OBJECTIVES: NICE has recommended etanercept for use in patients with severe chronic plaque psoriasis, defined as a Psoriasis Area and Severity Index (PASI) of 10 or more and a Dermatology Life Quality Index (DLQI) of more than 10. This study assessed the cost-effectiveness of intermittent therapy with etanercept 25mg twice weekly (biw) or 50mg biw compared with no systemic therapy (NST) in patients with less severe disease. METHODS: An economic model was constructed to estimate the incremental cost per quality adjusted life year (QALY) for etanercept compared with NST. Patients considered had chronic plaque psoriasis, PASI of 10-12 and any DLQI value at baseline.  Response rates were taken from a pooled analysis of three studies of etanercept. Utility gain associated with response was assessed using patient level DLQI change mapped to EQ5D. Clinical and quality of life outcomes were extrapolated to a time horizon of ten years. Costs were estimated from a UK payer perspective including drug cost, administration visits and hospital stay for treatment failures. Probabilistic sensitivity analysis was undertaken. RESULTS: The model estimated incremental cost per QALY gained compared with NST to be: £2,850 (95% CI: Dominant to £6,084) for etanercept 25mg biw and £10,351 (£7,056, £15,911) for etanercept 50mg biw. Cost-effectiveness was sensitive to the duration of treatment holiday and response rate after therapy interruption.  Cost per QALY gained in patients with baseline PASI in the range 10-72 and poor quality of life at baseline has previously been reported to be £3,299 for etanercept 25mg biw and £10,923 for etanercept 50mg biw.CONCLUSIONS: The model found treatment of a less severe psoriasis population to be cost-effective. Cost-effectiveness was comparable to findings in patients with more severe disease and poor quality of life at baseline.