e12637 Background: Neoadjuvant chemotherapy is widely and increasingly used for patients with operable breast cancer that is large or highly proliferative. Advantages include downstaging of the breast and. axilla, post-neoadjuvant salvage treatments for poor responders, surgical and reconstruction planning, prognostication and to give time for genetic testing. After neoadjuvant therapy, treatment options may change. We aimed to determine the financial impact to the health system, of neoadjuvant chemotherapy compared with surgery first. Methods: A literature search identified data on the probability of receiving certain investigations and treatments, and associated outcome probabilities for neoadjuvant and surgery-first patients. Published health utility results were used. These data were incorporated into a decision analytic economic model. A cost-utility analysis was undertaken, with sensitivity analyses to evaluate the impact of uncertainties in the data. Pricing was based on publicly available costings of investigations and treatment in Australian Dollars (AUD). A value of information analysis was undertaken to determine the value of further research to reduce uncertainty in results. Results: Expected costs for neoadjuvant vs surgery first differed by $77. Neoadjuvant therapy showed higher effectiveness that surgery first (QALY 0.708 vs 0.698 respectively. The average cost per QALY of neoadjuvant therapy was $7,232 AUD (ca. $4825 USD), below the threshold of $50,000 per QALY. In a sensitivity analysis, neoadjuvant therapy dominated when axillary dissection rate was lower than 60% and postmastectomy reconstruction rate was more than 27%. These factors had the greatest impact on results, which were otherwise robust. Probabilistic sensitivity analysis found that neoadjuvant therapy was cost-effective 71% of the time at a willingness-to-pay threshold of $50,000 per QALY. Value of information analysis found that primary research into treatment probabilities and outcome utilities is needed to validate these results. Conclusions: Neoadjuvant systemic therapy is a potentially cost-effective treatment. However, primary contemporary data in directly comparable patient populations is needed, including the impact of post-neoadjuvant systemic therapy.