Purpose <p>Squamous NSCLC (sqNSCLC), a subtype with few targetable mutations, is often diagnosed at advanced stages. Platinum-based chemo-therapy, the first-line treatment, yields median overall survival (OS) of less than or equal to one year, underscoring the need for better therapies. Penpulimab, a novel PD-1 inhibitor developed in China, is a humanized IgG1 antibody with a modified Fc region. Phase III trial data (AK105-302) showed penpulimab + carboplatin-paclitaxel (PEN-CP) significantly improved progression-free survival (PFS) and OS in metastatic sqNSCLC vs. placebo (CP), with a favorable safety profile. However, its high cost and lack of cost-effectiveness analyses warrant further study. This research evaluates PEN-CP’s cost-effectiveness vs. CP from the Chinese healthcare perspective.</p> Methods <p>A three-state Markov model was developed to evaluate the cost-effectiveness of PEN-CP as a first-line treatment for metastatic sqNSCLC. Clinical efficacy data were sourced from the AK105-302 trial, while drug costs were derived from national tender prices. Additional costs and health utilities were obtained from published literature. The primary outcomes included total costs, quality-adjusted life years (QALYs), and incremental cost-effectiveness ratios (ICERs). To assess the robustness of the findings, both one-way and probabilistic sensitivity analyses were conducted.</p> Results <p>Compared to CP, the ICER for PEN-CP was $14,918.81 per QALY. The ICER values were below the willingness-to-pay (WTP) threshold of $38,060.00 per QALY. The key drivers of the model outcomes were the price of penpulimab, the PFS stage utility value, and the cost of optimal supportive care.</p> Conclusions <p>From the perspective of the Chinese healthcare system, penpulimab combined with first-line chemotherapy demonstrates is cost-effective at a willingness-to-pay threshold of $38,060.00 per QALY for patients with metastatic sqNSCLC and represents a promising first-line treatment option.</p>