OBJECTIVES: To evaluate the cost-effectiveness of leflunomide used before tumor necrosis factor (TNF) inhibitors compared with leflunomide after TNF inhibitors in the sequence treatment of rheumatoid arthritis (RA) following the failure of 2 disease-modifying antirheumatic drugs (DMARDs) in Polish setting. METHODS: A cost-utility approach was adopted, evaluating total direct costs incurred by the National Health Fund (NHF) and quality-adjusted life years (QALY). A micro-simulation Markov model was used to estimate utilities and costs. Simulation was executed in 6 months cycles and terminated at the time of the patient’s death. Transition probabilities between health states were calculated based on a systematic review of RCTs and supplemented with published literature if necessary. Health states utilities were taken from published literature. Probabilistic sensitivity analysis was performed. The starting time-point of the model was the failure of two previous DMARDs. Six treatment options were compared. Upon treatment failure it was assumed patients would follow an identical lifetime treatment strategy consisting of: LIM – leflunomide, infliximab, methotrexat, LEM - leflunomide, etanercept, methotrexat, LAM - leflunomide, adalimumab, methotrexat, ILM – infliximab, leflunomide, methotrexat, ELM – etanercept, leflunomide, methotrexat, ALM – adalimumab, leflunomide, methotrexat. RESULTS: Sequences with leflunomide at the beginning of the RA treatment (LIM, LAM, LEM) were dominant over schedules with leflunomide used after TNF inhibitors (ILM, ELM, ALM). Detailed results: LIM vs. ILM (cost difference – 7,788 PLN, QALY difference – 0.002); LEM vs. ELM (cost difference – 18,871 PLN, QALY difference – 0.004); LAM vs. ALM (cost difference – 11,377 PLN, QALY difference – 0.016). CONCLUSIONS: The model predicted that leflunomide should be used before TNF inhibitors. LEM, LAM, LIM sequences for RA patients who have failed DMARDs therapy are less costly and more effective than sequences with leflunomid administrated after TNF inhibitors (ILM, ELM, ALM).