OBJECTIVES: Paclitaxel albumin (P-A, Abraxane®) is nanoparticle albumin-bound paclitaxel formulated without use of irritant solvents that are responsible for  many of the hypersensitivity and dose limiting adverse events (AEs). Previous research has compared its cost-effectiveness to solvent-based paclitaxel (S-P) and docetaxel (DOC) in a cohort of patients with mixed treatment history. This study examined P-A’s cost-effectiveness for pretreated MBC, the population specified in the European license. METHODS: A Markov model with progression-free, progressed and mortality states was developed to estimate costs and outcomes over 5 years from a UK NHS perspective. Included from published sources were the costs at 2009 prices of drugs, administration, AEs, and supportive care. Published utility weights were applied to health states to estimate the impact of response, disease progression and AEs on quality-adjusted life-years (QALYs). Clinical data for pretreated patients receiving P-A 260mg/m2 3-weekly (q3w) and S-P 175mg/m2 q3w were from Gradishar (2005). Using Bucher’s methods, an indirect comparison with Jones (2005) provided estimates of clinical parameters for DOC 100mg/m2 q3w. Weibull extrapolations of survival data generated transition probabilities. RESULTS: Compared to S-P, P-A achieved an extra 0.164 QALYs, 0.263 life-years and incurred additional costs of £4,137 per patient treated. This translated to an incremental cost-effectiveness ratio of £25,209/QALY. P-A saved £697 when compared to DOC, with a marginal QALY gain of 0.0037 and no life-expectancy divergence. Probabilistic sensitivity analysis versus DOC indicated a 61% likelihood of P-A satisfying a willingness-to-pay threshold of £30,000/QALY. Both comparisons were sensitive to drug costs and survival estimates. Accounting for potential drug wastage did not influence interpretation of results from either comparison.  CONCLUSIONS: The model found that P-A gave better outcomes than S-P or DOC and was cost-effective compared to both interventions. This depended upon greater efficacy than S-P and a more favourable safety profile than DOC.