OBJECTIVES: To evaluate the pharmacoeconomics, including cost-effectiveness and budget impact, of the addition of 2 novel treatments for MRCC in the Formulary of a large teaching cancer center. METHODS: Prior to the FDA's approval of sorafenib and sunitinib, a majority of patients with MRCC treated at our center received the BGC regimen. Sorafenib and sunitinib were FDA-approved for MRCC in December 2005 and January 2006 respectively. We created a pharmacoeconomic model to characterize the expected use of sorafenib and sunitinib compared to the traditional BGC therapy. The model was created assuming equal use of both new agents (40%) and modest use of the BGC regimen (20%). The time-to-progression (TTP) used to calculate cost-effectiveness was based on clinical experience at our institution (expert opinion) and clinical trials. The model also accounts for the development of adverse events requiring dose reductions based on our experience. Other parameters used were average wholesale price (AWP), BSA = 2 m2, and average weight = 70 kilograms. RESULTS: Approximately 144 patients per year with MRCC receive treatment at our institution. The institutional cost-effectiveness of these regimens is as follows: sorafenib = $54,000/PFS-year; sunitinib = $ 59,000/PFS-year, and BGC = $152,000/PFS-year. The overall budget impact of the introduction of these 2 agents was a decrease in $3 million per year in total drug costs to treat MRCC when compared to the BCG regimen. CONCLUSION: Sorafenib and sunitinib offer alternative treatment for MRCC and are associated with better outcomes (longer TTP) and convenience (oral therapy). This was important for our institution because bevacizumab, the most costly agent in the BGC regimen, has not received FDA approval for the treatment of MRCC and therefore, reimbursement for this indication is limited. Sorafenib and sunitinib offer a superior treatment option at a lower cost and potential for improved revenue.