AIM: To assess the relative cost effectiveness of escitalopram compared with venlafaxine XR in patients with major depressive disorder (MDD). METHODS: An economic evaluation was conducted alongside a double-blind, multinational, randomised clinical trial and examined the costs and quality of life of 251 patients taking escitalopram versus venlafaxine. Outpatients fulfilling criteria for MDD were randomised to receive oral escitalopram 10-20 mg/day or venlafaxine 75-150 mg/day for 8 weeks. Patient-reported outcomes (EuroQOL questionnaire, Quality of Life Depression Scale), use of medical services and absence from work (relating to the previous 3 months) were recorded at baseline, with repeated measurements at week 8. Unit costs in year values were applied to the resource utilisation data. A cost-effectiveness analysis was performed using the EuroQOL score as the effectiveness measure. The perspective was that of the healthcare payer, with a societal perspective considered in a sensitivity analysis. RESULTS: Statistically significant improvements in patient-reported outcomes (vs baseline) were observed in both groups after 8 weeks’ treatment. Patients treated with escitalopram tended to report fewer problems on the EuroQOL dimensions than venlafaxine recipients. Mean per-patient costs in euros (euro, year 2003 values) for the escitalopram group, compared with the venlafaxine group, were 32% lower (110 euros vs 161euros) from a healthcare perspective, although this was not a statistically significant difference. Differences were related to lower drug acquisition costs and fewer hospitalisations for escitalopram than venlafaxine recipients. A multivariate model adjusting for baseline characteristics showed that escitalopram reduced direct costs compared with venlafaxine (p = 0.007). Bootstrapped distributions of the incremental cost-effectiveness ratios also showed similar effectiveness but lower costs for escitalopram compared with venlafaxine. Inclusion of indirect costs led to similar results. CONCLUSION: This prospective economic analysis suggests that escitalopram has similar effectiveness to venlafaxine in the treatment of MDD, but may be associated with lower healthcare costs. These findings are consistent with previously published economic evaluations.