BACKGROUNDThe Prostate Cancer Prevention Trial (PCPT) demonstrated that finasteride reduces the prevalence of prostate cancer by 24.8% (risk reduction) but questions remain regarding the cost‐effectiveness of widespread utilization. The purpose of the current analysis was to evaluate the cost‐effectiveness of chemoprevention utilizing a quality‐of‐life adjustment.METHODSA Markov decision analysis model with probabilistic sensitivity analysis was designed to determine the lifetime prostate health‐related costs, beginning at age 50 years, for men treated with finasteride compared with placebo. Model assumptions were based on data from the PCPT; Surveillance, Epidemiology, and End‐Results program; literature review of costs, utilities, and transition rates among various prostate cancer health states; and local institutional cost data.RESULTSThe quality‐adjusted cost‐effectiveness ratio for finasteride compared with men not receiving chemoprevention was $122,747 (in U.S.$) per quality‐adjusted life‐years saved (QALYs). If finasteride is assumed to not increase the incidence of high‐grade tumors, the quality‐adjusted cost‐effectiveness ratio was $112,062 per QALYs. Sensitivity analysis found that chemoprevention of prostate cancer with an agent that has no effect on the prevalence of benign prostatic hyperplasia can render a cost‐effectiveness ratio of <$50,000 per QALYs saved when applied to a high‐risk population associated with a 25% risk reduction, and a cost of $30 per month.CONCLUSIONSFinasteride is unlikely to be cost‐effective when considering the impact on survival differences among treated versus untreated groups. However, chemoprevention may be cost‐effective in high‐risk populations when taking into consideration adjustments for the impact on quality of life. Cancer 2008. © 2008 American Cancer Society.