As part of its Single Technology Appraisal process, the National Institute for Health and Care Excellence (NICE) invited the manufacturer (Pfizer) of tofacitinib (TOF; Xeljanz®) to submit evidence of the drug’s clinical and cost-effectiveness in the treatment of rheumatoid arthritis (RA) after the failure of conventional disease-modifying antirheumatic drugs (cDMARDs). The School of Health and Related Research Technology Appraisal Group at the University of Sheffield was commissioned to act as the independent Evidence Review Group (ERG). The ERG produced a detailed review of the evidence for the clinical and cost-effectiveness of the technology, based upon the company’s submission to NICE. The clinical effectiveness evidence in the company’s submission for TOF is based predominantly on four randomised controlled trials (RCTs) comparing the efficacy of TOF against placebo. Three RCTs investigated TOF in combination with methotrexate (MTX), and one RCT investigated TOF monotherapy. All four RCTs compared TOF with placebo plus cDMARDs, one RCT also included adalimumab as a comparator. The study population in the four RCTs comprised patients who were MTX inadequate responders or cDMARD inadequate responders (cDMARD-IR). The company performed network meta-analyses (NMA) to assess the relative efficacy of TOF compared with biologic DMARDs (bDMARDs) in patients who were cDMARD-IR or bDMARD-IR with moderate-to-severe RA for European League Against Rheumatism (EULAR) response and change in the Health Assessment Questionnaire Disability Index at 6 months. The company’s NMA concluded that TOF had comparable efficacy to bDMARDs currently recommended by NICE. The company submitted a de novo model that assessed the cost-effectiveness of TOF versus its comparators in six different populations: (1) cDMARD-IR with severe RA; (2) cDMARD-IR with severe RA for whom MTX is contraindicated or not tolerated; (3) bDMARD-IR; (4) bDMARD-IR for whom rituximab (RTX) is contraindicated or not tolerated; (5) bDMARD-IR for whom MTX is contraindicated or not tolerated; and, (6) cDMARD-IR with moderate RA. According to the company’s economic analyses, in cDMARD-IR with severe RA, TOF plus MTX dominates or extendedly dominates most comparators, whilst TOF monotherapy is slightly less effective and less expensive than its comparators, with the cost saved per quality-adjusted life year (QALY) lost always higher than £50,000. In bDMARD-IR with severe RA, RTX plus MTX dominated TOF plus MTX, but in patients for whom RTX was not an option, TOF plus MTX dominated all comparators included in the analysis (four comparators recommended by NICE were not included). In cDMARD-IR with moderate RA, the cost per QALY for TOF in combination with MTX or as monotherapy compared with a sequence of cDMARDs was estimated to be greater than £50,000/QALY. The ERG identified a number of limitations in the company’s analyses, including use of a fixed-effects model in the NMA and the use of treatment sequences in the cost-effectiveness model which did not reflect NICE recommendations. These limitations were addressed partly by the company during the clarification round and partly by the ERG. The exploratory analyses undertaken by the ERG resulted in similar conclusions: (1) TOF plus MTX was dominated by RTX plus MTX; (2) TOF in combination with MTX or as monotherapy dominates or extendedly dominates some of its comparators in cDMARD-IR and bDMARD-IR with severe RA for whom RTX plus MTX was not an option; and (3) in cDMARD-IR with moderate RA, the cost per QALY of TOF in combination with MTX or as a monotherapy versus cDMARDs was in excess of £47,000. The NICE Appraisal Committee consequently recommended TOF plus MTX as an option for patients whose disease has responded inadequately to intensive therapy with a combination of cDMARDs only if (1) disease is severe [a Disease Activity Score (DAS28) of more than 5.1] and (2) the company provides TOF with the discount agreed in the Patient Access Scheme (PAS). TOF plus MTX is also recommended as an option for adults whose disease has responded inadequately to, or who cannot have, other DMARDs, including at least one bDMARD, only if (1) disease is severe, (2) they cannot have RTX, and (3) the company provides TOF with the discount agreed in the PAS. For patients who are intolerant of MTX, or where MTX is contraindicated, TOF monotherapy is recommended where TOF plus MTX would be recommended.