PURPOSE: To assess the value conferred by photodynamic therapy (PDT) and the cost-utility of PDT for the treatment of classic, subfoveal choroidal neovascularization associated with age-related macular degeneration (ARMD). DESIGN: Average cost-utility analysis utilizing clinical trial data, patient-based time tradeoff utility preferences, and a third party insurer cost perspective. METHODS: Five-year visual acuity data from the TAP (Treatment of Age-related Macular Degeneration With Photodynamic Therapy) Investigation were modeled into a 12- year, value-based, reference case, cost-utility model utilizing year 2004 Medicare costs and an outcome of ＄ /QALY (dollars/quality-adjusted life-year). Discounting of outcomes and costs using net present value analysis with a 3% annual rate was performed as recommended by the Panel for Cost-Effective-ness in Health and Medicine. RESULTS: PDT with verteporfin (Visudyne) dye for classic subfoveal choroidal neovascularization confers an 8.1% quality of life (value) improvement over the 12- year life expectancy of the reference case, while during the last 8 years the value improvement is 9.5% . The average cost-utility of the intervention is ＄ 31,103/QALY (quality-adjusted life-year). Extensive oneway sensitivity analysis values range from ＄ 20,736/QALY if treatment efficacy is increased by 50% to ＄ 62,207 if treatment efficacy is decreased by 50% , indicating robustness of the model. CONCLUSIONS: PDT using verteporfin dye to treat classic subfoveal choroidal neovascularization is a very cost-effective treatment by conventional standards. Themarked improvement in cost-effectiveness compared with a previous report results from the facts that the treatment benefit increasingly accrues during 5 years of follow-up while the number of yearly treatments diminishes markedly during that time. PURPOSE: To assess the value conferred by photodynamic therapy (PDT) and the cost-utility of PDT for the treatment of classic, subfoveal choroidal neovascularization associated with age-related macular degeneration (ARMD). DESIGN: Average cost-utility analysis utilizing clinical trial data, patient-based time tradeoff utility preferences, and a third party insurer cost perspective. METHODS: Five-year visual acuity data from the TAP (Treatment of Age-related Macular Degeneration With Photodynamic Therapy) Investigation were modeled into a 12- value-based, reference case, cost-utility model utilizing year 2004 Medicare costs and an outcome of $ / QALY (dollars / quality-adjusted life-year). Discounting of outcomes and costs using net present value analysis with a 3% annual rate was performed as recommended by the Panel for Cost-Effective-ness in Health and Medicine. RESULTS: PDT with verteporfin (Visudyne) dye for classic subfoveal choroidal neovascularization confers an 8.1% qualit y of life (value) improvement over the 12-year life expectancy of the reference case, while during the last 8 years the value improvement is 9.5%. The average cost-utility of the intervention is $ 31,103 / QALY (quality-adjusted life -year). Extensive oneway sensitivity analysis values ​​range from $ 20,736 / QALY if treatment efficacy is increased by 50% to $ 62,207 if treatment efficacy is decreased by 50%, indicating robustness of the model. CONCLUSIONS: PDT using verteporfin dye to treat classic The marked improvement in cost-effectiveness compared with a previous report results from the facts that the treatment benefit increasingly accrues during 5 years of follow-up while the number of yearly-clinics diminishes markedly during that time.