Third-party payors and national health systems require evidence that new medications for rheumatoid arthritis are cost effective. To determine cost effectiveness, one must consider the cost of a given therapy versus the long-term cost of the disease, with and without therapy. The direct and indirect costs of rheumatoid arthritis over the course of the disease, including the considerable costs related to hospitalization and disability, have been quantified. Resource utilization and treatment costs are high for patients with rheumatoid arthritis, and there is a strong link between functional disability and direct cost of care.Traditional disease-modifying antirheumatic drugs (DMARDs) [such as methotrexate and gold] have limited long-term effects in improving lives and avoiding costs for patients with rheumatoid arthritis. Tumor necrosis factor (TNF) antagonists, the newest class of rheumatoid arthritis drug therapies, significantly improve patient outcomes, including reducing the signs and symptoms of rheumatoid arthritis, improving physical function and health-related quality of life, and inhibiting radiographic damage. Failing to treat rheumatoid arthritis effectively is very costly; effective treatment includes early, aggressive therapy. As a result, the National Health Service in the UK, other societal decision-makers, and third-party payors have recommended the use of TNF antagonists, in many instances, for the treatment of rheumatoid arthritis.The TNF antagonists – infliximab, etanercept, and the most recently approved, adalimumab – address the limitations of traditional DMARDs, thus setting a new therapeutic standard for rheumatoid arthritis. Data from three key studies (Anti-TNF Research Program of the Monoclonal Antibody Adalimumab in Rheumatoid Arthritis, DE019 and DE011) indicate that adalimumab provides a rapid, sustainable, predictable, and significantly greater reduction in the signs and symptoms of rheumatoid arthritis than traditional DMARDs. Adalimumab yields significantly less structural joint damage as measured by the total Sharp scores and scores on its two major components: joint erosions and joint space narrowing. It also improves physical function (as measured by the Health Assessment Questionnaire Disability Index) and health utility (as measured by the Health Utilities Index Mark 3).In conclusion, rheumatoid arthritis and other musculoskeletal diseases are costly, but an upfront investment in highly effective therapies may provide long-term cost savings compared with traditional therapies. The immediate, out-of-pocket costs of TNF antagonists are greater than traditional DMARDs, but with the potential to significantly improve response rates, inhibit structural joint damage, and improve disability and health utility, TNF antagonists have the potential to be more cost effective over the long run. TNF antagonists can be valuable for patients in need and therefore appropriate for reimbursement by national health systems and third-party payors.