To assess the cost-effectiveness of dapagliflozin in addition to standard care versus standard care alone in patients with chronic heart failure and reduced ejection fraction.A Markov model was constructed based on the Dapagliflozin and Prevention of Adverse Outcomes in Heart Failure trial to assess the clinical outcomes and costs of 1000 hypothetical subjects with established heart failure and reduced ejection fraction. The model consisted of three health states: 'alive and event-free', 'alive after non-fatal hospitalisation for heart failure' and 'dead'. Costs and utilities were estimated from published sources. The main outcome was the incremental cost-effectiveness ratio per quality-adjusted life-year gained. An Australian public healthcare perspective was employed. All outcomes and costs were discounted at a rate of 5% annually.Over a lifetime horizon, the addition of dapagliflozin to standard care in patients with heart failure and reduced ejection fraction prevented 88 acute heart failure hospitalisations (including readmissions) and yielded an additional 416 years of life and 288 quality-adjusted life-years (discounted) at an additional cost of A$3,692,440 (discounted). This equated to an incremental cost-effectiveness ratio of A$12,482 per quality-adjusted life-year gained, well below the Australian willingness-to-pay threshold of A$50,000 per quality-adjusted life-year gained. Subanalyses in subjects with and without diabetes resulted in similar incremental cost-effectiveness ratios of A$13,234 and A$12,386 per quality-adjusted life-year gained, respectively.Dapagliflozin is likely to be cost-effective when used as an adjunct therapy to standard care compared with standard care alone for the treatment of chronic heart failure and reduced ejection fraction.