OBJECTIVES To quantify direct medical costs (inpatient, outpatient, pharmacy) of initial therapy with FDA-approved renal cell carcinoma (RCC) oral therapies (sorafenib, sunitinib) in treatment of RCC patients who are privately insured and under 65 years. METHODS Using data from MarketScan MedStat, a database covering all US census regions and included ≥18 million lives, we conducted a retrospective claims-based study. Between January 2002 and December 2007, patients with ≥2 RCC claims (ICD-9 189.0, 198.0), continuous health care coverage, and >180 days of coverage before RCC diagnosis and who received sorafenib or sunitinib were eligible for inclusion. Observation period lasted from first drug-dispensing date until ≤12 months or first of therapy-switch, nephrectomy, disenrollment, or study end (December 31, 2007). Univariate and multivariate Tobit analyses were conducted. Variables included age, sex, region, plan type, comorbidities, prior treatments/procedures, and time since RCC diagnosis. RESULTS Of 10,462 RCC patients identified, 144 received sorafenib and 220 received sunitinib as initial therapy. In the 180 days before RCC diagnosis, total direct medical costs, baseline demographics, and comorbidities were not statistically significantly different between groups. Univariate total monthly medical costs for the sunitinib group were statistically significantly greater than for the sorafenib group ($9476 vs. $7426, respectively; P<0.01), representing a yearly cost difference for sunitinib of $24,588 more than sorafenib. Univariate incremental monthly inpatient and pharmacy costs for sunitinib were $861 (P=0.01) and $889 (P<0.01), respectively, and outpatient therapy was $300 (P=0.14) more than sorafenib. Multivariate analyses for incremental total monthly inpatient and pharmacy costs for sunitinib also remained significant at $1399, $1259, and $689, respectively (P<0.01). CONCLUSIONS This analysis showed statistically significant cost differences, including lower total monthly medical, inpatient and pharmacy costs, associated with sorafenib compared with sunitinib when used as initial therapy in RCC patients under 65 years. Reasons for these differences require further exploration.