OBJECTIVES: To assess the cost-effectiveness of indacaterol in comparison to tiotropium and formoterol from Brazilian public healthcare system perspective. METHODS: A Markov model was designed to project costs and outcomes associated with disease progression of patients with COPD over 3-years time horizon. The model health states are divided by severity of COPD (mild, moderate, severe and very severe) with each of these states divided into three states: no exacerbation, non-severe and severe exacerbations. The target population consists of patients with moderate or severe COPD, and the health states for mild and very severe COPD are included to account for those who improve in first cycle to the mild state and those who progress to very severe state over time. Efficacy data and exacerbation rates were obtained from the pivotal trials. Mortality data for COPD-specific states are based on study by Rutten-van Mölken et al. COPD related medical resource utilization patterns were assessed through clinical experts’ panel. Unit costs were extracted from Brazilian official lists. Outcomes are expressed as life years gained (LYG). One-way sensitivity analysis was performed. Annual discount rate of 5% was applied both to costs and outcomes. RESULTS: Base case analysis estimated incremental LYG for indacaterol of 0.010 vs. formoterol and 0.006 vs. tiotropium. Indacaterol was cost-saving as compared to tiotropium (incremental cost of -2,667BRL). Comparing to formoterol, the projected ICER was 25,458BRL per LYG. The variables that most influenced the results were time horizon, mortality rates and baseline population. CONCLUSIONS: Indacaterol is a valuable alternative for COPD patients, being a cost-saving treatment vs. tiotropium with incremental clinical benefits and lower costs. Versus formoterol, indacaterol has incremental benefit, at a reasonable incremental cost.