As part of the National Institute for Health and Clinical Excellence (NICE) single technology appraisal (STA) process, the manufacturer of apremilast was invited to submit evidence for its clinical and cost effectiveness for the treatment of active psoriatic arthritis (PsA) for whom disease-modifying anti-rheumatic drugs (DMARDs) have been inadequately effective, not tolerated or contraindicated. The Centre for Reviews and Dissemination and Centre for Health Economics at the University of York were commissioned to act as the independent Evidence Review Group (ERG). This paper provides a description of the ERG review of the company's submission, the ERG report and submission and summarises the NICE Appraisal Committee's subsequent guidance (December 2015). In the company's initial submission, the base-case analysis resulted in an incremental cost-effectiveness ratio (ICER) of £14,683 per quality-adjusted life-year (QALY) gained for the sequence including apremilast (positioned before tumour necrosis factor [TNF]-α inhibitors) versus a comparator sequence without apremilast. However, the ERG considered that the base-case sequence proposed by the company represented a limited set of potentially relevant treatment sequences and positions for apremilast. The company's base-case results were therefore not a sufficient basis to inform the most efficient use and position of apremilast. The exploratory ERG analyses indicated that apremilast is more effective (i.e. produces higher health gains) when positioned after TNF-α inhibitor therapies. Furthermore, assumptions made regarding a potential beneficial effect of apremilast on long-term Health Assessment Questionnaire (HAQ) progression, which cannot be substantiated, have a very significant impact on results. The NICE Appraisal Committee (AC), when taking into account their preferred assumptions for HAQ progression for patients on treatment with apremilast, placebo response and monitoring costs for apremilast, concluded that the addition of apremilast resulted in cost savings but also a QALY loss. These cost savings were not high enough to compensate for the clinical effectiveness that would be lost. The AC thus decided that apremilast alone or in combination with DMARD therapy is not recommended for treating adults with active PsA that has not responded to prior DMARD therapy, or where such therapy is not tolerated.