OBJECTIVES: A recent randomized phase III trial of XP vs. continuous infusional FP as first-line therapy in patients with AGC met its primary endpoint of non-inferior progression-free survival (PFS). There was a trend toward superior efficacy seen with the superiority test for PFS (median 5.6 months for XP vs. 5.0 for FP) and the superior response rates of XP. A pharmacoeconomic model was built to compare costs of the two therapies in an Italian setting. METHODS: Direct medical costs during the study were estimated from the Italian hospital perspective. Costs of the two alternative therapies were estimated based on the trial results on actual dose and the number of administrations, and Italian unit costs. Adverse event (AE) profiles were used to estimate the cost of treating AEs. An expert panel estimated typical treatment patterns and costs of treating major AEs like anemia and febrile neutropenia. RESULTS: AE profiles were similar: associated costs to treat major (grade 3/4) AEs were CONCLUSION: Oral capecitabine in combination with cisplatin would produce significant direct medical cost savings from an Italian payer perspective. AE costs are similar with the two regimens. Given the trend to superior efficacy, the projected direct cost savings, and the convenience of oral treatment, XP would be considered a dominant (less costly and more effective) regimen for AGC from the Italian payer perspective.