OBJECTIVES: Multiple sclerosis causes significant disability and mortality globally and is especially prevalent in Canada and across Europe. BG-12 is an orally administered disease modifying treatment for relapsing-remitting MS (RRMS) patients currently on the market in the United States and Canada and under review in Europe. A budget impact model (BIM) was developed to assess the financial consequences of introducing BG-12 for the treatment of RRMS in Canada. METHODS: A BIM calculated the financial consequences of introducing BG-12 in Canada over three years based on RRMS prevalence, treatment market share, and clinical effects.  RRMS prevalence in Canada was derived from published literature and natural relapse rates and disease state distribution from clinical trial data. It was conservatively assumed that 100% of RRMS patients were treated with a disease modifying treatment.  BG-12 was assumed to absorb market share proportionally from the following current treatments: interferon beta-1a IM, interferon beta-1a SC, interferon beta-1b, glatiramer acetate, natalizumab, and fingolimod.  Treatment efficacy, in terms of reductions in relapse rate, and treatment discontinuation rates were determined from a mixed treatment comparison. Treatment costs (including costs of acquisition, monitoring, and administration) and the cost of relapse were considered. Deterministic one-way sensitivity analyses were conducted to assess the most sensitive input parameters. RESULTS: Over 3 years, introduction of BG-12 resulted in an average annual increase of CAD279 per treated patient per year, with reductions in costs associated with relapses (CAD192/patient/year) partially offsetting increased drug acquisition costs (CAD471/patient/year). On a population level, the average annual cost increase was CAD16,494,850. The main drivers of budget impact were cost of BG-12, drop-out rates, proportion of RRMS patients treated, and market share assumptions. CONCLUSIONS: The acquisition costs of BG-12 for treatment of RRMS are predicted to be partially offset by reduced costs of relapses in the Canadian healthcare system.