This paper presents a summary of the evidence review group (ERG) report into the clinical effectiveness and cost-effectiveness of telbivudine for the treatment of chronic hepatitis B (CHB) in adults based upon a review of the manufacturer's submission to the National Institute for Health and Clinical Excellence (NICE) as part of the single technology appraisal (STA) process. The submission's evidence came from one randomised controlled trial (RCT) (GLOBE) of reasonable methodological quality comparing telbivudine with lamivudine. One other RCT that appeared to meet the inclusion criteria was excluded from the submission. For the primary outcome of therapeutic response telbivudine was statistically superior to lamivudine at weeks 52 and 104 for hepatitis B e antigen (HBeAg)-positive patients, and at week 104 for HBeAg-negative patients. There were statistically significant differences in favour of telbivudine for some secondary outcomes at 2 years including hepatitis B virus (HBV) DNA reduction, HBV DNA non-detectability and alanine aminotransferase normalisation though not for HBeAg-positive patients. In HBeAg-positive patients there was no significant difference between treatment groups for HBeAg loss or seroconversion at any time point. The incidence of adverse events was similar between treatments. Two RCTs comparing entecavir with lamivudine were included in the indirect comparison; however, this was poorly conducted and the results should be treated with caution. The manufacturer developed two economic models to determine the Cost-effectiveness of telbivudine. Evidence on the efficacy of telbivudine and lamivudine was taken from the GLOBE trial; efficacy of adefovir was based on assumption. There was a lack of critical assessment and assurance of the quality of the data used to populate the models. The manufacturer concluded that telbivudine is a cost-effective option compared with lamivudine using evidence from the viral load model [HBeAg-positive patients/HBeAg-negative patients: mean incremental cost 19,087 pound/49,003 pound, mean quality-adjusted life-year (QALY) gain 1.30/4.67, incremental cost-effectiveness ratio (ICER) 14,665 pound/10,497 pound per QALY]. Resubmitted results after a request for clarification by the ERG gave less favourable ICERs (HBeAg-positive patients/HBeAg-negative patients: mean incremental cost 23,983 pound/41,910 pound, mean QALY gain 1.56/2.07, ICER 15,377 pound/20,256 pound per QALY). The manufacturer concluded that telbivudine is a cost-effective option (on its own or followed by adefovir) for patients who have developed resistance to first-fine telbivudine treatment; however, the presentation of the results was not ideal. In conclusion, although telbivudine was statistically superior to lamivudine for most antiviral outcomes, the difference was not clinically significant; in addition, the cost-effectiveness evidence for telbivudine presented in the manufacturer's submission was limited. The NICE guidance issued as a result of the STA states that telbivudine is not recommended for the treatment. of chronic hepatitis B and that people currently receiving telbivudine should have the option to continue therapy until they and their clinicians consider it appropriate to stop.