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Objectives: In Australia, no therapeutic agents were subsidised for the treatment of idiopathic pulmonary artery hypertension (iPAH), a rare progressive and severe disease with short life expectancy, until 1 March 2004, when bosentan (a dual endothelin receptor antagonist of high cost) was listed on the Pharmaceutical Benefits Scheme (PBS). Bosentan, in addition to conventional therapy, has been shown to slow iPAH progression and improve clinical and haemodynamic status and symptomatology, compared with placebo and conventional therapy. The objective of this paper is to describe the process of the Australian Pharmaceutical Benefits Scheme listing for bosentan (Tracleer), which included a health economic model assessing the cost effectiveness of bosentan from a healthcare payer perspective, and a risk-sharing arrangement based on the establishment of a patient registry.Methods: The health economic model predicted the cost, hospitalisation and mortality rates of a population of iPAH patients treated with either the conventional therapy regimen used in Australia or bosentan plus the conventional therapy regimen. The model was implemented as a first-order Monte Carlo simulation with mortality modelled directly as the main clinical outcome. The impacts of proposed continuation criteria, restricting the ongoing use of the drug, were evaluated. Costs and outcomes were discounted at 5% and a sensitivity analysis examined the robustness of the key assumptions.Results: The model predicted that after 5, 10 and 15 years, the difference in average cumulative costs between bosentan plus conventional therapy and conventional therapy alone would be 116,929 Australian dollars (A dollars), A181,808 dollars and A216,331 dollars for each patient, respectively. There would be an associated increase in average life expectancy of 1.39, 2.93 and 3.87 years at 5, 10 and 15 years, respectively, with an incremental cost-effectiveness ratio at 15 years of A55,927 dollars for each life-year gained. Removing the continuation criteria from the model increased the incremental cost-effectiveness ratio to A62,267 dollars (1996-2002 values).Conclusions: Economic modelling based on improved survival suggests bosentan to be a potentially cost-effective treatment for iPAH. However, the structure of the model and its inputs should be reviewed and updated as more data become available. [ABSTRACT FROM AUTHOR]