OBJECTIVE: To estimate the clinical and economic benefits of memantine treatment initiated in moderate Alzheimer’s disease (AD) in China, compared with initiation in severe AD only. METHODS: A Markov model with a 5-year time horizon simulated moderate patients’ progression through health states. Two groups were compared: patients receiving memantine from the moderate stage (i.e., at model entry), continuing treatment when reaching the severe stage; patients initiating memantine only when they developed severe disease. RESULTS: After 5 years, fewer patients receiving memantine from the moderate stage were severe (49%), dependent (59%) or aggressive (47%) compared with moderate patients who initiated treatment from severe stage only (58, 67 and 55%, respectively). Total cost of care was lower for treatment from moderate stage (67 billion RMB) when compared with treatment from severe stage (73 billion RMB). CONCLUSIONS: In China, AD treatment with memantine from the moderate stage could result in substantial cost savings.