Background and objective: Rheumatoid arthritis (RA) is an autoimmune disease with an unknown aetiology that results in > 9 million physician visits and > 250 000 hospitalisations per year in the US. Tumour necrosis factor-alpha (TNF(alpha) inhibitors are effective agents in treating RA; however, their cost effectiveness as first-line agents has not been investigated. This study aimed to examine the cost effectiveness of using TNF alpha inhibitors (both as monotherapy and in combination with methotrexate) as first-line agents versus methotrexate (monotherapy) from a payer perspective. Methods: A Markov model was developed utilising a discount rate of 3% per annum, a cycle length of I year and a lifetime time-horizon for a hypothetical cohort of US females aged 55-60 years who had been diagnosed with RA. The source of data for predicted probabilities, expected mortality rates and treatment costs in year 2005 US dollars (drug, toxicity, monitoring and hospitalisation) was from the literature. These costs are assigned in 5-year cycles (calculated from initial I-year estimates) along with the effect on quality-adjusted life-years (QALYs), which were calculated using the Health Assessment Questionnaire score. Univariate sensitivity analyses were conducted on all relevant parameters. Results: Adalimumab, etanercept, adalimumab plus methotrexate and infliximab plus methotrexate had incremental cost-effectiveness ratios (ICERs) versus methotrexate monotherapy of $US63769, $US89772, $US194589 and $US409 523 per QALY, respectively. When taking into consideration age at diagnosis, the ICER for etanercept ranged from $US84 129 to $US96 225 per QALY. In considering males for the base-case age at diagnosis, the ICER for etanercept versus methotrexate was $US85 100 per QALY. The average lifetime cost across all treatment arms in a woman diagnosed between 55 and 60 years of age was $US211 702. Conclusion: While these ICERs cannot be used to directly compare one biological agent with another since there are no comparative trials, they do provide a valid comparison versus methotrexate as first-line agents. Depending where the cost-effectiveness threshold is drawn (i.e. whether it is considered to be $US50 000 or $US 100 000 per QALY), etanercept and adalimumab may be considered relatively cost-effective first-line treatments for RA compared with methotrexate monotherapy.