Background and aims Hepatocellular carcinoma (HCC) is one of the leading causes of cancer related deaths. Patients with advanced HCC are treated with sorafenib. A recent randomized controlled trial demonstrated a survival benefit for regorafenib treatment in patients with advanced HCC who had progressed on sorafenib. We aimed to evaluate the cost-effectiveness of this approach. Methods To evaluate the cost effectiveness of regorafenib, we used a Markov model that incorporates health outcomes, measured by life-years and quality-adjusted life-years (QALYs). Drug costs were based on 2017 discounted prices. Model robustness was validated by probabilistic sensitivity analyses using Monte Carlo simulations. Results The use of regorafenib results in a gain of 19.76 weeks of life (0.38 Life Years) as compared to placebo. When adjusted for quality of life, using regorafenib produced a gain of 0.25 quality adjusted life years (QALYs). The incremental cost-effectiveness ratio for regorafenib compared with best supportive care was between $201,797 and $268,506 per QALY. Conclusion The modest incremental benefit at a relatively high incremental cost of regorafenib treatment suggests that it is not cost-effective at commonly accepted willingness to pay thresholds.