Upadacitinib is a Janus kinase (JAK) inhibitor (also referred to as a targeted synthetic disease-modifying antirheumatic drug [tsDMARD] in practice), indicated for the treatment of adults with moderately to severely active rheumatoid arthritis (RA) who have had an inadequate response or intolerance to methotrexate. The recommended dose of upadacitinib is 15 mg daily as monotherapy or combination therapy. At the sponsor-submitted price of $48.68 per 15 mg tablet, the annual treatment cost is $17,770. The sponsor submitted a cost-utility analysis that considered upadacitinib as initial treatment for moderate-to-severe RA after an inadequate response or are intolerant to either a conventional synthetic disease-modifying antirheumatic drug (csDMARD-IR population) or a biologic disease-modifying antirheumatic drug (bDMARD-IR population). The sponsor’s analysis was conducted from the perspective of a Canadian publicly funded health care payer over a five-year time horizon. Comparators included csDMARDs, bDMARDs, and other tsDMARDs. The pharmacoeconomic submission was based on a Markov model, where treatment response was evaluated using the American College of Rheumatology (ACR) response criteria. The model was composed of four main health states after the evaluation of initial treatment: 20% improvement in ACR criteria (ACR20); 50% improvement in ACR criteria (ACR50); 70% improvement in ACR criteria (ACR70); and lack of adequate treatment response (i.e., did not achieve minimum of ACR20). Patients who had an inadequate response or discontinued treatment owing to a serious adverse event (SAE) could receive a subsequent treatment and transition to any of the previously mentioned health states. If an adequate response was not achieved on subsequent treatment, patients received best supportive care (BSC), the prior therapy (bDMARD or tsDMARD) which patients achieved the best treatment effect. A sponsor-commissioned network meta-analysis (NMA) was submitted and informed the comparative ACR response at weeks 12 and 24. SAEs were incorporated on the basis of an NMA previously conducted by CADTH4 and updated to include upadacitinib and other missing comparators. Long-term discontinuation was included in the model owing to a loss of treatment effect over time. Health state utility values for ACR response and nonresponse were based on Health Assessment Questionnaire (HAQ) scores mapped to the Health Utility Index 3 (HUI-3) tool. In the sponsor’s base case, upadacitinib + csDMARD was associated with both higher total costs and quality-adjusted life-years (QALYs) when compared to csDMARD monotherapy in both target populations. In the csDMARD-IR population, the preferred option is csDMARD monotherapy if the decision-maker’s willingness to pay (WTP) is below $74,979 per QALY, infliximab 3 mg/kg + csDMARD if the decision-maker’s WTP is between $74,979 and $80,897 per QALY, etanercept 50 mg + csDMARD if the decision-maker’s WTP is between $80,897 and $107,659 per QALY, and upadacitinib + csDMARD if the decision-maker’s WTP is more than $107,659 per QALY. In the bDMARD-IR population, the preferred option is a csDMARD if the decision-maker’s WTP is below $104,193 per QALY, upadacitinib + csDMARD if the decision-maker’s WTP is between $104,193 and $303,516 per QALY, and tocilizumab 8 mg/kg + csDMARD if the decision-maker’s WTP is more than $303,516 per QALY. Other treatments were dominated or extendedly dominated.