Objectives Quality adjusted life years (QALYs) are used commonly as an outcome measure in health economic evaluations. Health state valuations are used to determine the country specific utility values which are necessary to derive QALYs. The objective of this study is to derive an algorithm to estimate utility values for the EQ-5D-3L health states using preferences of Sri Lankan general population.

Methods The time trade off preference elicitation was used to directly value 198 EQ-5D-3L health states in a general population sample (n=780) from Sri Lanka. Four district were used to data collect. The sample was selected by stratified cluster sampling with random selection within clusters. Each participant valued 15 health states via face-to-face interviews. Direct valuation was modelled to find values for the 243 health states. The best fit model was selected based on consistency, parsimony and goodness of fit. Based on logical inconsistency numerous sub samples were also used for model specification. For each model, the numbers of illogical orderings in the resulting value set were also examined.

Results The best model specific action was generalized least squares with random effects. The sub sample consisting of participants with less than seven logical inconsistent observations and producing no illogical ordering in the final value set and was considered the preferred model. Compared to value sets in other countries, a high disutility is associated with level 3 deficits in the mobility dimension. More than 50% of health states in the Sri Lankan value set are deemed worse than death health states.

Conclusions This study derived first EQ-5D-3L utility value set for the South Asian region. The Sri Lankan values deviate markedly from existing values for upper middle and high income countries.