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Standard treatments for chronic hepatitis B (CHB) include interferon-alpha (IFN-α) and lamivudine (LAM), but these are associated with adverse effects and viral resistance, respectively. The aim of this systematic review and economic evaluation was to assess the clinical effectiveness and cost-effectiveness of two alternative drugs for the treatment of adults with CHB: adefovir dipivoxil (ADV) and pegylated IFN-α-2a. We searched electronic databases, including Cochrane Systematic Reviews and Medline, for literature that met criteria defined in a research protocol. Retrieved articles were independently assessed for inclusion by two reviewers. We developed a Markov state transition model to estimate the cost-effectiveness (cost-utility) of pegylated IFN-α-2a and of ADV compared with nonpegylated IFN-α-2a, LAM and best supportive care. Seven randomized controlled trials and two systematic reviews met the inclusion criteria for our review of clinical effectiveness. ADV was significantly more effective than placebo or ongoing LAM in reducing levels of hepatitis B virus (HBV) DNA. Rates of hepatitis B e antigen (HBeAg) seroconversion were higher among patients receiving ADV than either placebo or ongoing LAM. Patients treated with pegylated IFN-α-2a, either as monotherapy or in combination with LAM, showed significantly reduced HBV DNA levels compared with patients treated with LAM monotherapy. HBeAg seroconversion rates at follow-up were significantly higher for pegylated IFN-α-2a patients than for those receiving LAM monotherapy. Results of our cost-effectiveness analysis demonstrate that incremental costs per quality adjusted life year (QALY) for a range of comparisons were between £5994 and £16 569, and within the range considered by NHS decision-makers to represent good value for money.