This study compared the cost-effectiveness of 2 strategies for the treatment of reflux oesophagitis. In the first strategy, treatment began with ranitidine 300mg daily for 8 weeks. The alternative strategy began with omeprazole 20mg daily for 4 weeks, and continued with another 4 weeks of omeprazole 20mg daily if patients were unhealed after the first 4 weeks. Those who remained unhealed in both groups after 8 weeks of treatment were administered omeprazole 40mg once daily for 4 weeks. The average cost of treatment and follow-up endoscopies per healed week was Swedish krona (SEK)1140 ($US1 = SEK8) in the ranitidine group, whereas with omeprazole treatment the average cost per healed week was SEK622. The omeprazole strategy was more effective (6.75 healed weeks in a 12-week period) than ranitidine (3.71 healed weeks) and, despite a higher daily cost of treatment, omeprazole resulted in a lower average cost per patient. Sensitivity analysis showed that the conclusion regarding omeprazole being more cost-effective than ranitidine was insensitive to all reasonable changes in the cost parameters. Healing rates from 3 clinical trials also support the robustness of the conclusion in terms of the effect parameter.