As physicians become more aware of the need to treat anaemia in their patients with cancer, they have to consider 2 treatment options: red blood cell transfusion or recombinant human erythropoietin [epoetin alfa; epoetin beta]. Healthcare systems are under increasing pressure to lower costs while maintaining quality of care; therefore, treatment of cancer-related anaemia requires a disease management strategy aimed at achieving optimal clinical and economic outcomes. Although blood transfusion is the traditional and fastest means of alleviating associated symptoms, possible complications include acute transfusion reactions, transfusion-related acute lung injury and bacteraemia. Long term complications comprise transmission of viruses and prions, alloimmunisation, immunomodulation and graft-versus-host disease. Despite the introduction of additional screening and sterilisation procedures, transfusions cannot be considered as completely safe, especially with the emergence of new infectious agents. Moreover, the clinical significance of a possible effect on immunocompetence, in terms of promoting tumour growth and risk of infection, remains to be resolved. Treatment with recombinant human erythropoietin increases haemoglobin levels and reduces the need for transfusion in patients with cancer-related anaemia. Trial data also show that recombinant human erythropoietin therapy is well tolerated by patients, and is useful in preventing and treating anaemia induced by cancer treatment.In terms of economics, the cost of blood transfusion is increased by indirect expenses associated with the treatment of complications and the subsequent need for laboratory testing or antigen-negative units. Its cost is likely to increase in the future with the introduction of additional screening procedures. While recombinant human erythropoietin may appear expensive at first sight, its cost effectiveness can be improved by measuring predictive response indicators such as haemoglobin and serum erythropoietin levels at baseline and after 2 weeks of treatment. For example, a US study reported that the effectiveness for each $US1 spent on standard care can be achieved with $US0.81 spent on recombinant human erythropoetin therapy, i.e. treatment with recombinant human erythropoetin was about 23% more cost effective than standard care.Thus, based on both clinical and economic grounds, recombinant human erythropoietin should be considered a preferred alternative to transfusion, especially in patients who are likely to experience chemotherapy/radiotherapy-induced anaemia and those at higher risk of transfusion-related complications.