OBJECTIVES: Trastuzumab (Herceptin®) combined to chemotherapy has demonstrated significant improvement in time to progression and survival in metastatic breast cancer patient overexpressing the receptor of the human growth factor (HER-2). Herceptin® has recently received a new indication as an adjuvant therapy in localised invasive breast cancer and the cost-effectiveness of this new add-on therapy needs to be evaluated. METHODS: An analytic Markov Model was established based on the results of the pivotal clinical study (HERA) and expert opinion to simulate for an early breast cancer patient the course of disease until death. The health states included loco-regional and distant recurrences (metastasis), cardiac events (side-effects), disease free survival and death respectively. This simulation model projected long-term clinical outcomes and costs, of adding Herceptin® during one year sequentially to standard adjuvant therapy versus standard alone (observation). According to current practices in France, Herceptin® was also supposed to be used in case of distant recurrences in both arms. Improvements in lifetime quality adjusted life years (QALY) were also estimated. Transition probabilities were adjusted on HERA results. Yearly costs of each health state came from published sources and from detailed costs observed in one French Oncology Centre (G.-F. Leclerc in Dijon). Direct costs and outcomes were projected over patients' lifetimes from a French Sickness Fund perspective. They were both discounted at 3% annually. Sensitivity analysis was performed. RESULTS: For 1000 patients with a 10-year follow-up, an adjuvant therapy with Herceptin® would avoid 49.7 loco-regional recurrences, 179.5 distant recurrences and 133.4 deaths. Incremental cost-utility ratio of Herceptin® was €18,282 /QALY gained at lifetime horizon, which is well below the commonly accepted threshold of €45,000/QALY gained. CONCLUSIONS: Utilization of Herceptin® as an adjuvant therapy in patients with primary HER-2 positive breast cancer improves patient survival with an acceptable cost-utility ratio in the French setting.