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Although diacetylmorphine has been proven to be more effective than methadone maintenance treatment for opioid dependence, its direct costs are higher. We compared the cost-effectiveness of diacetylmorphine and methadone maintenance treatment for chronic opioid dependence refractory to treatment.We constructed a semi-Markov cohort model using data from the North American Opiate Medication Initiative trial, supplemented with administrative data for the province of British Columbia and other published data, to capture the chronic, recurrent nature of opioid dependence. We calculated incremental cost-effectiveness ratios to compare diacetylmorphine and methadone over 1-, 5-, 10-year and lifetime horizons.Diacetylmorphine was found to be a dominant strategy over methadone maintenance treatment in each of the time horizons. Over a lifetime horizon, our model showed that people receiving methadone gained 7.46 discounted quality-adjusted life-years (QALYs) on average (95% credibility interval [CI] 6.91–8.01) and generated a societal cost of $1.14 million (95% CI $736 800–$1.78 million). Those who received diacetylmorphine gained 7.92 discounted QALYs on average (95% CI 7.32–8.53) and generated a societal cost of $1.10 million (95% CI $724 100–$1.71 million). Cost savings in the diacetylmorphine cohort were realized primarily because of reductions in the costs related to criminal activity. Probabilistic sensitivity analysis showed that the probability of diacetylmorphine being cost-effective at a willingness-to-pay threshold of $0 per QALY gained was 76%; the probability was 95% at a threshold of $100 000 per QALY gained. Results were confirmed over a range of sensitivity analyses.Using mathematical modelling to extrapolate results from the North American Opiate Medication Initiative, we found that diacetylmorphine may be more effective and less costly than methadone among people with chronic opioid dependence refractory to treatment.