STAD. The mean number of quality‐adjusted life years (QALYs) for men who received LTAD was 4.13 QALYs compared with a mean of 3.68 QALYs for men who received STAD. The cost‐effectiveness acceptability curve analysis showed a 91% probability that LTAD was cost‐effective compared with STAD. Although overall survival was similar in the LTAD and STAD groups, the patients who received LTAD experienced gains in QALYs and had lower costs, because LTAD prevented biochemical failure and the necessitating salvage hormone therapy.CONCLUSIONSThe current analysis showed that LTAD was cost‐effective for the entire population studied in RTOG trial 92‐02. Cancer 2006. © 2005 American Cancer Society.