OBJECTIVES: Clinical trials have shown a statistically significant disease-free survival benefit of oxaliplatin or irinotecan based combination therapy for stage IV colon cancer. However, less is known regarding the comparative effectiveness and cost-effectiveness of these agents among elderly patients. Whether the additional benefit of these two agents is worth the additional cost for elderly Medicare recipients is particularly policy relevant.  METHODS: A cost-effectiveness analysis of oxaliplatin or irinotecan based combination therapy versus 5-fluorouracil/leucovorin (5FU/LV) in patients aged 66 or older with stage IV colon cancer was performed from a US Medicare health care payer perspective. Survival and direct medical costs were estimated using patient-level data from the 1997-2007 surveillance, epidemiology, and end results (SEER)-Medicare datasets for patients diagnosed through 2005. Incremental cost-effectiveness ratio (ICER) was calculated and expressed as cost per life-year gained.  RESULTS: Patients were categorized into 5FU/LV (n=2,834), oxaliplatin based (n=621), and irinotecan based (n=945) subgroups, based on the regimen they received. The median improvement in overall survival with 5FU/LV, irinotecan or oxaliplatin based combination therapy was 1.25, 1.34, and 1.72 life-years, respectively. The incremental cost with irinotecan or oxaliplatin based combination therapy compared with 5FU/LV was $205,837 and $93,651, respectively. When comparing to irinotecan based combination therapy, the incremental cost-effectiveness ratio of oxaliplatin based combination therapy was $67,637 per life-year gained. CONCLUSIONS: This analysis suggests that oxaliplatin or irinotecan based combination therapy improves overall survival but also substantially increases direct medical costs compared with 5FU/LV when used in elderly US patients with stage IV colon cancer. Oxaliplatin-based regimens are more cost-effective than irinotecan based regimens.