OBJECTIVES: Alefacept is a new biological that is effective for moderate-to-severe plaque psoriasis. This study evaluated its cost-effectiveness compared to traditional systemic treatments. METHODS: A two-year Markov model was developed. Response was measured using Psoriasis Area and Severity Index Score (PASI) 75 and length of remission. Treatment comparators were methotrexate, cyclosporine, and phototherapy (with/without acitretin). Data and resource use were derived from the literature, expert clinical opinion and a cost of illness (COI) study. Costs (Canadian dollars) were obtained from standard published sources. Analyses were conducted from the Ontario Ministry of Health (MoH) and societal (SOC) perspectives. RESULTS: In the MoH base case, expected costs were $7,790, $9,042, $10,635, $32,859 for methotrexate, phototherapy, cyclosporine and alefacept, respectively. Response-days associated with each treatment were 175, 78, 175 and 247 days respectively. Phototherapy and cyclosporine were both dominated. The incremental cost-effectiveness ratio (ICER) was $349/response-day ($127,473/response-year) for alefacept over methotrexate. In the SOC base case analysis, the expected costs were $11,871, $13,416, $15,010 and $36,510 respectively. Phototherapy and cyclosporine were dominated. The ICER was $343/response-day ($125,281/response-year) for alefacept over methotrexate. These analyses used PASI 75 scores to measure clinical outcomes, however, the PASI 50 may be more clinically meaningful for dermatologists and patients. In the PASI 50 sensitivity analysis from the MoH perspective, the ICER was $287/response-day ($104,827/response-year) against methotrexate; results from the SOC perspective were similar. In a sensitivity analysis, savings also increased over time. Results from PASI 50 over three years were similar to those for PASI 75 after five years. CONCLUSION: Alefacept offers incremental benefits compared to methotrexate, and displays cost-effectiveness in selected scenarios while cyclosporine and phototherapy were dominated in all scenarios.