ABSTRACT: Novel treatments for hepatitis C virus (HCV) infection are highly efficacious but costly. Thus, many insurers cover therapy only in advanced fibrosis stages. The added health benefits and costs of early treatment are unknown.To assess the cost-effectiveness of (1) treating all patients with HCV vs only those with advanced fibrosis and (2) treating each stage of fibrosis.This study used a decision-analytic model for the treatment of HCV genotype 1. The model used a lifetime horizon and societal perspective and was representative of all US patients with HCV genotype 1 who had not received previous treatment. Comparisons in the model included antiviral treatment of all fibrosis stages (METAVIR [Meta-analysis of Histological Data in Virial Hepatitis] stages F0 [no fibrosis] to F4 [cirrhosis]) vs treatment of stages F3 (numerous septa without cirrhosis) and F4 only and by specific fibrosis stage. Data were collected from March 1 to September 1, 2014, and analyzed from September 1, 2014, to June 30, 2015.Six HCV therapy options (particularly combined sofosbuvir and ledipasvir therapy) or no treatment.Cost and health outcomes were measured using total medical costs, quality-adjusted life-years (QALYs), and incremental cost-effectiveness ratios (ICERs), calculated as the difference in costs between strategies divided by the difference in QALYs.We simulated 1000 individuals, but present the results normalized to a single HCV-infected person. In the base-case analysis, among patients receiving 8 or 12 weeks of sofosbuvir-ledipasvir treatment, treating all fibrosis stages compared with treating stages F3 and F4 adds 0.73 QALYs and $28,899, for an ICER of $39,475 per QALY gained. Treating at stage F2 (portal fibrosis with rare septa) costs $19,833 per QALY gained vs waiting until stage F3; treating at stage F1 (portal fibrosis without septa), $81,165 per QALY gained compared with waiting until stage F2; and treating at stage F0, $187,065 per QALY gained compared with waiting until stage F1. Results for other regimens show a similar pattern. At base-case drug prices, treating 50% of all eligible US patients with HCV genotype 1 would cost $53 billion. In sensitivity analyses, the ICER for treating all stages vs treating stages F3 and F4 was most sensitive to cohort age, drug costs, utility values in stages F1 and F2, and percentage of patients eligible for 8-week therapy. Except for patients aged 70 years, the ICER remains less than $100,000 per QALY gained. A 46% reduction in cost of sofosbuvir-ledipasvir therapy decreases the ICER for treating at all fibrosis stages by 48%.In this simulated model, treating HCV infection at early stages of fibrosis appeared to improve health outcomes and to be cost-effective but incurred substantial aggregate costs. The findings may have implications for health care coverage policies and clinical decision making.