OBJECTIVES: To evaluate the cost-effectiveness of rituximab compared to abatacept for the treatment of moderate/severe RA patients following the failure of one previous TNF-inhibitor from the perspective of the UK. METHODS: A cost-utility approach was adopted, evaluating the total direct NHS costs and QALYs. Baseline patient characteristics were based on the REFLEX phase III trial. A micro-simulation model of 10,000 RA patients estimated lifetime Health Assessment Questionnaire (HAQ) progression, QALYs and direct costs. The starting time-point of the model was upon commencement of treatment with abatacept or rituximab, following the failure of one previous TNF inhibitor. Upon treatment failure it was assumed patients would follow an identical lifetime treatment strategy consisting of: leflunomide, gold, cyclosporine and palliative care. As is currently recommended by NICE no second TNF inhibitor was assumed to be administered. Rituximab was assumed to be administered every 9 months for responding patients. ACR response rates were taken from the respective phase III RCTs and adjusted for placebo response. The initial HAQ drop by ACR category was taken from the REFLEX RCT, with long-term HAQ progression from published literature. RESULTS: Annual drug acquisition and administration costs were lower for rituximab compared to abatacept. Discounted total lifetime direct NHS costs were £46,570 and £63,055 for the rituximab and abatacept groups respectively. Rituximab generated a discounted cost-saving of £16,485 per patient due to reduced drug acquisition and administration costs. Total QALYs were estimated as 3.879 and 3.812 for rituximab and abatacept, respectively. CONCLUSION: The model predicted that rituximab dominated abatacept for RA patients who have failed one previous TNF inhibitor therapy, with higher estimated QALYs and lower NHS costs. Due to lower drug administration requirements rituximab may also generate a capacity benefit to the NHS compared with abatacept, through lower annual infusion and outpatient requirements.