The National Institute for Health and Clinical Excellence (NICE) invited the manufacturer of trastuzumab, Roche Pharmaceuticals, to submit evidence for the clinical and cost effectiveness of this drug for the treatment of advanced gastric cancer (aGC), as part of the Institute's single technology appraisal (STA) process. The Centre for Reviews and Dissemination (CRD) and the Centre for Health Economics (CHE) Technology Appraisal Group at the University of York was commissioned to act as the evidence review group (ERG). This article provides a description of the company submission, the ERG report and NICE's subsequent decisions. In the initial appraisal by NICE, trastuzumab was rejected for use in the licensed population. Given this result, the manufacturer submitted additional evidence. In the final appraisal decision, trastuzumab was approved, in accordance with supplementary guidance issued by NICE on appraising life-extending, end-of-life treatments, for patients whose human epidermal growth factor receptor 2 (HER2) status was defined by an immunohistochemistry 3 positive (IHC3+) result. This appraisal highlights the need to fully assess the impact of different approaches to diagnostic testing on the cost effectiveness of targeted treatments. In this appraisal, it was found that the diagnostic strategy influenced the effectiveness and cost of trastuzumab. In the future, different diagnostic strategies should be compared in the incremental cost-effectiveness analysis.