OBJECTIVES: Multiple sclerosis (MS) causes significant disability and diminished quality of life globally. BG-12 is a new oral treatment for relapsing forms of MS that is currently approved in the US and Canada and is under regulatory review in Europe. A cost-effectiveness model was developed to compare the health economic impact of BG-12 against other disease-modifying therapies (DMTs) as first-line treatment for relapsing-remitting MS (RRMS) from a Ministry of Health perspective in Canada.   METHODS: A cohort-based Markov model was developed to simulate patients’ progression through a series of health states, based on the Kurtzke Extended Disability Status Scale (EDSS) over a lime-time horizon. Patients entered the model based on a distribution of baseline EDSS scores, from which they could either progress/regress to higher/lower EDSS state, or remain in the same state. Relapses could occur at any EDSS score. Results from a mixed-treatment comparison were used to inform model inputs for disease progression and relapse rates per treatment. In addition to the overall discontinuation rates reported in trials, patients discontinued treatment on conversion to secondary-progressive MS or reaching EDSS 7. Costs included direct medical costs stratified by EDSS score, along with relapse, adverse events (AEs), and treatment-related costs. Utilities were accrued based on time spent in each EDSS state, adjusted for disutilities associated with AEs and caregiver burden. A 5% discount rate was applied. RESULTS: Compared with glatiramer acetate, BG-12 yielded 0.396 incremental quality adjusted life years (QALYs) at an incremental cost of CAD22,437, resulting in an ICER of CAD56,649. Compared with Rebif 44µg, BG-12 resulted in an ICER of CAD10,669.  Results were consistent across a wide range of one-way and probabilistic sensitivity analyses.   CONCLUSIONS: Based on traditional cost-effectiveness thresholds in Canada, BG-12 can be considered a cost-effective option compared to other first line DMTs.