OBJECTIVES: To estimate the cost-effectiveness of sorafenib (Nexavar, Bayer, Leverkusen, Germany) versus best supportive care (BSC) for second-line treatment of advanced renal cell carcinoma from the perspective of the UK National Health Service. METHODS: A decision analytic model was developed to estimate the cost-effectiveness of sorafenib. The clinical effectiveness of sorafenib versus BSC was taken from a recent randomized phase III trial. Utility values were taken from a phase II trial of sunitinib, using EQ-5D tariffs. Cost data were obtained from published literature and were based on current UK practice. The effect of parameter uncertainty on cost-effectiveness was explored through extensive one-way and probabilistic sensitivity analyses. RESULTS: Compared to BSC, sorafenib treatment resulted in an incremental cost per quality-adjusted life year (QALY) gained of pound75,398, based on an estimated mean gain of 0.27 QALYs per patient, at a mean additional cost of pound20,063 (inflated to 2007/2008). The probability that sorafenib is cost-effective compared to BSC at a willingness to pay threshold of pound30,000 per QALY is 0.0%. In sensitivity analysis, estimates of cost per QALY were sensitive to changes in the clinical effectiveness parameters, and to health state utilities and drug costs. CONCLUSIONS: Sorafenib has been shown to be clinically effective compared to BSC, offering additional health benefits; however, with a cost per QALY in excess of pound70,000, it may not be regarded as a cost-effective use of resources in some health-care settings.