Objective: To assess whether clozapine is likely to be more cost-effective than other second-generation antipsychotics (SGAs) in people with schizophrenia. Methods: An integrated clinical and economic multicenter, rater-blind, randomized controlled trial (RCT) compared clozapine to the class of other SGAs, using the perspectives of the National Health Service, social support services, and patients. The practice setting was secondary and primary care in the United Kingdom; patients were followed for 1 year. Incremental cost-effectiveness ratios (ICERs), net benefit statistics, and cost acceptability curves were estimated. Results: The ICER for clozapine was £33,240 per quality-adjusted life-year (QALY) (range £23,000-70,000 for the sensitivity analyses). The proportion of simulations when clozapine was more cost-effective than other SGAs reached 50% if decision-makers are prepared to pay £30,000 to £35,000 per QALY. This is at the top of the range of acceptable willingness-to-pay values per QALY implied by decisions taken by the National Institute for Health and Clinical Excellence (NICE). Conclusions: This study adds to a limited body of evidence comparing clozapine to other SGAs and is the first economic and clinical RCT to compare clozapine to the class of other SGAs using the lower cost of generic clozapine and a pragmatic trial design. Policy decisions by the NICE suggest that additional reasons would be needed to accept clozapine as effective and efficient if it had a high probability of having ICERs more than £35,000 per QALY. The results and limitations of the analysis suggest that there is still a need for further economic evaluation of clozapine. © 2007, International Society for Pharmacoeconomics and Outcomes Research (ISPOR).