OBJECTIVES: Gastric cancer is the fifth most prevalent cancer and the fifth cause of cancer-related mortality in Taiwan. The objective of this study was to access the cost-effectiveness of capecitabine plus cisplatin (XP) vs. intravenous 5-fluorouracil plus cisplatin (FP) for the treatment of advanced and metastatic gastric cancer (AGC) in Taiwan, from a payer's (Bureau of National Health Insurance [BNHI]) perspective. METHODS: A cost-minimization analysis (CMA) was conducted by applying clinical outcomes and medical resource utilization (MRU) derived from the phase III ML17032 study. Direct medical costs associated with trial-based MRU were based on Taiwan's National Health Insurance fee schedule for 2007. Costs associated with intravenous chemotherapy administration and adverse event (AE) management were estimated by an expert panel survey conducted among 12 oncologists. One-way sensitivity analyses were performed on key model parameters by varying the input values by ± 20%. RESULTS: A trend toward superior progression-free survival was observed in the XP arm (median 5.6 months for XP vs. 5.0 for FP). Patients in the XP arm received 5.2 cycles of therapy vs. 4.6 cycles of FP. Compared to FP, administration of XP required fewer consults per patient (5.2 for XP vs. 22.8 for FP). Chemotherapy drug cost was higher (USD $1,712) in the XP arm; however, these cost increments were offset by differences of chemotherapy administration costs (USD $4,376) between two arms. AE profiles were similar and the cost associated with grade 3/4 AE management were slightly lower (USD $30) in the XP arm. Overall, XP was associated with a cost saving of USD$2,691 (NTD$87,351). XP remained cost-saving under one-way sensitivity analyses. CONCLUSIONS: From the Taiwan BNHI perspective, this CMA demonstrates that replacing FP by XP for the treatment of AGC would not only save direct medical costs but also improve health outcomes in Taiwan.