OBJECTIVES Costly disease modifying therapies (DMTs: interferon beta-1a and beta-1b and glatiramer acetate) were introduced in the 1990s to reduce the frequency of relapses and to slow disease progression in patients with multiple sclerosis (MS). At the same time, these therapies are characterized by uncomfortable side effects and high costs. This study examines data from a 2000-2005 population-based survey of MS patients from the Sonya Slifka Study to evaluate the cost-effectiveness (CE) of DMTs in the US compared to no DMT. METHODS We generated 10-year disease progression paths using first-order Markov models to estimate transitional probabilities and logistic models to estimate relapse rates based on published estimates of DMT treatment effects. To estimate costs, we used Medicare rates for reported utilization events. Outcomes were measured as gains in quality-adjusted life years (QALY) and relapse-free years, differences in the number of disease progressions (as measured by disability status), and gains in years spent in lower disability states. Monte Carlo (n=50) simulations, resampling (n=250) methods, and sensitivity analyses were conducted to evaluate uncertainty. RESULTS Using DMT for 10 years resulted in significant health gains. The choice of the optimal therapy depends on the outcome, with interferons generating the highest QALY gain (0.187 QALY), fewer disease progressions (by 0.91), fewer years spent in higher disability states (by 0.81 year), and leading to more relapse-free years (by 1.12 year) compared to glatiramer or no DMT. The CE of all DMTs exceeded $1,000,000/QALY, with glatiramer being the most cost-ineffective ($5,209,524/QALY). As the cost of DMT decreases, DMTs become more cost-effective. CONCLUSIONS While the current practice of recommending DMT for any patient with progressive MS results in substantial health gains, these gains come at a very high drug cost, rendering the incremental cost-effectiveness ratios of each of the DMTs far above currently accepted standards.