Our objective was to evaluate data on the cost-effectiveness of febuxostat compared with standard clinical practice with allopurinol in patients with gout that was presented to the Scottish Medicines Consortium (SMC) in 2010. A Markov health-state model estimated the direct health-related costs and clinical benefits expressed as quality-adjusted life-years (QALYs). Adults with chronic gout and established hyperuricaemia received treatment sequences of daily doses of allopurinol 300 mg alone or allopurinol 300 mg followed by febuxostat 80 mg/120 mg. The proportion of patients achieving the target serum uric acid (sUA) level of less than 6 mg/dl (0.36 mmol/l) was linked to the utility per sUA level to generate an incremental cost-effectiveness ratio (ICER). Second-line therapy with febuxostat 80 mg/120 mg versus with allopurinol alone resulted in an ICER of £3,578 per QALY over a 5-year time horizon. Additional univariate analyses showed that ICER values were robust and ranged from £2,550 to £7,165 per QALY when different parameters (e.g., low- and high-dose allopurinol titrations and variations in treatment-induced flare rates) were varied. Febuxostat reduces sUA below the European League Against Rheumatism target of 0.36 mmol/l (6 mg/dl) in significantly more patients with gout than allopurinol in its most frequently prescribed dose of 300 mg per day. The SMC accepted febuxostat as cost-effective as a suitable second-line option for urate-lowering therapy for the treatment of patients with chronic hyperuricaemia in conditions where urate deposition has already occurred (including a history or presence of tophus and/or gouty arthritis) when treatment with allopurinol was inadequate, not tolerated, or contraindicated.