Objective: To compare medical costs among switching, discontinuing and persisting patients on multiple sclerosis (MS) treatment. Methods: Using the PharMetrics medical claims database, adults diagnosed with MS who initiated treatment with interferon beta (A-Avonex, B-Betaseron, R-Rebif) or glatiramer acetate (C-Copaxone) in 1996-2005 were identified. Within each drug initiator group, patients who persisted with the index treatment, switched drugs, and discontinued MS medications, during the first 18 months after drug start were identified. Total medical costs for the 18 months following treatment switch or discontinuation, and for a randomly selected 18-month period among those who persisted, were compared using multivariate linear regression models. Results: Among 6073 patients who initiated treatment, the mean age was 43 years, 78% were female, and 16% had treatment with a different MS drug prior to index drug start. At 18 months after start of the index drug, 3365 (55%) of patients persisted; 685 (11%) switched, and 2023 (33%) of patients discontinued treatment for at least 90 days. Mean medical costs over 18 months were $10,718, $8,786, and $7,098 among those switching, discontinuing or persisting, respectively. The costs associated with switching and discontinuing treatment were significantly higher (p <0.0001) than with persistence, even when adjusting for patient characteristics, MS drug use, and medical costs during the six months preceding treatment start. Hospitalizations were the primary source of the increased costs (means of $2597, $2191, and $1160 for switching, discontinuing, and persisting, respectively). Conclusion: One year after treatment initiation with index drug, over a third of MS patients discontinue or switch ABCR treatment and incur higher hospitalization related medical costs than those persisting with therapy. Discontinuation or switches due to potential sub-optimal treatment and subsequent hospitalizations may be driven by disease relapses, suggesting a need for more highly effective MS therapies.