Docetaxel is a standard treatment for advanced non-small-cell lung cancer in Ontario after first-line platinum-based therapy. In 2008, pemetrexed was approved for funding in the second-line setting based on evidence of equal efficacy as docetaxel, with an improved toxicity profile at a higher cost. Net benefit regression was used to determine the cost-effectiveness of pemetrexed compared to docetaxel in the Ontario population using data from health administrative databases. Overall survival was not significantly different in those treated with pemetrexed compared to docetaxel; however, those treated with docetaxel had higher chemotherapy-related toxicities requiring inpatient hospitalization. The incremental net benefit for pemetrexed was -8611β20,279forWTPvaluesrangingfrom0-150,000/QALY, suggesting that pemetrexed was not cost-effective at the listed drug price. The probability of cost-effectiveness was 40.9% for a 50% price reduction of pemetrexed at a WTP value of 0/QALYgained,forpricereductionsof10β500-300,000/QALY gained.M.Sc