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Abstract: Pharmacological interventions for osteoporosis may reduce morbidity and mortality, but they incur additional health care costs. The aim was to quantify the additional costs and health benefits of prescribing alendronate 10 mg and calcium/vitamin D daily for 71-year-old women with a fracture risk twice that of the population average in stead of calcium/vitamin D alone. A state transition model based primarily on Scandinavian data was developed. Women were followed from age of 71 years until 100. Alendronate was assumed to reduce the fracture risk by 50%. Health benefits from the interventions were expressed in terms of life years, quality adjusted life years, and fractures avoided. Societal costs were estimated using literature estimates and Danish tariffs. All costs were measured in 2002 Danish Kroner (DKK). Future costs and benefits were discounted at 5% per year. The incremental cost per QALY gained was DKK125,000 while the cost per life year gained was DKK 374,000. The use of alendronate was cost-saving when 1) the treatment was extended to five years, 2) the risk of fracture was four times the population average, 3) the effect of alendronate was assumed to persist for three years after discontinuation of treatment, 4) a greater proportion had severe sequelae after a hip fracture, or 5) the start of therapy was delayed until age of 77 years. In conclusion, the use of alendronate compares well with other well established therapies in terms of cost-effectiveness in older women with high risk of fracture.