OBJECTIVES: Quality of life concerns (social discomfort, embarrassment, etc.) are an important aspect for patients with moderate-to-severe plaque psoriasis. Alefacept is a new biological found effective for treatment. This cost-utility analysis was conducted to compare standard therapies to alefacept. METHODS: A two-year Markov model was developed. Response was assessed using the Psoriasis Area and Severity Index Score (PASI) 75. Patient preferences were expressed in utilities. Treatments with high utilities represented the greatest health improvement. Treatment comparators were methotrexate, cyclosporine, and phototherapy (with/without acitretin). Data, resource use, and health-state utilities were derived from literature, expert clinical opinion and a cost of illness (COI) study. Costs (Canadian dollars) were obtained from standard published lists. Separate Ontario Ministry of Health (MoH) and societal (SOC) perspectives were conducted. 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. The cost of each additional QALY (Quality-adjusted life-year), compared to methotrexate, was $97,887. For the SOC base case, each additional QALY was $96,426. Phototherapy and cyclosporine were dominated. These results used the PASI 75. However, the PASI 50 may be more clinically relevant for dermatologists and patients. Using the PASI 50, alefacept had the highest cost and highest utility of $92,043 (MoH) and $88,391 (SOC) per QALY. Psoriasis is a chronic disease, and it is important to assess cost-utilities over time. After five years, the QALY for the MoH perspective was $31,412. SOC results were similar. Using the PASI 50 response rates, the cost per QALY after three years was similar to that of the PASI 75 after five years. CONCLUSION: Alefacept compares favourably to methotrexate, the current standard of treatment, and is cost-effective in several scenarios while cyclosporine and phototherapy were dominated.