OBJECTIVES Calculate life expectancy and quality of life of gefitinib versus docetaxel in the treatment of non-small-cell lung cancer in a Mexican public institution (ISSSTE). METHODS A Discrete Event Simulation model was designed to emulate probabilities of having one or more adverse events at the same time when in treatment for non-small-cell lung cancer (NSCLC) using gefitinib or docetaxel. Probability distributions for adverse events and life expectancy were obtained from the INTEREST study. We used a docetaxel chemotherapy cost-study at ISSSTE and for gefitinib we used the drug's institutional price. Health state utility values for calculating QALYs (Quality Adjusted Life Years) were derived from a recently published study done with UK patients. A 3% annual discount rate was applied on a monthly basis to all costs. Finally, a probabilistic sensitivity analysis was made varying the cost of chemotherapy. The model was run 25 times with 500 patients in each arm. Results are presented in US dollars with an exchange rate of 13.5 MXN pesos for 1 US dollar. RESULTS There was no clinical difference in life expectancy between gefitinib (10.25 months) and docetaxel (10.14 months). Average QALY for gefitinib cohort was 0.487 (95% CI, 0.437 – 0.537) and for chemotherapy cohort was 0.438 (95% CI, 0.388 – 0.488). The average cost per patient treated with gefitinib was $12,103 (95% CI, $11,916 – $12,290) and with docetaxel was $20,076 (95% CI, $19,866 – $20,286). The acceptability curve shows a 100% dominace of gefitinib over docetaxel, after a chemotherapy price of $1,333. CONCLUSIONS Gefitinib is an alternative therapy for second line treatment of NSCLC that dominates docetaxel chemotherapy, in terms of quality of life related to reduced presence of adverse events, at a lesser cost to the institution.