- Aliment Pharmacol Ther 31, 735–744 Summary Background Forecasting clinical and economic outcomes in ulcerative colitis (UC) and Crohn’s disease (CD) patients is complex, but necessary. Aims To determine: the frequency of treatment-classified clinical states; the probability of transition between states; and the economic outcomes. Methods Newly diagnosed UC and CD patients, allocated into seven clinical states by medical and surgical treatments recorded in serial 3-month cycles, underwent Markov analysis. Results Over 10 years, 630 UC and 318 CD patients had 22,823 and 11 871 cycles. The most frequent clinical outcomes were medical/surgical remission (medication-free) and mild disease (on 5-aminosalicylates, antibiotics, topical corticosteroids), comprising 28% and 62% of UC cycles and 24% and 51% of CD cycles respectively. The probability of drug-response in patients receiving systemic corticosteroids/immunomodulators was 0.74 in UC, 0.66 in CD. Both diseases had similar likelihood of persistent drug-dependency or drug-refractoriness. Surgery was more probable in CD, 0.20, than UC, 0.08. In terms of economic outcomes, surgery was costlier in UC per cycle, but the outlay over 10 years was greater in CD. Drug-refractory UC and CD cases engendered high costs in the cohort. Conclusions Most patients on 5-aminosalicylates, corticosteroids and immunomodulators had favourable clinical and economic outcomes over 10 years. Drug-refractory and surgical patients exhibited greater long-term expenses.