OBJECTIVES: To explore the impact of step therapy policies requiring the use of a 1st-generation 5-hydroxytryptamine- receptor antagonist (5-HT3-RA) treatment before palonosetron (a 2nd generation 5-HT3-RA)  on the incremental risk of chemotherapy induced nausea and vomiting (CINV) associated with a hospital or emergency room (ER) event. METHODS: Claims data (PharMetrics) were used to identify continuously enrolled adult patients diagnosed with breast cancer (BC) and initiated on cyclophosphamide-based chemotherapy (CT) within 4 months post-diagnosis or with lung cancer (LC) and initiated on carboplatin-based CT.  Patients were stratified into those initiated and maintained on palonosetron throughout CT (Group 1) versus those treated on day 1/cycle 1 with any other 5-HT3-RA regimen (Group 2).  Risks and frequency for CINV-associated hospital or ER events identified through ICD-9-CM codes for nausea, vomiting, and/or dehydration during a 6-month follow-up period were estimated using logistic and Poisson regression models, controlling for age, gender (LC only), comorbidity, and CT days. RESULTS: Of 3606 BC and 4497 LC identified patients, 1864 BC (52%) and 1806 LC (40%) initiated palonosetron.  Groups 1 and 2 had comparable comorbidity and CT treatment days.  Compared to group 2 patients, group 1 patients had a significantly lower probability of CINV-associated hospital or ER events (3.5% vs. 5.5% in BC and 9.5% vs. 12.8% in LC), had 47.4% (BC) and 29.1% (LC) fewer hospital or ER days with CINV, and fewer 5-HT3-RA claims (mean±SD 6.2±3.3 vs. 7.9±4.1 in BC and 7.7± 4.9 vs. 10.3±6.4 in LC), all at p<0.05.  Risk for CINV was 38% (BC) and 29% (LC) lower for group 1 patients (Odds Ratio=0.62 in BC and 0.71 in LC, p<0.05). CONCLUSIONS: LC or BC patients initiated and maintained on palonosetron throughout CT were at significantly lower risk for costly CINV versus those on any other 5-HT3-RA on day 1/cycle 1 of CT treatment.