OBJECTIVES: A prospective study was carried out to evaluate the cost effectiveness of chemotherapy and Best Supportive Care (BSC) in treatment of Advanced Non-Small Cell Lung Cancer (NSCLC stage IIIB and IV). METHODS: The study was done from May 2005 till March 2006. Costs of chemotherapy drugs were included and based on actual utilization. Outcomes were measured for survival, performance status (Eastern Cooperative Oncology Group (ECOG) scale), quality of life (SF-36), and utility (SF-6D) 6 cycles chemotherapy drugs were administered once every three weeks unless patients had disease progression or suffered the toxicities of chemotherapy. No discounting was applied because of short expected survival in NSCLC of less than one year. Cost effectiveness was calculated as cost per life year. RESULTS: A total of 50 patients were included in the study of which 17 (34%) received BSC while 33 (66%) had chemotherapy. The most common histological diagnosis was adenocarcinoma. The majority of chemotherapy patients completed four cycles of chemotherapy. Mean cost per patient was RM 3,493.59 ± 2770.42 for BSC and RM15,309.03 ± 8493.13 for chemotherapy. The utility index for chemotherapy and BSC were 0.551 and 0.443 respectively. Survival was 0.35 year for BSC, and 0.38 year for chemotherapy. The incremental cost effectiveness ratio (ICER) for chemotherapy versus BSC was RM217,587 per quality adjusted life year (QALY). Sensitivity analysis was done by varying the median survival to that which was reported in other studies. It showed no change in the ranking that chemotherapy produced longer median survival and better QOL than BSC.CONCLUSIONS: With small difference between BSC and chemotherapy further studies are needed to determine cost effectiveness with larger sample size and longer follow up.