OBJECTIVES: As the goals of in-vitro fertilization (IVF) treatments are to deliver a healthy child, where even a twin pregnancy is regarded as an adverse outcome, the economic impact of multiple births is an important policy consideration. METHODS: We estimated the potential cost savings by reducing the number of multiple pregnancies and births in Canada over the next five years. The direct medical costs included clinical management costs of singleton, twin and higher order multiple (HOM) pregnancies, hospital delivery costs of mothers and their offspring by multiple birth, term and pre-term birth and the costs of disabilities due to pre-term/low weight birth. The analysis was conducted from the perspective of a third party payer in Canada. All parameters were based on recently published literature. The results were expressed as age-specific incremental costs per live birth. RESULTS: Given the reductions in multiple birth rate equivalent to those reached recently by selected European countries, we estimated that, over the next five years in Canada, the proportions of singletons, twins and HOM could be reduced from 71.2%, 27.5% and 1.3% to 86.6%, 12.8% and 0.6%, respectively. The potential cost savings are estimated to reach $266 million. The over-all incremental cost per live birth could be reduced by $15,228. For women under 35, aged 35-39, and over 40, the incremental cost reductions would be $17,023, $13,860 and $10,749, respectively. The bulk of cost reductions (over 70%) would be attributable to reductions in disability costs related with preterm/low weight births. Extensive sensitivity analysis has been provided. CONCLUSIONS: In the context of limited resources and ever-expanding need for health care services, prudent policies regarding multiple birth reductions are highly desirable.