OBJECTIVES: Validated companion diagnostic assays permit collection of critical clinical data that leads to actionable treatment decisions and better patient outcomes.  The cobas BRAF test is an FDA-approved companion diagnostic that identifies V600 mutation positive malignant melanoma to determine patient eligibility for treatment with vemurafenib.  Sanger sequencing is also a validated, lab developed test that provides similar information for the gene encoding the BRAF protein.  Test performance differences can have an impact on patient outcomes and overall cost of testing and treatment.  METHODS: Based on assay performance data for both tests, generated during the phase 2 BRIM-2 (N=132), BRIM-2/3 (N=433) and phase 3 BRIM-3 (N=449) studies, an integrated drug-diagnostic budget impact model was developed from a third-party payer perspective assuming a 6-month treatment period.  Cost estimates were based on testing 100% unresectable stage III-IV melanomas assuming 50% incidence of BRAF mutations.  Diagnostic costs were based on reimbursement for average code-stacks across various lab and therapeutic costs for vemurafenib (and ipilimumab) were inclusive of administrative and adverse event costs.  Sensitivity models were run to estimate costs across a wide range of values for the various model parameters.  RESULTS: Overall, the sum of invalid tests, false positive and false negative results across all 3 studies was 14.6% (148/1014) for Sanger sequencing and 0.6% (6/1014) for the cobas BRAF test.  Use of the cobas BRAF test versus Sanger sequencing resulted in total saving of $14.2 million or $1,479.17 per patient in the BRIM-3 study and $21.9 million or $2,281.25 per patient in the BRIM2/3 dataset.  Savings were primarily a result of avoiding unnecessary or inappropriate drug therapy and diagnostic costs accounted for a small fraction (0.13-0.29%) of total expenditures.  CONCLUSIONS: Use of the clinically validated and more accurate cobas BRAF test resulted in significant cost savings relative to Sanger sequencing for BRAF mutations.