BACKGROUND: For patients with rheumatoid arthritis (RA) who discontinued initial treatment with tumor necrosis factor inhibitor (TNFi), 2 approaches are commonly used: cycling to another TNFi or switching to a drug with another mechanism of action. Currently, there is no consensus on which approach to use first. A report from the IBM MarketScan Research administrative claims database showed adalimumab (cycling strategy) and abatacept (switching strategy) were more commonly prescribed after the first TNFi discontinuation. OBJECTIVE: To evaluate the cost-utility of adalimumab versus abatacept in patients with RA whose initial TNFi therapy failed. METHODS: A probabilistic cost-utility microsimulation state-transition model was used. Our target population was commercially insured adults with RA, the time horizon was 10 years, and we used a payer perspective. Patients not responding to adalimumab or abatacept were moved to the next drug in a sequence of 3 and, finally, to conventional synthetic therapy. Incremental cost-utility ratios (2016 USD per quality-adjusted-life-year gained [QALY)] were calculated. Utilities were derived from a formula based on the Health Assessment Questionnaire Disability Index and age-adjusted comorbidity score. RESULTS: Switching to abatacept after the first TNFi showed an incremental cost of just more than $11,300 over 10 years and achieved a QALY benefit of 0.16 compared with adalimumab. The incremental cost-effectiveness ratio was $68,950 per QALY. Scenario analysis produced an incremental cost-effectiveness ratio range of $44,573 per QALY to $148,558 per QALY. Probabilistic sensitivity analysis showed that switching to abatacept after TNFi therapy failure had an 80.6% likelihood of being cost-effective at a willingness-to-pay threshold of $100,000 per QALY. CONCLUSIONS: Switching to abatacept is a cost-effective strategy for patients with RA whose discontinue initial therapy with TNFi. DISCLOSURES: Funding for this project was provided by a Rheumatology Research Foundation Investigator Award (principal investigator: Maria A. Lopez-Olivo). Karpes Matusevich's work was supported by a Doctoral Dissertation Research Award from the University of Texas, School of Public Health Office of Research. Lal reports competing interests outside of the submitted work (employed by Optum). Suarez-Almazor reports competing interests outside of the submitted work (consulting fees from Pfizer, AbbVie, Eli Lilly, Agile Therapeutics, Amag Pharmaceuticals, and Gilead). Chan, Swint, and Cantor have nothing to disclose.