OBJECTIVES To estimate the incremental cost-effectiveness of bortezomib (BTZ) compared with lenalidomide plus dexamethasone (LEN+DEX) and dexamethasone (DEX) for the treatment of relapsed/refractory multiple myeloma in Sweden. METHODS We constructed a model, using Microsoft® Office Excel 2003 and VBA 6.3 software, to compare the BTZ, LEN+DEX and DEX regimens for relapsed/refractory multiple myeloma. The effects of treatment on time to progression and overall survival (OS) were obtained from published reports of the APEX, MM-009 and MM-010 randomized clinical trials. Costs include drug and administration costs, adverse events, treatment of relapses, and end-of-life costs. Utility estimates are derived from the literature. The analytic framework is based on ‘partitioned survival analysis' that allows survival data to be decomposed into three states: 1) alive before disease progression; 2) alive after progression, and; 3) dead. By computing the amount of time a patient is projected to spend in each state, the model estimates mean OS, quality-adjusted life-years (QALYs), costs and cost per QALY over a 30-year time horizon, and performs both 1-way and probabilistic sensitivity analyses. RESULTS BTZ mean OS is 38.6 months compared to 24.5 and 37.8 months for DEX and LEN+DEX respectively. Mean lifetime direct medical costs per patient are approximately SEK 562,000, 1,064,000 and 1,641,000 for DEX, BTZ and LEN+DEX respectively. Mean incremental cost per QALY of BTZ compared to DEX is SEK 618,000; 95th percentile (424,000, 877,000) and is dominant with respect to LEN+DEX. The two most influential variables in our model are (1) utility prior to relapse, and (2) cost of BTZ chemotherapy. CONCLUSIONS BTZ and LEN+DEX are projected to prolong survival relative to DEX. From a Swedish perspective, BTZ is cost-effective compared to both DEX and LEN+DEX, and the incremental cost per QALY is below the threshold set by the World Health Organization.