Objective: Measure incremental cost-utility and budget impact of etanercept vs. infliximab in moderate-to-severe PSO with >10% body surface area involvement. Methods: We used a Markov decision analysis to compare 2 strategies for PSO: etanercept label dose (50 mg BIW x12 wks, then 25mg BIW); and infliximab label dose (5mg/kg IV at wks 0, 2, and 6, then 5mg/kg Q8W). We derived 60 probability estimates through systematic review of the literature and labels, varying each of these estimates in each sensitivity analysis. We adopted an MCO payer's perspective, and included cost estimates for a comprehensive list of related resources as determined by Medicare and the Red Book. Qulaity-adjusted life-years (QALYs) were estimated by applying utilities from the literature to reported efficacy as measured by PASI scores. We calculated the incremental cost per QALY gained and incremental per-member per month (PMPM) budget impact in a hypothetical MCO of 1 million lives (assuming a 1% prevalence of moderate-to-severe PSO). We discounted costs and effects at 3% per year over a 2-year time horizon. Results: In the base-case analysis, etanercept yielded 1.68 QALYs at a total cost of $28,442 over the 2-year horizon, and infliximab yielded 1.78 QALYs at a cost of $49,906. Compared to etanercept, infliximab cost an incremental $214,640/QALY-gained. In sensitivity analysis, infliximab dominated etanercept when the cost of infliximab fell by 55% (from $691 to $312 per 100mg vial), or when the cost of etanercept increased 83% (from $187 to $342 per 25 mg vial). In budget impact modeling, infliximab cost an incremental $8.94 PMPM vs. etanercept. Conclusion: Decision analysis was used to model relative cost-utility and budget impact of biologic therapies in PSO – a chronic health condition. The incremental cost and budget impact of infliximab vs etanercept exceeds standard benchmarks in the absence of comparative effectiveness from head to head trials.