This study’s objectives were to examine and compare the cost-effectiveness of biologic and non-biologic therapies in the improvement of the health-related quality of life (HRQoL) of patients with inflammatory bowel disease (IBD) in Saudi Arabia. This retrospective cohort study analyzed data from the medical records of patients with IBD treated at a tertiary-care hospital in Riyadh, Saudi Arabia. Drug utilization costs and HRQoL scores were evaluated at baseline and after six months of treatment. Patients’ HRQoL was measured using the Arabic version of the standardized EuroQual 5 Dimensional 3 Level (EQ-5D-3L) questionnaire with a visual analog scale. Eighty-seven patients with Crohn’s disease (CD) and 69 patients with ulcerative colitis (UC) were included in the study (N = 156), and 59 (37.82%) were treated with biologics. Similar effects of both types of medications were found on the HRQoL domains of mobility, usual activities, and pain and discomfort, while biologics outperformed non-biologics on the self-care domain. The mean utilization cost of a biologic-based treatment over a six-month period was SAR 25,690.46 (USD 6,850.79) higher than that of the non-biologic treatment [95% confidence interval (CI): 24,548.55-27,465.11], and the change in the ED-5D-3L score from baseline to follow-up was 4.78 points (95% CI: 1.96-14.00). A probabilistic sensitivity analysis demonstrated that IBD therapy with biologic-based treatment is always more expensive, but also more effective in improving HRQoL 99.45% of the time. Adalimumab was found to be less cost effective than infliximab in the management of CD. Information bias cannot be ruled out, as this investigation was a retrospective cohort study with a relatively small sample that was not randomized. The results of this analysis can serve as a foundation to introduce HRQoL-based recommendations for the use of biologics in the management of IBD in Saudi Arabia.