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Schizophrenia is a chronic, relapsing disease that requires more healthcare resources to manage than any other single psychiatric illness. The main cost of treatment is hospitalization as a result of the exacerbation of symptoms often caused by poor compliance. Although the costs of hospitalization and relapse have been well documented, the differential effects of various medications on healthcare expenditure are still being determined. The aim of the present study was to estimate the cost effectiveness of long-acting risperidone in the treatment of high-risk, non-compliant patients with schizophrenia over a 5-year period in Canada. A discrete event model was developed comparing three scenarios, each with a different starting treatment: haloperidol depot, long-acting risperidone or oral risperidone. Second and third-line treatment options were olanzapine and clozapine, respectively, for all three scenarios. On the basis of 3000 simulated patient characteristics, the model generated individual patient histories. Outcomes included the number and duration of psychotic episodes, the cumulative Positive and Negative Syndrome Scale (PANSS) score and direct medical costs. The time horizon of the model was 5 years and a 5% discount rate was used for costs and effects. The perspective of the model was that of the Canadian healthcare system. After 5 years, treatment with long-acting risperidone saved Can$6908 and Can$13 130 (discounted) and avoided 0.28 and 0.54 relapses per patient, compared with haloperidol depot and oral risperidone, respectively. In this model, initiating treatment of high-risk, non-compliant patients with schizophrenia with long-acting risperidone was the dominant strategy. With long-acting risperidone, direct costs were lower and clinical effectiveness was greater, compared with haloperidol depot or oral risperidone, during years 4 and 5. [ABSTRACT FROM AUTHOR]