As new treatment options for chronic hepatitis B virus (HBV) become available, evaluations of cost-effectiveness become important. Entecavir is a deoxyguanine nucleoside analogue approved by the U.S. Food and Drug Administration in March 2005 for HBV infection in adults with evidence of active viral replication and either evidence of persistent elevations in serum aminotransferases (alanine aminotransferase or aspartate aminotransferase) or histologically active disease. Entecavir has demonstrated greater suppression of viral replication compared with lamivudine, but also has a relatively higher drug acquisition cost in the United States. To estimate the long-term health and economic impact of treating HBV with entecavir versus lamivudine in patients who are positive for hepatitis B e antigen (HBeAg) based on the efficacy and safety results of the Phase 3, double-blind, randomized controlled trial, Benefits of Entecavir for Hepatitis B Liver Disease (BEHoLD). A decision tree model was developed to evaluate the cost-effectiveness of entecavir compared with lamuvidine in suppressing HBV DNA to an undetectable level. Risks for compensated cirrhosis (CC), decompensated cirrhosis (DC), and hepatocellular carcinoma (HCC) were derived from the published Risk Evaluation of Viral Load Elevation and Associated Liver Disease/Cancer-Hepatitis B Virus (REVEAL-HBV, 2006) study, a longitudinal (mean follow-up: 11.4 years) cohort study of community residents who were seropositive for the hepatitis B surface antigen; 85% of REVEAL-HBV participants were HBeAg-negative. To estimate future risks of CC, DC, and HCC, the REVEAL-HBV study's multivariate-adjusted relative risks of CC, DC, and HCC for 5 HBV DNA (viral load level) categories were applied to posttreatment HBV DNA levels obtained from the BEHoLD trial of 709 HBeAg-positive HBV patients treated with entecavir (n = 354) or lamivudine (n = 355). Entecavir and lamivudine were assigned annual costs of $7,365 and $2,604, respectively, based on the wholesale acquisition cost. Life expectancy for DC and HCC was estimated by the declining exponential approximation of life expectancy method. Other model parameter values, such as utilities and event medical costs, were derived from published sources. The joint uncertainty of projected event time distribution and treatment failure rates beyond the trial period were considered using probabilistic sensitivity analyses (PSA) with 1,000 replicates. The analytic perspective was that of a U.S. third-party payer responsible for all direct health care expenditures. In the BEHoLD clinical trial (AI463022), subjects were predominantly male (75%), Asian (57%), or white (40%) with a mean age of 35 years. Entecavir was superior to lamivudine in the proportion of subjects who achieved undetectable HBV DNA (< 300 copies per mL) by polymerase- chain reaction assay at week 48 (69.1% vs. 39.8%, respectively) (P < 0.001). In the REVEAL-HBV study after statistical adjustment for age, gender, cigarette smoking, and alcohol consumption, rates of CC, DC, and HCC were associated with higher HBV DNA levels (e.g., compared with the reference category [< 300 copies per mL], adjusted hazard ratios for HCC were 1.2, 2.9, 9.5, and 15.2 for serum HBV DNA levels of 300-9,999, 10,000-99,999, 100,000-999,999, and e > or = 1 million copies per mL, respectively). In the reference case, for a hypothetical cohort of 1,000 HBV patients aged 35 years, 52 weeks of entecavir treatment compared with lamivudine treatment avoided 71 cases of CC, 8 DC cases, and 42 HCC cases within 10 years, resulting in a 0.728 quality-adjusted life-year (QALY) gain at an incremental cost of $2,350, with a 3% annual discount. The incremental cost of using entecavir was $3,230 per QALY gained (95% confidence interval [CI], $2,312-$4,528), with 99.3% of PSA-derived estimates below $5,000 per QALY. Results were robust and most sensitive to efficacy, drug cost, and treatment duration. Assuming that (1) the efficacy of entecavir after 1 year is sustainable and (2) liver disease risk levels from the REVEAL-HBV study population (a primarily HBeAg-negative group) adequately represent risk for a treated HBeAg-positive patient group, entecavir given for up to 10 years would be highly cost-effective in HBeAg-positive patients.