OBJECTIVE: To compare the cost-effectiveness of etanercept + methotrexate (MTX) and infliximab + MTX for the treatment of severe rheumatoid arthritis (SRA) patients in Brazil. METHODS: An analytic-decision model for projecting the annual costs of treating SRA in Brazil was developed considering local procedures and a payer perspective. The clinical effectiveness was based on American College of Rheumatology criteria for 20% (ACR20), 50% (ACR50), and 70% (ACR70). For infliximab a 70kg patient was considered. The data used in the analysis were obtained from public sources: Official Price List; products labels; Official Physicians Fees List and local articles published in indexed journals. To ensure similarities in patient profile, the ACR20, 50, 70 responses from: Weinblatt, 1999 (etanercept) and Maini, 1999 (infliximab) were chosen for the effectiveness measures. RESULTS: For the annual treatment cost, Infliximab 10mg/kg every 4 weeks (INF.10/4 = R$ 255,935) was the most expensive therapy followed by infliximab 10mg/kg every 8 weeks (INF.10/8 = R$ 148,284); etanercept 50mg every week (ETA = R$ 88,247); infliximab 3mg/kg every 4 weeks (INF.3/4 = R$ 80,104); and infliximab 3mg/kg every 8 weeks (INF.3/8 = R$ 47,809). However, assuming INF.3/4 as the average dosing schedule, ETA shows lower average cost-effectiveness (C/E) ratios for ACR20: (ETA) R$ 124,291 vs. (INF.3/4) R$ 160,209; ACR50: (ETA) R$ 226,273 vs. (INF.3/4) R$ 276,222; and ACR70: (ETA) R$ 588,310 vs. (INF.3/4) R$ 728,222. Etanercept offers favorable C/E ratios in 3 out of 4 scenarios for each ACR response. This was confirmed by a one-way sensitivity analysis applying a 10% variance in either prices or in ACR responses. The incremental cost-effectiveness ratio ranged from R$ 38,772 to R$ 203,522 for ETA relative to INF.3/4. CONCLUSIONS: Findings suggest etanercept as a competitive cost-effectiveness therapy. Etanercept performs better especially when it is compared with the intermediate/high dosages per kilo of infliximab.