OBJECTIVES: To assess the cost-effectiveness of pembrolizumab in patients with advanced melanoma, previously treated with ipilimumab, in Portugal. METHODS: A cost-effectiveness model was developed to analyze costs and consequences of treatment with pembrolizumab compared to dacarbazine in advanced melanoma patients previously treated with ipilimumab. A partitioned-survival model was parameterized using data from the randomized clinical trial KEYNOTE-002. A two-stage approach was used to adjust for crossover confounding in the comparator arm. Post-trial extrapolation was based on a combination of the long-term data of an earlier immunotherapy (ipilimumab), a meta-analysis of historical data and a melanoma patients’ registry data. Utility weights were derived from EQ-5D data in KEYNOTE-002 trial for time periods relative to death. Portuguese specific resource use in the treatment of advanced melanoma by health state was estimated by a panel of six clinical experts. Unit costs were obtained from official Portuguese sources. Deterministic and probabilistic sensitivity analyses were performed to test the robustness of results. The analysis was conducted from the perspective of the Portuguese National Health Service, assuming a life-time horizon and a discount rate of 5% for both costs and benefits. RESULTS: Pembrolizumab is estimated to increase 3.03 undiscounted life years (LY), 2.03 discounted LY or 1.59 quality adjusted life-years (QALY) per patient. It is also associated with an increase in costs of 102,155€ versus dacarbazine. The estimated incremental cost-effectiveness ratio (ICER) is 64,095€/QALY and 50,371€/LY. Deterministic sensitivity analysis allowed to verify that results are robust to the majority of assumptions. In the probabilistic sensitivity analysis, pembrolizumab is associated with a cost per QALY gained lower than to 100,000€ in 75% of the cases. CONCLUSIONS: Considering the usually accepted thresholds in oncology, the substantial unmet need and the limited treatment options, the cost-effectiveness of pembrolizumab should be acceptable in the Portuguese setting.