Background: Age-related macular degeneration (AMD) is the leading cause of severe vision loss in the developed world. Through clinical trials, treatment with ranibizumab has proved to be more effective than photodynamic therapy with verteporfin for AMD. The high price of ranibizumab, however, has raised questions about its cost-effectiveness.Methods: Three treatment options were considered in a cost-utility analysis adopting a health care perspective. A decision analytic model was developed to assign patients to four different health states over a 2-year time period. The model inputs were efficacy results of the treatment options in terms of probabilities, costs related to treatment options and vision loss. Costs were expressed in 2007 Norwegian Kroner (NOK), and the health outcome was measured in quality adjusted life years (QALYs). Quality of life weights were taken from a study associating time trade-off utility values with visual acuity levels, while the use of health care was based on expert judgmentResults: When indirect costs were disregarded, the two-year costs of verteporfin, 0.3 mg and 0.5 mg ranibizumab were NOK 198,500, NOK 314,500 and NOK 437,000, respectively with corresponding QALYs of 1.34, 1.50 and 1.51. The incremental costs of replacing verteporfin by 0.3 mg and 0.5 mg ranibizumab were NOK 116,000 and NOK 122,500 with incremental QALYs of 0.16 and 0.015. The incremental cost-effectiveness ratios were NOK 739,500 and NOK 7,976,000, respectively.Interpretation/conclusion: The results of this study indicate that neither treatment with 0.3 mg ranibizumab nor treatment with 0.5 mg ranibizumab is cost-effective as replacement of the conventional PDT treatment when NOK 425,000 is defined as the threshold for incremental costs per QALY. This conclusion may change if it were documented that two year treatment with ranibizumab has benefits beyond the treatment period. The treatment option with 0.3 mg ranibizumab would be cost-effective if the drug costs per dose of ranibizumab were reduced from NOK 9,190 to NOK 6,900 (excl. VAT).