Ursodeoxycholic acid (UDCA) is a safe and effective treatment for patients with primary biliary cirrhosis (PBC), but the cost of this drug has raised concerns regarding cost-effectiveness. The aim of our study was to determine the cost-effectiveness of UDCA in PBC. We compared the costs and outcomes of managing PBC patients with and without UDCA. From two previously published trials, the effectiveness of UDCA was determined by comparing the annual reduction in the development of ascites, varices, variceal bleeding, encephalopathy, liver transplantation, and death between the treatment groups. Average annual costs for each of these events were estimated based on literature and institutional data. Approximately twice as many major events occurred in the placebo group compared with the UDCA group. The relative risk (RR) of liver transplantation (1.95; 95% CI: 1.14-3.68) and development of esophageal varices (3. 11; 95% CI: 1.57-10.65) were significantly higher in the placebo group compared with the UDCA group. There were no significant increases in the RR of ascites, variceal bleeding, encephalopathy, or death between the two groups. Based on the estimated annual cost of managing these events and the annual costs of UDCA ($2,500), there was an annual cost savings per patient of $1,372. Compared with the placebo group, patients receiving UDCA had a lower incidence of major complications and lower medical care costs.