OBJECTIVES: Non-small cell lung cancer (NSCLC) accounts for 27% of all cancer deaths, making it the leading cause of cancer mortality. Treatments for advanced NSCLC have been a constant challenge; recent studies have indicated immunotherapy as a promising therapeutic option for second-line therapy after platinum-based chemotherapy. We assessed the cost-effectiveness of Nivolumab compared to Docetaxel in patients with advanced NSCLC. METHODS: A Markov-Decision tree model was developed to estimate costs and benefits for patients with advanced NSCLC. The model consisted of two states: progression-free survival and death. Transition probabilities were estimated using results from a phase 3 clinical trial study comparing Nivolumab and Docetaxel. Published data and expert opinion were used as sources for costs adverse events. The time horizon was set at 2 years. We estimated the incremental cost-effectiveness ratio (ICER) of Nivolumab versus Docetaxel per additional month of progression-free survival. RESULTS: We estimated the initial cost of Nivolumab at $32,732 per cycle (3 months) based on a dose of 3 mg per kilogram of body weight every 2 weeks. Similarly, the initial cost of Docetaxel per cycle was $6,165 based on a dose of 75mg per square meter of body-surface area every 3 weeks. The overall cost of Nivolumab for the entire term was estimated at $130,308.34, compared to Docetaxel at $16,756.86. Adverse events in the Nivolumab arm accounted for $12,510.92 for the entire term, versus $48,128.46 in the Docetaxel arm. The clinical trial study showed median progression-free survival of 3.5 months for Nivolumab compared to 2.8 months for Docetaxel. We estimated the ICER at $159,048.86 per additional month of progression-free survival in the Nivolumab arm. CONCLUSIONS: Nivolumab showed superior progression-free survival compared to Docetaxel but at a substantial cost. Future work to include sensitivity analyses and determine payer willingness to pay will be conducted.