OBJECTIVES: To assess the scientific literature for studies evaluating comparative economic value of the five disease modifying drugs (DMDs) approved in the United States (U.S.) for the management of relapsing forms of multiple sclerosis (MS). METHODS: A comprehensive search of the MEDLINE database, as well as the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) and Academy of Managed Care Pharmacy (AMCP) meeting proceedings was conducted to identify cost effectiveness (CE) analysis studies published or presented from 2004 through May 2007. Studies were critically reviewed with regard to evaluated comparators, primary endpoints, measures of relapse reduction, perspective, timeframe, and cost of therapy. RESULTS: The two identified CE analyses both utilized cost per relapse avoided as the primary endpoint, but the results varied significantly in terms of CE ratios and relative DMD rankings. The primary determinant of these variations was the methodology used to calculate relapse reduction from the data reported in randomized placebo-controlled trials. While the same clinical trials were employed by both models, the number of avoided relapses was based on absolute reduction in the case of Goldberg et al and on relative reduction in the case of Chiao et al, and the models used different assumptions with respect to timeframe, treatment adherence, monitoring costs, contractual discounts, and member co-payments. Due to the limitations inherent to the relative event reduction methodology, the model developed by Chiao et al was highly sensitive to the variation in the average relapse rate prior to treatment. CONCLUSION: The choice of methodology used to calculate therapeutic impact on relapse reduction can significantly influence the outcome of CE analyses. Considering significant heterogeneity in baseline disease severity among clinical trials in MS, use of absolute reduction in relapse rate may be more appropriate as it more accurately reflects the net clinical benefit.