Background Costly biologicals in palliative oncology are emerging at a rapid pace. For example, in patients with advanced esophageal squamous cell carcinoma addition of cetuximab to a palliative chemotherapy regimen appears to improve survival. However, it simultaneously results in higher costs. We aimed to determine the incremental cost-effectiveness ratio of adding cetuximab to first-line chemotherapeutic treatment of patients with advanced esophageal squamous cell carcinoma, based on data from a randomized controlled phase II trial. Methods A cost effectiveness analysis model was applied based on individual patient data. It included only direct medical costs from the health-care perspective. Quality-adjusted life-years and incremental cost-effectiveness ratios were calculated. Sensitivity analysis was performed by a Monte Carlo analysis. Results Adding cetuximab to a cisplatin-5-fluorouracil first-line regimen for advanced esophageal squamous cell carcinoma resulted in an the incremental cost-effectiveness ratio of (sic)252,203 per quality-adjusted life-year. Sensitivity analysis shows that there is a chance of less than 0.001 that the incremental cost-effectiveness ratio will be less than a maximum willingness to pay threshold of (sic)40,000 per quality-adjusted life-year, which is representative for the threshold used in The Netherlands and other developed countries. Conclusions Addition of cetuximab to a cisplatin-5-fluorouracil first-line regimen for advanced esophageal squamous cell carcinoma is not cost-effective when appraised according to currently accepted criteria. Cost-effectiveness analyses using outcome data from early clinical trials (i.c. a phase II trial) enable pharmaceutical companies and policy makers to gain early insight into whether a new drug meets the current eligibility standards for reimbursement and thereby potential admittance for use in regular clinical practice.