OBJECTIVES: Trastuzumab (Tras) in combination with chemotherapy is the current treatment standard in patients with early and metastatic breast cancer (BC) who are HER2 positive (HER2+). Any regimen under development will have to be compared to Tras both in pivotal clinical trials and during economic assessment. This study raises important policy questions by estimating the feasibility of demonstrating cost-effectiveness (CE) against conventional UK NICE thresholds (£ 20-30,000/QALY gained) for new regimens developed in different lines of treatment for HER2+ BC and incentives for development where rigid thresholds are applied. METHODS: Three CE models were developed using rates of disease progression, survival and efficacy data from 3 Tras clinical trials: HERA for adjuvant, M77001 for 1st-line metastatic and GBG-26 for 2nd-line metastatic BC. Isometrics curves were generated for each model whereby each point on the curve corresponded to where the progression-free & overall survival hazard ratios and increase in total costs for the new treatment versus Tras was estimated to result in an ICER of £ 30’000/QALY. Costs and utility values were based on published literature from the UK-NHS perspective. RESULTS: Assuming a 5-year duration of efficacy in early BC (PFS hazard ratio of 0.75), the model estimated that a new treatment could be considered cost-effective with medication acquisition costs 81% above Tras. In the metastatic setting (1st and 2nd-line), similar incremental improvements in efficacy, for the OS and PFS hazard ratios over 5 years, suggests that a new regimen could not have medication acquisition costs more than 6-7% above Tras. CONCLUSIONS: Given current treatment costs of the background regimen, it is unlikely that any new combination regimen will be cost-effective using UK thresholds. Results were not sensitive to the magnitude of the incremental survival benefit due to the high correlation between treatment benefit, treatment duration (until cancer progression), and overall treatment costs.