OBJECTIVES: Oncotype DX is a molecular diagnostic assay that measures quantitative expression of 21 genes within a breast tumour sample.  The result is reported as a recurrence score (RS) that correlates with the risk of 10-year recurrence.  The potential cost impact on chemotherapy treatment and an exploratory cost utility analysis were undertaken from the Australian health care system perspective. METHODS: Input on the proportion of patients treated with chemotherapy and treatment regimens were obtained from an expert panel and a supplementary survey of Australian clinicians (oncologists and surgeons, n=12).  Data on the proportion of patients who would forgo chemotherapy based on knowledge of the RS and the incidence and cost of adverse events were obtained from published literature. RESULTS: The clinician input indicated that 33% of node negative and 84% of node positive women receive adjuvant chemotherapy on average.  The most common treatments for node-negative patients were AC (anthracycline and cyclophosphamide) (77%) and FEC100 (fluorouracil, epirubicin and cyclophosphamide) (16%) and for node-positive patients FEC-D (FEC plus docetaxel) (54%), AC + paclitaxel (26%) and TAC (docetaxel plus AC) (14%). Published switch rates away from chemotherapy are 20% for node negative and 24% for node positive patients. The cost saving due to a reduction in chemotherapy was estimated to be A$2264 per woman tested.  After consideration for the cost of the assay (A$4200) and a published utility rate of 0.5, a A$/QALY gain was estimated at A$9986. CONCLUSIONS: Knowledge of the Oncotype DX RS has a cost-offset due to the reduction in chemotherapy and is likely to be cost-effective.  These benefits reflect the quality of life and survival benefits of a more targeted approach to treatment decision making. Further analysis is warranted to include the potential costs of relapse avoided by use of the assay and any patient indirect costs in Australia.