OBJECTIVES: Low persistency for oral 5-ASA drugs is associated with increased risk of relapse of ulcerative colitis(UC) and subsequent costs. We constructed a one-year budget impact model to compare annual all-cause direct incremental costs(IC) of treatment for the health plan(HP) per mild-to-moderate UC patient using oral 5-ASA drugs and associated persistency rates(PRs). METHODS: Assuming a budget holder’s perspective for a one-year horizon, the model analyzed the impact of PR on total UC related all-cause direct IC.  PRs for 5-ASA drugs(mesalamine CR[CRM] 250mg 7% & 500mg 10%, balsalazide disodium[BD] 10%, olsalazine[OLS] 10%, mesalamine DR[DRM] 9%, multi matrix system mesalamine[MMX] 20%) were derived from published literature. UC patients within the HP were distributed to drugs based on September 2009 market share data and classified as persistent if they refilled within a timeframe of up to twice the duration of their prescription.  Annual UC-related pharmacy costs were calculated using net wholesale acquisition cost, and additional all-cause direct ICs for patients with/without relapse were cited from published literature.  Sensitivity analyses varying net drug costs and PRs were performed to determine impact on health care costs. RESULTS: Average annual all-cause UC costs per patient were: $13,135 CRM-250; $13,065 CRM-500; $12,914 BD; $12,804 OLS, $12,688 DRM; $12,255 MMX.  Inpatient costs were lower for MMX($5,667) as compared to market leader(DRM;$6,216) and lowest priced drug alternative(OLS;$6,343).  Sensitivity analyses indicated higher savings/patient for MMX than DRM($462 vs. $30, respectively).  The primary driver for inpatient cost differences was the frequency of relapse reduced by persistency.  A health plan with 1 million covered lives(2,300 UC patients) can save $401,000($0.03 per member/month) by switching 50% of UC patients to MMX.  CONCLUSIONS: This analysis illustrates the impact of medication persistence on reduction of UC relapse and associated health care costs.  Health plans may achieve savings by including drugs with high PRs in their formulary.