PURPOSE: (a) To examine the lifetime cost-effectiveness of adding treatment with Cinacalcet to the current standard of care for a 55-year-old with secondary hyperthyroidism in end-stage renal disease (ESRD). (b) To build a cost-effectiveness model using the Bayesian software WinBUGS to allow estimation of treatment effects on clinical outcomes through estimation of effects on surrogate markers of bone mineral metabolism (calcium, phosphorus and parathyroid hormone). METHODS: We constructed a 9-state Markov model; subjects could be dead or in one of the following health states prior to or after a parathyroidectomy: event-free, fracture only, cardiovascular event only, both fracture and cardiovascular event. We used age-specific death rates for patients with ESRD from the UK Renal Association. Transition probabilities between other states were obtained from control group rates and estimates of effectiveness in clinical trials of Cinacalcet in the relevant patient group. Costs for treatment of adverse outcomes were taken from the NHS list of HRG-based costs and costs of treatment with cinacalcet were also estimated from dosages and costs in phase 3 trials of the drug (all from the perspective of the UK NHS). Effectiveness was measured by quality-adjusted life-years (QALYs) with utility weights obtained from a systematic review of the literature. A discount rate of 3.5% was applied to future costs and QALYs. Sensitivity to uncertainty in values of relative effectiveness measures, dosing, costs of treating adverse events and the utility of ESRD was assessed probabilistically. Expected incremental cost and effectiveness were computed for 10,000 simulated sets of these parameters. RESULTS: The cost-effectiveness of a lifetime of treatment with Cinacalcet was GBP36,500 per QALY gained. Probabilistic sensitivity analysis over all uncertain parameters gave an estimated 80% probability of effectiveness (QALY gains > 0). At a willingness-to-pay threshold of more than GBP41,000/QALY, the probability of a net health benefit of Cinacalcet was greater than 50%. CONCLUSIONS: Cinacalcet is cost-effective in the management of ESRD patients with secondary hyperthyroidism. The construction of the model in a Bayesian context offers clear advantages . Instead of using simple independent distributions for sensitivity analyses, simulation from joint posterior distributions of effectiveness measures is possible. These effectiveness measures can be directly observed or obtained through analysis of surrogate outcomes. These extensions of the model are currently being pursued.