Background: The RACAT (Rheumatoid Arthritis Comparison of Active Therapies) trial found triple therapy to be noninferior to etanercept-methotrexate in patients with active rheumatoid arthritis (RA). Objective: To determine the cost-effectiveness of etanercept-methotrexate versus triple therapy as a first-line strategy. Design: A within-trial analysis based on the 353 participants in the RACAT trial and a lifetime analysis that extrapolated costs and outcomes by using a decision analytic cohort model. Data Sources: The RACAT trial and sources from the literature. Target Population: Patients with active RA despite at least 12 weeks of methotrexate therapy. Time Horizon: 24 weeks and lifetime. Perspective: Societal and Medicare. Intervention: Etanercept-methotrexate first versus triple therapy first. Outcome Measures: Incremental costs, quality-adjusted lifeyears (QALYs), and incremental cost-effectiveness ratios (ICERs). Results of Base-Case Analysis: The within-trial analysis found that etanercept-methotrexate as first-line therapy provided marginally more QALYs but accumulated substantially higher drug costs. Differences in other costs between strategies were negligible. The ICERs for first-line etanercept-methotrexate and triple therapy were $2.7 million per QALY and $0.98 million per QALY over 24 and 48 weeks, respectively. The lifetime analysis suggested that first-line etanercept-methotrexate would result in 0.15 additional lifetime QALY, but this gain would cost an incremental $77 290, leading to an ICER of $521 520 per QALY per patient. Results of Sensitivity Analysis: Considering a long-term perspective, an initial strategy of etanercept-methotrexate and biologics with similar cost and efficacy is unlikely to be cost-effective compared with using triple therapy first, even under optimistic assumptions. Limitation: Data on the long-term benefit of triple therapy are uncertain. Conclusion: Initiating biologic therapy without trying triple therapy first increases costs while providing minimal incremental benefit. Primary Funding Source: The Cooperative Studies Program, Department of Veterans Affairs Office of Research and Development, Canadian Institutes for Health Research, and an interagency agreement with the National Institutes of Health-American Recovery and Reinvestment Act.