OBJECTIVE: The use of taxane therapy (paclitaxel and docetaxel) is common for the treatment of metastatic breast cancer (MBC) and is associated with the development of severe toxicities. These toxicities are often dose limiting and can reduce the effectiveness of taxane therapy. There are limited data on the economic consequences of managing toxicities. The objective of this analysis is to quantify the direct medical costs of managing taxane-related toxicities in patients with MBC. METHODS: An economic model was created to estimate the direct medical costs associated with the management of taxane-related toxicities. Model inputs were obtained from published literature, clinical trial data, and expert opinion. Primary model inputs included incidence of toxicities, costs of managing toxicities, and the frequency of taxane use in patients with MBC. Costs were inflated to 2003 dollars using the Medical Consumer Price Index. RESULTS: The estimated costs of managing taxane-related toxicities were $7,251 per patient treated with paclitaxel and $17,580 per patient treated with docetaxel. The higher cost for patients treated with docetaxel was primarily driven by a higher incidence of adverse events. Disease prevalence estimates and treatment patterns indicated 55,783 patients with incident cases of MBC would receive taxane therapy annually in the U.S., with 38% receiving paclitaxel and 62% receiving docetaxel. The annual direct medical costs associated with managing taxane-related toxicities in the U.S. are approximately $762.4 million. CONCLUSIONS: Direct medical costs associated with the management of toxicities are considerable although disease progression costs related to the dose-limiting effects of toxicities were not modeled. Reduction in the incidence and/or severity of taxane-related toxicities could result in substantially lower medical expenditures for health care payers.