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Objective: To construct a decision analytical model to compare the costs and clinical consequences of treating patients with celecoxib or various nonsteroidal anti-inflammatory drug (NSAID)/gastrointestinal (GI) co-therapy regimens for the management of osteoarthritis and rheumatoid arthritis. The model quantified the number of patients expected to experience any GI complication commonly associated with NSAID therapy. Design: Resource use for the treatment of each GI complication in the model was estimated after consulting Canadian experts. Standard unit costs from Ontario were applied to resources to calculate the cost of each complication. Main outcome measures and results: The model revealed that the NSAID-alone regimen was associated with the lowest cost [$262 Canadian dollars ($Can) per patient per 6 months] followed by the celecoxib regimen ($Can273), diclofenac/ misoprostol ($Can365), NSAID + histamine H receptor antagonist ($Can413), NSAID + misoprostol ($Can421), and NSAID + proton pump inhibitor ($Can731). A break-even analysis showed that up to 80% of the study cohort could be treated with celecoxib instead of the NSAID-alone regimen without increasing the health system's overall budget. Celecoxib was associated with the fewest GI-related deaths, hospitalised events, symptomatic ulcers, and cases of anaemia. The celecoxib regimen was also associated with the fewest cases of upper GI distress. Sensitivity analyses revealed that the model was most sensitive to the distribution of GI risk in the population and to the ingredient costs of the treatment alternatives. Conclusions: This model indicates that the use of celecoxib could lead to the avoidance of a significant number of NSAID-attributable GI adverse events, and the incremental cost of using celecoxib for arthritis patients ≥65 years of age in place of current treatment alternatives would not impose an excessive incremental impact on a Canadian provincial healthcare budget. [ABSTRACT FROM AUTHOR]