Pegylated (PEG) interferon beta 1a has been approved by the United States Food and Drug Administration (USFDA) as an alternative to interferon beta 1a for multiple sclerosis (MS). Due to its higher price, this study aimed to evaluate the cost-effectiveness of PEG-interferon beta 1-a compared with interferon beta 1a from an Iranian payer perspective. A Markov model was designed according to health states based on Expanded Disability Status Scale (EDSS) and one-month cycles over a 10-year time horizon. Direct medical and non-medical costs were included from a payer perspective. The incremental cost-effectiveness ratio (ICER) was estimated around 11111 US dollars (USD) per quality-adjusted life-year (QALY) gained for the PEG-interferon versus interferon regimen [with currency rate of 29,000 Iranian Rial (IRR) to 1 USD in 2016]. Considering the cost-effectiveness threshold in Iran [three times of gross domestic product (GDP) per capita or 15,945 USD], PEG-interferon beta 1-a could be considered as a cost effective treatment for Iranian patients with MS.