OBJECTIVES: There is a wide range of treatments for moderate-to-severe psoriasis, including oral systemics, biologics, and phototherapies; we evaluated their cost-effectiveness (in US dollars). METHODS: We conducted a systematic review of published, clinical studies from 1978 to 2004 describing outcomes for moderate-to-severe psoriasis in terms of the Psoriasis Area and Severity Index (PASI). We determined the weighted mean PASI improvement across studies for acitretin, alefacept, cyclosporine, efalizumab, etanercept, infliximab, methotrexate, narrowband ultraviolet B (NBUVB), broadband ultraviolet B (BBUVB), psoralen with ultraviolet A (PUVA), BBUVB combined with acitretin, and PUVA combined with acitretin. The model perspective is of the US health systems payer, and includes 1-year medication (US Average Wholesale Price) and related treatment (Medicare reimbursement) costs. Cost-effectiveness (defined as the cost per 1% PASI improvement) was calculated as: Total Treatment Costs [medications or phototherapy + administration of treatment (e.g., IV infusion) + monitoring (e.g., diagnostic procedures) + risk-adjusted costs of adverse events] divided by mean PASI improvement. RESULTS: We found wide variation in annual drug costs, ranging from $1388 (methotrexate) to $24,894 (infliximab). Annual costs of treatment administration ranged from $0 (oral systemics) to $1438 (infliximab). Annual costs of monitoring ranged from $0 (etanercept) to $2306 (alefacept). Risk-adjusted costs of adverse events ranged from $0 to $98. PASI improvement varied from 37% (alefacept 15 mg IV) to 85% (PUVA with acitretin). The annual cost per 1% PASI improvement was: $37 for methotrexate, $46 PUVA, $91 cyclosporine, $120 NBUVB, $166 PUVA with acitretin, $167 BBUVB with acitretin, $197 acitretin, $265 BBUVB, $325 infliximab, $357 efalizumab, $390 etanercept, and $472 alefacept IM. CONCLUSIONS: Costs of medication and efficacy rates are the primary drivers of the cost-effectiveness of treatments for moderate-to-severe psoriasis. New biologic treatments do not appear as cost-effective as oral systemic agents, phototherapy, or combined phototherapy with oral systemics.