OBJECTIVES: To estimate the cost-effectiveness of cetuximab in combination with radiotherapy (ERT) compared to radiotherapy alone (RT), for the treatment of locally advanced head and neck cancer in patients for whom chemoradiotherapy is inappropriate or intolerable in the UK. METHODS: A modelled economic evaluation calculated the incremental cost per quality-adjusted life year (QALYs) gained with ERT compared to RT. Resource utilisation and survival data were extracted from an international phase-III trial of ERT. Assumptions regarding costs of care were drawn from estimates by an expert clinical panel. Overall survival and progression-free survival times were extrapolated beyond the trial period using statistical models. Patient survival was stratified into health states defined by adverse event status in the acute phase and disease status post-treatment. Utility values for the health states were obtained from a survey of oncology nurses using the EQ-5D. Estimates of individual costs and outcomes were estimated for each patient in the trial and overall mean values calculated for the incremental analysis between the treatment groups. The analysis was conducted from the perspective of the NHS. Costs and outcomes were discounted at 3.5%. RESULTS: In the lifetime analysis, ERT patients were estimated to gain an extra 1.26 QALYs compared to RT patients. From the public establishment perspective, this translated into an incremental cost per QALY gained of £6,390. Shortening the analysis to the timeframe of the clinical trial (5 years) raised the ICERs to £19,951 per QALY gained respectively. Bootstrap simulation and sensitivity analysis showed that the ICERs were robust to changes in the key variables. CONCLUSION: Results of the modelled economic evaluation strongly suggest that ERT offers a good value-for-money alternative in the treatment of locally advanced head and neck cancer in the UK.