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Background This study compares the costs and effects of a regimen with ritonavir-boosted tipranavir (TPV/r) to a physician-selected genotypically-defined standard-of-care comparator protease inhibitor regimen boosted with ritonavir (CPI/r) in HIV infected patients that were previously exposed to antiretroviral therapy in the Netherlands. Methods We compared the projected lifetime costs and effects of two theoretical groups of 1000 patients, one receiving a standard of care regimen with TPV/r as a component and the other receiving a standard of care regimen with CPI/r. A 3-stage Markov model was formulated to represent three different consecutive HAART regimens. The model uses 12 health states based on viral load and CD4+ count to simulate disease progression. The transition probabilities for the Markov model were derived from a United States cohort of treatment experienced HIV patients. Furthermore, the study design was based on 48-week data from the RESIST-2 clinical trial and local Dutch costing data. Cost and health effects were discounted at 4% and 1.5% respectively according to the Dutch guideline. The analysis was conducted from the Dutch healthcare perspective using 2006 unit cost prices. Results Our model projects an accumulated discounted cost to the Dutch healthcare system per patient receiving the TPV/r regimen of €167,200 compared to €145,400 for the CPI/r regimen. This results in an incremental cost of €21,800 per patient. The accumulated discounted effect is 7.43 life years or 6.31 quality adjusted life years (QALYs) per patient receiving TPV/r, compared to 6.91 life years or 5.80 QALYs per patient receiving CPI/r. This translates into an incremental effect of TPV/r over CPI/r of 0.52 life years gained (LYG) or 0.51 QALYs gained. The corresponding incremental cost effectiveness ratios (iCERs) are €41,600 per LYG and €42,500 per QALY. Conclusion We estimated the iCER for TPV/r compared to CPI/r at approximately €40,000 in treatment experienced HIV-1 infected patients in the Netherlands. This ratio may well be in range of what is acceptable and warrants reimbursement for new drug treatments in the Netherlands, in particular in therapeutic areas as end-stage oncology and HIV and other last-resort health-care interventions.