OBJECTIVES: In South Africa, females with over expressed human epidermal growth factor receptor 2 (HER2) positive metastatic breast cancer are often treated with trastuzumab. Lapatinib is an oral dual tyrosine kinase inhibitor and is indicated, in combination with capecitabine, for the treatment of patients with advanced or metastatic breast cancer. We estimate the cost-effectiveness of the use of lapatinib in the private health care sector from a payer perspective. METHODS: A cost-utility model was modified for appropriate application in the South African private health care sector setting. We compared treatment with capcitabine mono-therapy with several trastuzumab combination therapies as well as lapatinib in combination with capcitabine. Efficacy data was taken from the EGF100151 trial. The efficacy of trastuzumab containing regiment was assumed to be the same as that of a lapatanib containing regiment due to a lack of data. Sixteen key opinion leader oncologists were consulted through a structured questionnaire.   Resource consumption costs were estimated from large private medical scheme claims data. A multistate model was used and run for the full lifetime of a patient.  RESULTS: Lapatinib in combination with capecitabine dominates the combination of other treatment options investigated in this study.  The incremental cost in this comparison equates to -US$3,619 with a gain of 0.032 quality adjusted life-years. The results were robust under sensitivity analyses. CONCLUSIONS: The use of lapatinib dominates other treatments. The majority (84%) of patients in the comparator arm use trastuzumab, and based on the fact that the AE costs are relatively low, the results are mainly driven by the difference in the cost of trastuzumab and lapatinib. The validity of the assumption of equal efficacy of trastuzumab and lapatinib is therefore key when interpreting the results and needs to be verified with additional data.