OBJECTIVES: Early diagnosis and aggressive treatment is crucial in rheumatoid arthritis to prevent disease development, joint destruction and cardiovascular disease, which start within first 2 years of disease. This study aims to perform cost-effectiveness analysis of etanercept in early rheumatoid arthritis (ERA) treatment, defined as disease duration from 3 months to 2 years, from the public payer perspective in Brazil. METHODS: A decision model was developed to simulate ERA evolution after treatment with etanercept(50mg/week)+methotrexate (ETN+MTX) or methotrexate (MTX) as first-line therapies and their associated direct costs over a 5-year time horizon. An initial decision tree estimated the number of patients entering Markov model in the following health states: ‘remission’, ‘non-remission’, ‘discontinuation’, and ‘non-response’ (ACR20 criteria). Patients starting on ‘remission’ or ‘non-remission’ states could transit between them or to ‘orthopedic intervention’ (ORT), ‘cardiovascular event – myocardial infarction/stroke’ (CVE), ‘all-cause death’, ‘cardiovascular death’, and ‘surgery-related death,’ or switch to second-line (adalimumab+MTX or infliximab+MTX). Patients initiating on ‘discontinuation’ or ‘non-response’ states switched directly to second-line therapy. Remission (DAS28<2.6) was considered as effectiveness outcome. Clinical data were extracted from literature, and costs from Brazilian official databases, presented in 2012 USD. Univariate sensitivity analyses were performed. A 5% discount rate was applied annually for costs and benefits. RESULTS: For each 1,000 patients, 244 and 106 were in remission at year 5 for ETN+MTX and MTX groups, respectively. The number of [ORT; CVE] was [102; 38] for ETN+MTX and [125; 43] for MTX. Projected treatment costs for ETN+MTX and MTX were 54,433,960USD, and 40,175,096USD, respectively. In cost-effectiveness analysis, ETN+MTX was the most effective alternative (incremental effectiveness: 138) and presented an incremental cost (14,258,866USD) with incremental cost-effectiveness ratio of 102,968USD per remission achieved. CONCLUSIONS: Etanercept in ERA treatment showed to prevent disease progression, with more achieved remissions and avoided ORT and CVE, from the public perspective in Brazil, with associated increase costs.