BACKGROUND: Despite the clinical efficacy of recombinant human erythropoietin (RHE) on chemotherapy-induced anemia, most cost-effectiveness studies have given unfavorable results. OBJECTIVE: To determine the cost of managing anemia in unselected patients receiving chemotherapy for lung cancer, and the efficacy and cost-effectiveness of RHE. METHOD: We constructed Markov models of two cohorts of patients who received (n=94) or did not receive (n=89) darbepoetin (one weekly injection when the hemoglobin level fell below 11 g/dl), focusing on changes in hemoglobin levels, transfusion requirements, anemia management costs, and the cost-effectiveness ratios of the two management strategies. RESULTS: The use of RHE significantly reduced the proportion of patients needing transfusions (from 33.6% to 19.1%, p<0.05) and the number of red cell units used by transfusion (from 2.97+/-1.47 to 2.11+/-0.47, p<0.01). Markov modeling showed that the RHE strategy significantly increased the mean Hb level (13+/-0.5 g/dl versus 11.9+/-1g/dl, p<0.001), at the price of an increase in the main cost (respectively, US$ 1732+/-897 and 996+/-643; p<0.01). The cost-effectiveness ratio favored the RHE strategy (7.02 versus 9.04). Sensitivity analysis showed that the RHE strategy remained dominant in most situations. CONCLUSION: Routine use of RHE appears to be cost-effective in patients receiving chemotherapy for lung cancer.