Ovarian cancer patients who are covered by Medicare are faced with therapeutic decisions that require consideration of out-of-pocket costs for oral anticancer agents and complete reimbursement for more expensive intravenous and often more toxic medications. The response rates for oral agents such as altretamine or etoposide are similar to those for intravenous paclitaxel or topotecan (14% to 26%), but the economic considerations differ markedly. Under current legislation, Medicare will completely cover the costs for the two intravenous outpatient chemotherapy regimens, but does not provide any financial support for oral regimens that do not have associated injectable formulations. This is a matter of concern for patients, as 89% prefer oral therapies. We compared the out-of-pocket costs and costs to the Medicare system of oral and intravenous agents used for refractory ovarian cancer, using published phase II and phase III data. The total cost of treatment was $18,635 for topotecan, $15,767 for paclitaxel, $7,721 for etoposide, and $4,477 for altretamine. Conversely, out-of-pocket costs for Medicare patients without Medigap coverage were highest for altretamine, at the full cost of $4,477, whereas Medicare covered all but $83 for topotecan, $37 for paclitaxel, and $66 for etoposide. Current Medicare reimbursement policies may affect patient options for cancer care. These policies are changing and should continue to change as Medicare adopts more managed care strategies.