OBJECTIVES: Develop budget impact model to forecast total cost of treatment for cutaneous T-cell lymphoma (CTCL) for U.S. public and private payer. METHODS: The clinical efficacy and safety data were obtained from the published pivotal study results. Costs of adverse events were estimated based on claims database analysis, AHRQ’s HCUP, and CMS Medicare 2009 databases. Drug cost was estimated based on 2011 AWP price. Epidemiology data was  obtained from NCI-SEER and CDC databases. A budget impact model was implemented over a period of five years, based on a stable population and on different penetration and substitution rates of newly approved therapy. Model was developed in excel based format. Blinded Model design and outputs were tested with payers and KOLs. RESULTS: For rare cancers such as CTCL, the budget impact of treatment with targeted cancer therapies is in the range of $460,000-$530,000 per 1 million covered lives. The per patient per member (PPPM) budget impact of this treatment is 46-53 cents. U.S. payers rated PPPM output as the one of the most important relevant outputs of model. CONCLUSIONS: This budget impact model shows that new treatments for rare forms of cancer are likely to have minimal budget impact on payers. PPPM based outputs are more relevant to payers, than per patient treatment costs. However, an emerging concern is the total budget impact of all therapies indicated for ultra-orphan disorders, which might be an important consideration for future models.