BACKGROUND: Lenvatinib demonstrated a treatment effect on overall survival by the statistical confirmation of non-inferiority to sorafenib for the first-line treatment of uHCC. The objective of this study was to evaluate the cost-effectiveness of lenvatinib compared with sorafenib for patients with uHCC in Japan. METHODS: A partitioned-survival model was developed to estimate the cost-effectiveness of lenvatinib versus sorafenib when treating uHCC patients over a lifetime horizon and considering total public healthcare expenditure. Efficacy and safety data were extracted from the REFLECT trial. Utility values were derived from the European Quality-of-Life 5-Dimension Questionnaire, conducted with patients enrolled in the REFLECT trial. Direct medical costs, such as primary drug therapy, outpatient visits, diagnostic tests, hospitalization, post-progression therapy, and adverse-event treatments, were included. Cost parameters unavailable in the clinical trial or publications were obtained based on the consolidated clinical standards from a Delphi panel of four Japanese medical experts. RESULTS: For lenvatinib versus sorafenib, the incremental cost was - 406,307 Japanese Yen (JPY), and the incremental life years and quality-adjusted life years (QALYs) were 0.27 and 0.23, respectively. Thus, lenvatinib dominated sorafenib, due to the mean incremental cost-effectiveness ratio falling in the fourth quadrant, conferring more benefit at lower costs compared with sorafenib. The probabilistic sensitivity analysis showed that 81.3% of the simulations were favorable to lenvatinib compared with sorafenib, with a payer's willingness-to-pay-per-QALY of 5 million JPY. CONCLUSIONS: Lenvatinib was cost-effective compared with sorafenib for the first-line treatment of uHCC in Japan.