OBJECTIVES: The study objective is to characterize first-, second- and third-line chemotherapy use and costs for patients with NSCLC from a payer's perspective. METHODS: Enrollment and claims records from a large, multistate private health insurance plan were utilized to identify study subjects. Criteria for analysis include subjects aged 21 years and older, with =3 ICD-9 diagnosis codes for NSCLC from January 2002 to December 2005 and continuous enrollment for 12 months prior to diagnosis. An algorithm was developed to identify first-, second-, and third-line agents based on chemotherapy (J-codes) sequencing and delivery dates (CPT codes). Charge data were applied to estimate costs. Direct medical care costs (inpatient, outpatient, pharmacy, skilled nursing facility) were estimated over 12 and 24 months using the Kaplan-Meier Sample Average estimator to account for deaths and disenrollments. RESULTS: A total of 42% of NSCLC cases received chemotherapy (n=3323); 1860/3323 met criteria for analysis. Average age was 63 years (range 26-103) and 44% were female. Most common therapies (number of patients): first-line: carboplatin + paclitaxel (939), carboplatin + etoposide (321), carboplatin + gemcitabine (196), carboplatin + docetaxel (185); second-line: docetaxel (98), gefitinib (77), erlotinib (49), gemcitabine (37); third-line: gefitnib (35), pemetrexed (14), erlotinib (13), carboplatin + paclitaxel (13). Number starting treatment (%), mean observed treatment time in months: first-line only: 1332 (72%), 8; first-/second-line: 375 (20%), 11; first-/second-/third-line: 153 (8%), 14. Mean costs (12 months): first-line only: $136,385 (SE-2254); first-/second-line: $176,052 (SE-5040); first-/second-/third-line: $215,077 (SE-8215). Mean costs (24 months): first-line only: $153,752 (SE-3367); first-/second-line: $213,528 (SE-7265); first-/second-/third-line: $277,007 (SE-12288). CONCLUSION: Less than 1/3 of NSCLC patients receive second- and third-line chemotherapy. Although treatment duration was longer for patients receiving multiple lines of therapy, additional lines of treatment did not significantly increase average monthly costs ($19,500).