Objective This study intends to introduce a model of cost-effective analysis by comparing olanzapine with haloperidol, which is the conventional treatment in refractory schizophrenia.Method Data from clinical trials were used to compare olanzapine with haloperidol in patients with refractory schizophrenia. Outcomes were compared among direct and indirect cost with the view point of health care provider at Ramathibodi Hospital and society in one year of treatment by path analysis and cost analysis, sensitivity analysis was shown for clinical decision when there is some cost or path probability have been changed so the decision will be changed at some threshold to another alternative.Results The total cost of olanzapine treatment to get one healthy of refractory schizophrenia is 668,928.0 Baht per year. On the other hand the total cost for haloperidol is 1,565,337.8 Baht per year. Olanzapine provides net benefit to one by 896,409.8 Baht per year. In the sensitivity analysis showed that olanzapine will always provide this advantage as long as the response rate of olanzapine is more than 21.5%. Haloperidol will provide the same cost effective to the patient if its response rate is better than 27.5%.Conclusions The result of this economic evaluation suggests that the total one year cost of treatment by olanzapine appears to be more effective than haloperidol in the treatment of TRS. This is the impact of the cost reduction of medical care for TRS patients during one year of treatment.