ObjectiveTo explore the expected long-term health and economic outcomes of telaprevir (TVR) plus peginterferon alfa-2a and ribavirin (PR), a regimen that demonstrated substantially increased sustained virologic response (SVR) compared with PR alone in adults with chronic genotype 1 hepatitis C virus (HCV) and compensated liver disease in the Phase III studies ADVANCE (treatment-naïve patients) and REALIZE (relapsers, partial responders, and null responders to previous PR treatment).Study DesignA decision-analytic model was developed to assess the cost-effectiveness of TVR+PR vs. PR in the United States (US).MethodsPatients first moved through the 72-week decision-tree treatment phase of the model and then entered the cyclic Markov post-treatment phase. Clinical data (patient characteristics, SVR rates, and adverse event rates and durations) were obtained from ADVANCE and REALIZE. Health-state transition probabilities, drug and other costs (in 2012/2013 US dollars), and utility values were obtained from the trials, published studies, and publicly available sources. Outcomes were discounted at 3% per year.ResultsRegardless of treatment history, patients receiving TVR+PR were projected to experience fewer liver-disease complications, more life-years, and more quality-adjusted life-years (QALYs) than patients receiving PR. In prior relapsers, TVR+PR was dominant, with lower total medical costs and more QALYs. For the other patient subgroups, incremental costs per QALY gained were between $16,778 (treatment-naïve patients) and $34,279 (prior null responders). Extensive sensitivity analyses confirmed robust model results.ConclusionsAt standard willingness-to-pay thresholds, TVR+PR represents a cost-effective treatment option compared with PR alone for patients with chronic genotype 1 HCV and compensated liver disease in the US. Future analyses are needed to compare TVR+PR with all existing HCV treatment options.