BACKGROUND It is estimated that treating diagnosed depression costs 420 pounds million annually in England and Wales. This economic study analyses treatment of major depression with nefazodone v. imipramine. METHODS The study updates a previously published model using data obtained from the continuation phase of a double-blind one-year placebo-controlled comparison of nefazodone with imipramine. RESULTS Annual costs for nefazodone are lower than those for imipramine, 218 pounds compared to 254 pounds; the cost per successfully treated patient is also lower for nefazodone than for imipramine, 242 pounds v. 323 pounds. Varying the resources included in the treatment patterns still results in lower costs for nefazodone treatment. CONCLUSIONS Based on clinical trial data for patients completing six to eight weeks of depression treatment and followed for at least one year, the model shows that the annual costs of nefazodone are lower than those for the less expensive imipramine.