OBJECTIVES: To examine the clinical effectiveness and cost-effectiveness of newer antiepileptic drugs (AEDs) for epilepsy in children: gabapentin, lamotrigine, levetiracetam, oxcarbazepine, tiagabine, topiramate and vigabatrin. DATA SOURCES: Electronic databases. Drug company submissions. REVIEW METHODS: For the systematic review of clinical and cost-effectiveness, studies were assessed for inclusion according to predefined criteria. Data extraction and quality assessment were also undertaken. A decision-analytic model was constructed to estimate the cost-effectiveness of the newer agents in children with partial seizures, the only condition where there were sufficient trial data to inform a model. RESULTS: The quality of the randomised controlled trial (RCT) data was generally poor. For each of the epilepsy subtypes considered in RCTs identified for this review (partial epilepsy with or without secondary generalisation, Lennox-Gastaut syndrome, infantile spasms, absence epilepsy and benign epilepsy with centrotemporal spikes), there is some evidence from placebo-controlled trials that the newer agents tested are of some value in the treatment of these conditions. Where active controls have been used, the limited evidence available does not indicate a difference in effectiveness between newer and older drugs. The data are not sufficient to inform a prescribing strategy for any of the newer agents in any of these conditions. In particular, there is no clinical evidence to suggest that the newer agents should be considered as a first-choice treatment in any form of epilepsy in children. Annual drug costs of the newer agents ranges from around 400 pound to 1200 pound, depending on age and concomitant medications. An AED that is ineffective or has intolerable side-effects will only be used for a short period of time, and many patients achieving seizure freedom will successfully withdraw from drug treatment without relapsing. The results of the decision-analytic model do not suggest that the use of the newer agents in any of the scenarios considered is clearly cost-effective but, similarly, do not indicate that they are clearly not cost-effective. CONCLUSIONS: The prognosis for children diagnosed with epilepsy is generally good, with a large proportion responding well to the first treatment given. A substantial proportion, however, will not respond well to treatment, and for these patients the clinical goal is to find an optimal balance between the benefits and side-effects of any treatment given. For the newly, or recently, diagnosed population, the key question for the newer drugs is how soon they should be tried. The cost-effectiveness of using these agents early, in place of one of the older agents, will depend on the effectiveness and tolerability of these agents compared with the older agents; the evidence from the available trial data so far suggests that the newer agents are no more effective but may be somewhat better tolerated than the older agents, and so the cost-effectiveness for early use will depend on the trade-off between effectiveness and tolerability, both in terms of overall (long-term) treatment retention and overall utility associated with effects on seizure rate and side-effects. There are insufficient data available to estimate accurately the nature of this trade off either in terms of long-term treatment retention or utility. Better information is required from RCTs before any rational evidence-based prescribing strategy could be developed. Ideally, RCTs should be conducted from a 'public health' perspective, making relevant comparisons and incorporating outcomes of interest to clinicians and patients, with sufficiently long-term follow-up to determine reliably the clinical utility of different treatments, particularly with respect to treatment retention and the balance between effectiveness and tolerability. RCTs should mirror clinical practice with respect to diagnosis, focusing on defined syndromes or, where no syndrome is identified, on groups defined by specific seizure type(s) and aetiology. Epilepsy in children is a complex disease, with a variety of distinct syndromes and many alternative treatment options and outcomes. Diagnosis-specific decision-analytic models are required; further research may be required to inform parameter values adequately with respect to epidemiology and clinical practice.