Objective: Erlotinib, a novel targeted anticancer therapy, improves survival and quality of life (QoL) in patients with advanced NSCLC after chemotherapy failure. The incremental cost effectiveness ratio (ICER) of erlotinib based on a randomized placebo-controlled trial, (NCIC CTG BR.21) is $95,869 (2007 CDN), per life-year gained (LYG). Here we perform a cost utility analysis (CUA) of erlotinib in patients with advanced NSCLC, and explore novel methodology to utilize QoL data collected using the EORTC QLQC30 tool. Methods: Previously published resource utilization and QoL data from patients recruited as part of the NCIC CTG BR.21 clinical trial were used. Utility weights were derived from the prospective collection of the EQ5D in a separate cohort of advanced NSCLC patients receiving erlotinib or supportive care alone. QoL was also prospectively collected using the EORTC QLQC30. Correlation between utility (EQ5D) and QoL in the cohort is being explored, and will be applied to published QoL data from the NCIC CTG BR.21 trial data. Results: Prospective data from the EQ5D and EORTC QLQC30 were obtained from 64 patients with NSCLC, 31 receiving erlotinib and 33 supportive care. The mean utility derived for those treated with erlotinib was 0.772, and for those not receiving erlotinib was 0.754. The mean incremental cost of erlotinib over supportive care was previously derived as $12,303, mean survival 0.13 years, and quality-adjusted survival improvement with erlotinib treatment in advanced NSCLC based on published data from the NCIC CTG BR.21 trial was estimated at 0.11 QALY, with an ICER estimated at approximately $110,321 per QALY Conclusion: The cost utility of erlotinib in patients with advanced NSCLC is estimated at $110,321 per QALY (CDN$ 2007); a parallel investigation to evaluate methodology to utilize EORTC QLQ30 QoL data is underway.