OBJECTIVES: Inflammatory autoimmune diseases such as rheumatoid arthritis (RA) and chronic plaque psoriasis (PsO) have a significant negative impact on healthcare budgets and patients’ quality of life. Etanercept is recommended as an option by NICE for treatment of patients with RA and PsO. Etanercept biosimilars offer similar efficacy and safety profiles of originator’s product but at a lower acquisition cost. The objective of this study is to assess the favourable impact of etanercept biosimilar launches on the healthcare budget in the UK. METHODS: A budget impact model was developed from UK healthcare perspective with a time horizon of one year to compare two scenarios: with or without etanercept biosimilars. Published literature and IMS databases were searched to obtain the number of RA and PsO patients on etanercept. The model includes drug acquisition cost, administration and monitoring costs only. Other medical costs such as hospitalization costs and AE costs were not included since they are expected to be same for both etanercept and its biosimilars. Sensitivity analyses were performed for key parameters. RESULTS: Our model shows savings of £8.4 million in the first year of launch of etanercept biosimilars if listed at a 30% discount with 25% of patients move from originator etanercept to a biosimilar over a period of 12 months. Sensitivity analysis shows that savings can increase further up to £29.0 million if 50% of the existing patients move from originator etanercept to a biosimilar within 3 months of launch. The saving from biosimilars could be reinvested to offer earlier access to biologics to 4,437 patients who are currently receiving disease modifying anti-rheumatic drugs (DMARDs) as systemic 1st line therapies. CONCLUSIONS: The model shows substantial potential saving for UK healthcare budget in the first year of launch of etanercept biosimilars.