The National Institute for Health and Clinical Excellence (NICE) in the UK has recently issued health economic appraisals for the primary and secondary prevention of osteoporotic fracture that are more restrictive than previous guidelines for the management of osteoporosis despite a marked reduction of the cost of intervention. The aim of the present study was to examine the cost-effectiveness of the bisphosphonate, alendronate for the prevention and treatment of fractures associated with osteoporosis. A second aim was to investigate reasons for any disparities in cost-effectiveness between our findings and the NICE appraisals. We compared the effects of alendronate 70 mg weekly by mouth for 5 years with no treatment in postmenopausal women with clinical risk factors for fracture and computed the incremental cost-effectiveness ratio (ICER) using a lifetime simulation model based on Markov cohort methodology. A sensitivity analysis examined other common interventions. Using a threshold of pound sterling 30,000 and pound sterling 20,000 per quality of life-year (QALY) gained to determine cost-effectiveness, alendronate was cost-effective for the primary prevention of fracture in women with osteoporosis irrespective of age as was treatment of women with a prior fragility fracture irrespective of BMD. Cost-effective scenarios were also found in women with strong risk factors for fracture with a bone mineral density value above the threshold for osteoporosis. The results were robust over reasonable assumptions in sensitivity analysis. We conclude that alendronate is a cost-effective agent for the prevention and treatment of fractures associated with osteoporosis. These findings, suitable for informing practice guidance, contrast with recent appraisals from NICE.