Clinical effectiveness of pre-exposure prophylaxis (PrEP) for preventing HIV acquisition in men who have sex with men (MSM) at high HIV risk is established. A static decision analytical model was constructed to inform policy prioritisation in England around cost-effectiveness and budgetary impact of a PrEP programme covering 5,000 MSM during an initial high-risk period. National genitourinary medicine clinic surveillance data informed key HIV risk assumptions. Pragmatic large-scale implementation scenarios were explored. At 86% effectiveness, PrEP given to 5,000 MSM at 3.3 per 100 person-years annual HIV incidence, assuming risk compensation (20% HIV incidence increase), averted 118 HIV infections over remaining lifetimes and was cost saving. Lower effectiveness (64%) gave an incremental cost-effectiveness ratio of + GBP 23,500 (EUR 32,000) per quality-adjusted life year (QALY) gained. Investment of GBP 26.9 million (EUR 36.6 million) in year-1 breaks even anywhere from year-23 (86% effectiveness) to year-33 (64% effectiveness). PrEP cost-effectiveness was highly sensitive to year-1 HIV incidence, PrEP adherence/effectiveness, and antiretroviral drug costs. There is much uncertainty around HIV incidence in those given PrEP and adherence/effectiveness, especially under programme scale-up. Substantially reduced PrEP drug costs are needed to give the necessary assurance of cost-effectiveness, and for an affordable public health programme of sufficient size.