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Introduction: Spinal muscular atrophy (SMA) is an inherited neuromuscular disorder and regarded as one of the most frequent genetic causes of infant mortality. The aim of this study is to develop a cost-effectiveness analysis of AVXS-101 (Onasemnogene Abeparvovec/Zolgensma®) and nusinersen (Spinraza®) for SMA to inform decision-making on reimbursement policies in Australia. Methods: A Markov model was developed with five health states to evaluate the costs and effects for patients with SMA Type I from a healthcare system perspective over a time-horizon of 100 years. The model parameters were based on clinical trials, parametric distributions, published literature, and Australian registries. One-way and probabilistic sensitivity analysis were performed to appraise the uncertainties of the parameters in the model. A threshold analysis was conducted to estimate the cost of AVXS-101 of being cost-effective. Results: The incremental cost-effectiveness ratio (ICER) of AVXS-101 was $1,808,471 per quality-adjusted life year (QALY) and that of nusinersen was $2,772,798 per QALY, compared to standard of care, respectively. The ICER of AVXS-101 was $1,238,288 per QALY compared to nusinersen. The key drivers influencing on ICERs were costs of using treatments and utility values of sitting and walking independently. Conclusion: Both nusinersen and AVXS-101 resulted in health benefits, but they were not cost-effective with a commonly used willingness-to-pay (WTP) threshold of $50,000 per QALY. Developing high-quality clinical data and exploring appropriate WTP thresholds are critical for decision-making on reimbursement policies in the treatment of rare diseases. [ABSTRACT FROM AUTHOR]