In the present study, the socioeconomic impact of the use of the acetylcholinesterase inhibitor donepezil in patients with mild to moderate Alzheimer’s disease (AD) living in France was examined. A model was created to extrapolate over a 3-year period the results from placebo-controlled trials together with epidemiological and prevalence data. Costs considered in the model were net societal costs associated with paid and unpaid assistance, general medical consumption and institutional care. The model suggested that delays in cognitive decline and functional dependence due to treatment reduced the time spent in institutional care and the burden on caregivers. Over a 3-year period, total net costs of caring for untreated patients with an initial Mini-Mental State Examination score ranging from 10 to 26 were EUR 53,206 compared with EUR 42,720 for a patient treated with donepezil – an annual cost saving of approximately EUR 3,500 per patient. Cost savings were mainly due to savings in unpaid caregiver time, which, apart from patient institutionalization, represented the most costly component of total care in this study but had no direct budgetary impact. Overall, these data suggest that donepezil is a cost-effective treatment for mild to moderately impaired AD patients living in France.