Objective: Compare two therapy regimens, Lapatinib plus Capecitabine to Capecitabine alone, for advanced or Metastatic HER2-positive breast cancer patients who were pretreated with regimens that included an anthracycline, a taxane, and trastuzumab. Methods: A Markov model, written in Microsoft Excel®, is used to simulate progression of breast cancer in a hypothetical cohort of breast cancer patients in a societal perspective. The model consists of three health states: Clinical Benefits (Response or Stable Disease), Progressive Disease, and Death. Transitions between health states were assumed to occur once a month. Life expectancy, costs and QALYs are discounted monthly by 0.0025% (3% annually). All costs are adjusted to 2007 dollars. Results: Lapatinib plus Capecitabine increases discounted life expectancy and quality-adjusted life expectancy by 0.43 years and 0.54 years, respectively, when compared to Capecitabine alone. This result yields an incremental cost-effectiveness ratio (ICER) of USD$135,701.69 per QALY (upper 95% CI USD$230,864.99 per QALY), which may be cost effective, based on the threshold of USD$150,000/QALY. If the value of Lapatinib price increases at least 13.4%, the combination therapy is no longer cost-effective. The same outcome is observed if we increase the transition probability from the Clinical Benefits state to the Progressive Disease state in the combination therapy by 12.5% or if we decrease it by 19.3% in monotherapy. Additionally, by using the 5th percentile of the utility for Clinical Benefits and the 95th percentile of the utility for Progressive Disease, the ICER is US$D281,091.34/QALY and USD$201,232.58/QALY, respectively. Conclusion: Based on a threshold of USD$150,000/QALYs, the treatment with Lapatinib plus Capecitabine is cost-effective in the base case for metastatic breast cancer patients. Although the mean of ICER is USD$135,701.69, the upper limit 95% CI suggests that Lapatinib plus Capecitabine may be cost-ineffective. In addition, for reasonable changes in key parameters, the combination therapy becomes cost-ineffective.