OBJECTIVES: In an ongoing, phase III trial, sunitinib was significantly superior to IFN-a in first-line therapy of mRCC; (median progression-free survival [PFS] = 11 months [95% CI: 10-12] vs. 4 months [95% CI: 4-6]; P<0.000001). This study investigated the cost-effectiveness of sunitinib vs. IFN-a in this setting from a US third-party payer perspective. METHODS: A Markov model with a 10-year time horizon projected survival and costs in 6-week cycles based on extrapolated trial survival data. First- and second-line treatment and palliative care were examined. The endpoints used to value model outcomes were PFS; overall survival (OS); quality of life; adverse events (AEs) and related dose reductions or cycle interruptions. Progression-free months (PFM), life-years (LY) gained and quality adjusted life-years (QALYs) gained were used to assess treatment efficacy. Costs incurred included those associated with physician visits, hospitalisation, tests, scans, drugs, monitoring and treatment of AEs. Costs (adjusted to 2006 US dollars) and survival benefits were discounted annually at 5% and sensitivity analyses (scenario and probabilistic) were conducted. Results were presented as incremental cost-effectiveness ratios (ICERs) and incremental cost-utility ratios (ICURs). RESULTS: Longer projected PFS and OS were obtained for sunitinib than for IFN-a. The ICERs of sunitinib vs. IFN-a over 10-years were $1,551/PFM, $67,215/LY and $52,593/QALY gained. Based on the probabilistic sensitivity analysis, sunitinib has a 45.9% and a 64.9% probability of being cost-effective compared with IFN-a at the threshold of $50,000 and $100,000/QALY, respectively. Survival, sunitinib drug costs and cost of best supportive care were the key drivers of the model. CONCLUSION: Sunitinib is a cost-effective alternative to IFN-a as first-line treatment in mRCC, with cost-effectiveness ratios within the established threshold that society is willing to pay for health benefits (i.e. $50,000-100,000/LY or QALY).