BACKGROUND: No study has investigated the cost and effectiveness of androgen deprivation therapy (ADT) and other curative treatment therapies among the Medicare population, and no study has taken into consideration the long-term side effects associated with ADT. OBJECTIVE: To examine if adding ADT was cost-effective when accounting for ADT-related long-term side effects in men with prostate cancer. METHODS: For this cost-utility analysis, we used the Surveillance, Epidemiology, and End Results (SEER)-Medicare linked database to estimate and compare patient survival, costs from a health payer's perspective, and cost-effectiveness of 3 treatment modalities for advanced prostate cancer patients, including radiation therapy, radiation plus ADT, and active surveillance. We also estimated quality-adjusted life-years (QALYs) by assigning appropriate health state utility values obtained from the literature for each phase of care and for long-term side effects. Propensity score matching was used to control for bias and confounding that were inherent to the observational study design. RESULTS: Adding ADT to radiation therapy increased median patient survival by 0.71 years. The incremental cost-effectiveness ratio (ICER) for radiation plus ADT versus radiation alone was $63,049 and $295,995 per mean life year gained for radiation compared with active surveillance, respectively. Treatment-associated adverse side effects substantially reduced QALYs gained. Compared with radiation only, the incremental cost of radiation plus ADT was $127,900 per mean QALY and was nearly 80% cost-effective at a willingness-to-pay threshold of $210,000 per QALY. CONCLUSIONS: Despite ADT-associated costs and long-term side effects, compared with radiation alone, radiation plus ADT was cost-effective at $127,900 per QALY. Copyright (C) 2019, Academy of Managed Care Pharmacy. All rights reserved.