Economic evaluations of new AIDS treatment drugs are important. For physicians treating patients with Kaposi's sarcoma, these issues are especially meaningful since cancer treatment costs for this group of patients are high. Kaposi's sarcoma is the most frequently occurring neoplasm in AIDS patients, affecting about 15% of this population. In our study, a retrospective economic evaluation has been made based on data from two randomized phase III clinical studies of severely immune-compromised HIV-infected individuals and which compares liposomal doxorubicin with liposomal daunorubicin. We have estimated the cost and cost effectiveness of the two drugs. The costs per complete or partial response are USS 18340 for daunorubicin and USS 8871 for doxorubicin. The incremental cost per additional responder by using liposomal doxorubicin instead of liposomal daunorubicin is USS 1910. Sensitivity analysis shows that these results hold over a wide range of assumptions.