OBJECTIVES: Rituximab (RTX; MabThera), a unique selective B-cell therapy, represents a new option for patients with rheumatoid arthritis (RA) who have responded inadequately to anti-TNF therapies. We analysed the cost-effectiveness of RTX from a German societal perspective. METHODS: We developed a model using published ACR response rates for RTX and current treatment choices (adjusted for study population differences), plus available observational data, German registry resource-utilisation data and baseline patient characteristics from the REFLEX study. We modelled real-life treatment for 10,000 RA patients who had responded inadequately to one anti-TNF therapy over the patient's lifetime, assuming an average treatment duration for biological therapy (in combination with methotrexate) of up to 4.25 years. QALYs were mapped from a disease severity measure (HAQ score). Relevant costs (2004–5 Euros [€]) included those related to drug (including administration and monitoring) and indirect costs through reduced productivity. Costs and benefits were discounted at 3.5% per year. We assessed either adding RTX or using it instead of adalimumab. RESULTS: Annual average drug therapy costs were €10,208 for RTX + MTX, €22,574 for adalimumab, €22,630 for etanercept, and €13,484 for infliximab. RTX as an additional treatment gave an additional 0.531 QALYs at an incremental total direct medical cost of €16,527 over the patient's lifetime. With an incremental QALY of 0.665 this would result in an incremental direct medical cost of €24,844 per QALY. The corresponding ICERs were €25,985 and €17,058 per QALY gained. Using RTX as an alternative to adalimumab would produce a small incremental QALY gain, together with lifetime cost-savings of €23,143. CONCLUSIONS: In Germany, the incremental cost of adding RTX to options for RA-patients who respond inadequately to anti-TNF therapy is favourable using commonly accepted cost-effectiveness thresholds. As a replacement for a currently used drug in second-line biologic DMARD, RTX could lower average annual treatment costs.