OBJECTIVES: As part of a program using economic evaluation to guide discovery efforts in personalized medicine, we evaluated the potential clinical and economic impact of biomarker-directed management of patients with single pulmonary nodules (SPN) versus current practice in Luxembourg. METHODS: We developed a decision analytic model from the payer perspective using data from Luxembourg and neighboring countries. Decision pathways were based on input from clinical experts and health services researchers.  The model follows patients from SPN identification to death comparing standard care (bronchoscopy, CT scans, and FDG PET scans) with biomarker-directed evaluation.  Endpoints included lung cancers detected, false positive and negative tests, life expectancy, and related medical care costs.  Threshold analyses were performed to assess levels of biomarker performance that would be cost-effective. RESULTS: Compared to standard care, biomarker-based management produced an average survival benefit of 0.015 years and average cost savings of €1430, dominating standard care.  The improved life expectancy was primarily the result of identifying and treating patients with malignant tumors earlier.  The cost savings were primarily driven by avoiding costly diagnostic procedures (e.g. FDG PET).   In sensitivity analysis, test characteristics for bronchoscopy and FDG PET had the largest impact on model results.  At a sensitivity/specificity of 0.83/0.83, the biomarker-based strategy was no longer more effective than standard care.  There was no simultaneous decrease in sensitivity/specificity that made the biomarker based strategy more costly than standard care. Finally, the cost of the biomarker-based test could increase to €1530 with the strategy remaining less costly than standard care. CONCLUSIONS: Biomarkers have the potential to improve the management of patients diagnosed with SPN’s in Luxembourg.  At a sensitivity/specificity of 0.95/0.95, biomarker-directed management could improve outcomes and reduce costs for the Luxembourg health system.  Biomarker development efforts at this and other strategic points along the lung cancer treatment pathway are underway.