BACKGROUND.Adding trastuzumab to adjuvant chemotherapy provides significant clinical benefit in patients with human epidermal growth factor receptor 2 (HER2)‐positive breast cancer. A cost‐effectiveness analysis was performed to assess clinical and economic implications of adding trastuzumab to adjuvant chemotherapy, based upon joint analysis of NSABP B‐31 and NCCTG N9831 trials.METHODS.A Markov model with 4 health states was used to estimate the cost utility for a 50‐year‐old woman on the basis of trial results through 4 years and estimates of long‐term recurrence and death based on a meta‐analysis of trials. From 6 years onward, rates of recurrence and death were assumed to be the same in both trastuzumab and chemotherapy‐only arms. Incremental costs were estimated for diagnostic and treatment‐related costs. Analyses were from payer and societal perspectives, and these analyses were projected to lifetime and 20‐year horizons.RESULTS.Over a lifetime, the projected cost of trastuzumab per quality‐adjusted life year (QALY; discount rate 3%) gained was $26,417 (range, $9104‐$69,340 under multiway sensitivity analysis). Discounted incremental lifetime cost was $44,923, and projected life expectancy was 3 years longer for patients who received trastuzumab (19.4 years vs 16.4 years). During a 20‐year horizon, the projected cost of adding trastuzumab to chemotherapy was $34,201 per QALY gained. Key cost‐effectiveness drivers were discount rate, trastuzumab price, and probability of metastasis. The cost‐effectiveness result was robust to sensitivity analysis.CONCLUSIONS.Trastuzumab for adjuvant treatment of early stage breast cancer was projected to be cost effective over a lifetime horizon, achieving a cost‐effectiveness ratio below that of many widely accepted oncology treatments. Cancer 2007. © 2007 American Cancer Society.