OBJECTIVES: Patients with severe chronic hand eczema (CHE) refractory to steroids have few therapeutic options. Recently, alitretinoin has been suggested as a new treatment option for those patients and its cost-effectiveness has been accepted in European countries. However, the cost-effectiveness outcomes of using alitretinoin have rarely been examined in other countries. Our study aims to assess the cost-effectiveness of alitretinoin compared to previous supportive care from the societal perspective of South Korea.  METHODS: A markov model was constructed to project the incremental cost effectiveness ratio (ICER) per quality-adjusted life-year (QALY) for every 12-week up to 20 years. Clinical effectiveness outcomes were drawn from previous clinical studies. Costs and utilization patterns of medications were obtained from the survey and focus group interviews with dermatologists and pharmacists. The EQ-5D values were mapped from the Dermatology Life Quality Index according to patients’ Physician Global Assessment scores. All costs were converted to 2016 January US dollars of 2016 January. One-way sensitivity analyses regarding discount rate, alitretinoin price, definition of relapse, utility values, and the number of treatment terminated patients were performed. Both costs ($) and QALY were annually discounted at 5% rate.  RESULTS: The use of alitretinoin treatment over the supportive care during 3 years yielded in the ICER of $15,854/QALY. The ICER values kept decreasing from $31,350/QALY to $8,917/QALY as the time horizon extended from 1 to 20 years. These results were robust to all sensitivity analyses with ICERs between $8,525/QALY and $24,386/QALY during 3 years.  CONCLUSIONS: Our study projected the cost-effectiveness of using alitretinoin and the results showed that alitretinoin was highly cost effective for patients with severe CHE refractory to topical steroids in South Korea considering the ICER value lesser than the GDP per capita.