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Background  Radical prostatectomy is the most common treatment for localised prostate cancer in New Zealand. Active surveillance was introduced to prevent overtreatment and reduce costs while preserving the option of radical prostatectomy. This study aims to evaluate the cost-effectiveness of active surveillance compared to watchful waiting and radical prostatectomy.    Methods  Markov models were constructed to estimate the life-time cost-effectiveness of active surveillance compared to watchful waiting and radical prostatectomy for low risk localised prostate cancer patients aged 45–70 years, using national datasets in New Zealand and published studies including the SPCG-4 study. This study was from the perspective of the Ministry of Health in New Zealand.    Results  Radical prostatectomy is less costly than active surveillance in men aged 45–55 years with low risk localised prostate cancer, but more costly for men aged 60–70 years. Scenario analyses demonstrated significant uncertainty as to the most cost-effective option in all age groups because of the unavailability of good quality of life data for men under active surveillance. Uncertainties around the likelihood of having radical prostatectomy when managed with active surveillance also affect the cost-effectiveness of active surveillance against radical prostatectomy.    Conclusions  Active surveillance is less likely to be cost-effective compared to radical prostatectomy for younger men diagnosed with low risk localised prostate cancer. The cost-effectiveness of active surveillance compared to radical prostatectomy is critically dependent on the ‘trigger’ for radical prostatectomy and the quality of life in men on active surveillance. Research on the latter would be beneficial.    Electronic supplementary material  The online version of this article (doi:10.1186/s12885-017-3522-z) contains supplementary material, which is available to authorized users.

The cost-effectiveness of active surveillance compared to watchful waiting and radical prostatectomy for low risk localised prostate cancer