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Background Schizophrenia is a serious mental health condition characterised by distortions in thought processes, perception, mood, sense of self, and behaviour. Lurasidone, a second-generation atypical antipsychotic, represents an additional treatment option alongside existing antipsychotics for adolescents and adults with schizophrenia. An economic model was developed to evaluate the incremental costs of lurasidone as a first-line treatment option compared to existing antipsychotics. Methods A Markov model was developed to estimate the cost impact of lurasidone as a first-line treatment option for both adolescents and adults. The sequence-based model incorporated the following health states: stable (no relapse or discontinuation), discontinuation (due to adverse events or other reasons), and relapse. Data used to determine the movement of patients between health states were obtained from network meta-analyses (NMAs). The time horizon ranged from three to five years (depending on the patient population) and a six-weekly cycle length was used. Unit costs and resource use were reflective of the UK NHS and Personal Social Services and consisted of the following categories: outpatient, adverse events, primary and residential care. Extensive deterministic sensitivity analysis was undertaken to assess the level of uncertainty associated with the base case results. Results Lurasidone is demonstrated to be cost-saving as a first-line treatment within the adolescent and adult populations when compared to second-line and third-line respectively. Lurasidone is more expensive in terms of treatment costs, resource use (in the stable health state) and the treatment of adverse events. However, these costs are outweighed by the savings associated with the relapse health state. Lurasidone remains cost-saving when inputs are varied in sensitivity analysis and scenario analysis. Conclusions Lurasidone is a cost-saving first-line treatment for schizophrenia for both adolescents and adults.