Background Despite the recently increasing global initiatives for childhood cancer, most recommended interventions to improve survival of children with cancers in Low Income Countries (LICs) are classified as either low or medium priority in the recently revised Ethiopia Essential Health Service Package (EEHSP), due to the limitation of local evidence on cost and cost-effectiveness.

Methods We collected historical cost data for the pediatric oncology unit, and all other (eighty-six) departments in Tikur Anbessa Specialized Hospital (TASH) from 8 July 2018 to June 2019, using mixed (dominantly top down) costing approach, and provider perspective. The direct costs of the oncology unit, costs at other relevant clinical departments, and overhead cost share are summed up to estimate the total annual cost. We used data on health outcome from other studies to estimate the net utility gain (DALY averted) of running a pediatric oncology unit compared to doing-nothing scenario. We applied the 50% of GDP/capita as a willingness-to-pay threshold.

Results The annual total cost of running the pediatric oncology unit in TASH during 2018-2019 was USD 797,458 (USD 964 per treated patient). Drugs and supplies (33%), and personnel (32%) constitute a large share of the cost. Sixty two percent of the cost is attributable to Inpatient Department (IPD) services, with the remaining 38% of costs related to Outpatient Department (OPD) services. The cost per DALY averted is USD 461 (range USD 346 to USD 753 on the one-way sensitivity analysis) which lies below the threshold for ‘cost effective’ interventions (USD 477/DALY averted).

Conclusions The provision of pediatric cancer services using a specialized oncology unit is most likely cost effective in Ethiopia and with an additional benefit on equity and financial risk protection. We recommend for reassessing the Childhood cancer treatment priority level decision in the current EHSPE.