OBJECTIVES: The objective of this economic evaluation was to determine the cost-effectiveness of cabozantinib versus everolimus in the treatment of advanced renal cell carcinoma using a United States payer perspective. METHODS: A partitioned survival model was developed that contained three health states: 1) Stable (progression-free), 2) Progressed, and 3) Death. Data for the model with regard to survival, costs, and utilities was gathered via a variety of sources, including the METEOR trial, national databases, and existing literature. Methods described by Hoyle and Henley et al. were used to derive parametric survival functions from the available Kaplan-Meier curves. Model outcomes included total life-years, quality-adjusted life-years (QALYs), total costs, cost per life-year gained and cost per QALY gained. Sensitivity analyses were performed to evalute the impact of parameter uncertainty on model results. RESULTS: Individuals treated with cabozantinib gained on average an additional 0.44 LYs compared to those treated with everolimus. In addition, individuals treated with cabozantinib gained on average an additional 0.32 QALYs compared to those treated with everolimus. However, treatment with cabozantinib was associated with a greater cost of $49,811 compared to treatment with everolimus. This resulted in incremental cost effectiveness ratios of $112,318/LY and $154,194/QALY. Model results were most sensitive to cabozantinib cost, everolimus cost, utility for the stable (progression-free) state, utility for the progressed state, and cost associated with the progressed state. CONCLUSIONS: These results suggest that cabozantinib may not represent a cost-effective option in the second-line treatment of advanced renal cell carcinoma compared to the standard-of-care option everolimus based on common willingness-to-pay thresholds.