PURPOSE: This study aims to evaluate whether long-term entecavir therapy is cost effective by suppressing viral replication to undetectable level. METHODS: The analytic perspective was that of a US third-party payer responsible for all direct health care expenditures. Multivariate-adjusted relative risks with viral load (VL) categories were estimated from a large scale epidemiology study (The R.E.V.E.A.L.-HBV Study) cohort with 42,115 person-years of follow-up, and applied to nucleoside-naïve HBeAg+ patients enrolled in a randomized phase III trial , in which HBV DNA values were measured after 48 weeks of therapy with either entecavir or lamivudine monotherapy, to project subsequent compensated cirrhosis (CC), decompensated cirrhosis (DC), and hepatocellular cancer (HCC). Entecavir and lamivudine were assigned annual cost of $7490 and $2635, respectively, based on published data as of 5/9/2006. Direct medical cost of and life expectancy and utility scores for different phases of CHB were estimated from published US specific data, and costs were adjusted to year 2006 value. Viral resistance to drug treatment was also considered. The uncertainty surrounding event distribution and treatment failure rates beyond trial period were considered using probabilistic sensitivity analyses (PSA) with 1000 replicates. RESULTS: 715 subject started double-blind treatment; males (75%), Asian (57%), white (40%); mean age 35 years. Entecavir was superior to lamivudine for the proportion of subjects who achieved HBV DNA<300 copies/ml at Week 48 (67% versus 37%, P<0.05). Compared with lamivudine, using entecavir per length of therapy cost an incremental $3,419 (one year), $12,182(three years), $16,691(five years), and $22,013 (ten years), per QALY gained, with 99.9% of PSA-derived estimates below $20,000/QALY for a 3-year therapy. CONCLUSIONS: These results support that long term ETV therapy remains highly cost effective in HBeAg+ patients.