Multiple sclerosis (MS) is one of the most common causes of neurological disability in young and middle-aged adults. The full economic cost of MS is substantial given that MS patients experience a major perturbation in their daily activities and the disease affects mainly young people who are obliged to restrict their levels of economic activity, either temporarily or permanently. A positive relationship exists between the direct and indirect costs of MS and its severity. Cost variations between countries exist because of differences in the costs of inpatient care, the number of ambulatory visits, drug usage and the extent and type of informal care.The development and availability of new agents has been accompanied by an increased optimism that treatment regimens for MS would be more effective. However, doubts have been expressed about the effectiveness of these treatments, which have compounded the problems associated with estimating the relative cost effectiveness of such interventions.In addition, variations in the utility scores associated with disease categories, the impact of relapses and the resulting utility losses, plus the speed of disease progression have all contributed to the difficulty of estimating the quality-adjusted life year (QALY) losses for a patient experiencing MS. Differences between studies with respect to the costs associated with each disability level, the timescale of the disease and the period over which costs and QALYs are to be measured, and the perspective employed in relation to costing have also resulted in a wide range of estimates being produced for the cost effectiveness of interferons and glatiramer acetate in the management of MS. These range from situations of cost savings, to over $US1.6 million (euro1.85 million) per QALY gained. Recent cost-effectiveness studies have benefited from more relevant and up-to-date data relating to disease progression and have generally produced more favourable cost-effectiveness ratios. However, the lack of homogeneity in the design of the studies partly accounts for the extent of variation in the estimates of cost effectiveness, and the difficulty of arriving at a consensus.The UK Department of Health has introduced a scheme that provides disease-modifying agents in the National Health Service for those patients with clinically active relapsing disease. Patients are monitored annually and payments to manufacturers are dependent on outcomes achieved. This initiative, although not without its detractors, will hopefully enhance the quantity and quality of evidence on the impact of drugs on disease progression and address some of the current difficulties with estimating the relative cost effectiveness of disease-modifying drugs in the treatment of patients with MS.